News Release: Cardus Recommends Increasing Charitable Credit as part of Stimulus Package
HAMILTON, January 15, 2009—Cardus, a think tank dedicated to the renewal of Canada's social architecture, is recommending that the federal government increase charitable tax credits from 29% to 42% as part of its stimulus package (Click here for News Wire Release). "Adopting this proposal will be a sound investment in Canada's social architecture," said Ray Pennings, Cardus' Director of Research. "The charitable sector is critical to the rich fabric of Canadian society, and provides taxpayers exceptional return on investment."
Canada's 161,000 charities and not-for-profits (NFP) employ over 2.1 million Canadians and provide 8.6% of Canada's GDP. The services they provide—many of them essential—impact the physical, social, and spiritual lives of virtually every Canadian. Although approximately one third of the $112 billion in the NFP sector is spent by hospitals, universities, and colleges, more than half of the total funding in this sector comes from non-taxpayer sources. In 2006, more than 25% of Canadian taxpayers claimed charitable contributions totalling $8.5 billion.
"The not-for-profit sector is struggling in these difficult economic times, even as their services are needed even more," said Pennings. The proposal by Cardus argues that given charities' success in providing social services, there are compelling arguments to be made for increasing the charitable tax credit as an effective economic stimulus. Every dollar forgone by the taxpayer is leveraged with more dollars spent in the economy by charitable organizations. There is inadequate public data available to accurately project the cost of the proposal, however Pennings indicated that his best "back of the envelope guesstimate" based on current donation levels is between $400 and $600 million.
"This proposal provides incentive to ordinary taxpayers to support causes which reflect their passions and priorities, and produces a diversity of social institutions enriching the lives of Canadians," said Pennings. "This is good economic policy, and this is good social policy. It provides short-term economic stimulus and long-term benefits."
Cardus is a North American public policy think tank, equipping change agents with best theories and practices of public life to renew North American social architecture. Cardus launched in October 2008 to expand on the work of its precursor, the Work Research Foundation. It has an annual operating budget of approximately $1 million and is a registered charity.
Ray Pennings (403)479-4590
A copy of the proposal and background paper is available at http://go.cardus.ca/budget.