AFP Offers Tax Incentive Recommendations to Finance Committee
By Jason Lee
May 22, 2012
On May 3, 2012, Andrea McManus, CFRE, chair of AFP, testified before the House of Commons Standing Committee on Finance during its hearing on tax incentives for charitable donations.
During her testimony, McManus offered the committee two recommendations:
1. Increase the flow of charitable funds in the wake of the recession and encourage Canadians to enhance their charitable giving by establishing a "stretch" charitable tax credit.
McManus stated that AFP supports Imagine Canada's Stretch Tax Credit proposal that would apply to donated amounts above $200 that exceed a donor's previous highest giving level. This new measure would be based on an individual taxpayer's best previous year of giving. This measure would provide a Stretch Tax Credit of 39 percent on these new donations—10 percentage points higher than the current level of tax credit on donations above $200.
2. Extend the exemption from capital gains tax to charitable gifts of private company shares, land and real estate.
In 2006, the government removed the capital gains tax on donations of marketable securities to most charities, making them more attractive to potential donors. McManus encouraged the government to turn its attention to private company shares, land and real estate. Gifts of both these appreciated capital assets are exempt from capital gains taxes in the U.S., and Canadian charities should have the same opportunity to access donations from the private sector.
"Charitable organizations need the support of government to better serve Canadians," noted McManus. "More importantly, a healthy charitable sector can help drive our economy. We believe that the two recommended policy changes will assist in lowering the tax burdens on Canadians while strengthening the capacity of the charitable sector to provide critically needed programs and services."
AFP's advocacy work on issues such as these is part of an active campaign to have a direct impact on legislative and regulatory issues affecting the charitable sector and AFP's members. It ensures that the voices of AFP and its over 3,000 Canadian members are heard on the Hill and at the provincial and local levels.
Download the full text of the comments by Andrea McManus (PDF) by clicking here.
Read more of Andrea’s personal thoughts about her testimony on AFP’s blog.
Jason Lee is general counsel for AFP. In this position, he strives to increase the public visibility and awareness of the association by developing political initiatives regarding fundraising and philanthropic issues. He represents the association in public policy and legislative matters before Congress, the Canadian Parliament, the U.S. and Canadian Administrations, state and provincial legislatures, and various regulatory and other pertinent agencies. In addition, he provides legal counsel to the association and assists with the enforcement of the AFP Code of Ethical Principles and Standards.
Related AFP ResourcesAFP Rebuts Opinion Piece on Charitable Giving Incentive
New Charity Package Introduced in Senate
IRS Withdraws Substantiation Proposal Thanks to Thousands of Nonprofit Comments
Senate Working Groups Highlight Charitable Giving Incentives in Tax Reform “Exploration”
Charities, Fundraisers Call New Tax Plan a “Mixed Bag”—Appreciate Simplification, Concerned About Impact on Giving