Contacts: Walter Sczudlo, Executive Vice President, (800) 666-3863, ext. 455;
Jason Lee, Director, Government Relations, (800) 666-3863, ext. 484

New Budget Will Increase Charitable Giving

Charities, Charitable Fundraisers Applaud Proposal That Will Enhance Their Capacity to Provide Services

(Ottawa, ON) -- The Association of Fundraising Professionals (AFP) today applauded the federal government’s move to eliminate the capital gains tax on gifts of appreciated securities, a provision included in the 2006 budget.

The elimination of the capital gains tax for such gifts is expected to increase giving by hundreds of millions and possibly billions of dollars annually. AFP has championed this proposal for the past five years.

“This is a huge victory for Canada’s charities,” said Susan Mullin, director of development at the York University Foundation and chair of AFP’s Government Relations Committee. “This policy change will dramatically enhance charitable giving in Canada. There are major donors across the country who have been waiting for this type of incentive so they can make their gift. The opportunities for charities to build their capacity and expand programs have now multiplied with this provision.”

Research and anecdotal evidence shows that people generally give because they want to give. However, as the size of the gift increases, so does the impact of tax incentives.

This fact was demonstrated in 1997 when the capital gains tax was lowered by 50 percent. A subsequent study showed a marked increase in giving of securities to many different kinds of organizations. Over a five-year period, gifts of securities went from being a de minimis factor for most organizations to accounting for, on average, 10 percent of a charity’s receipted donations.

“AFP has made it a priority to educate Parliament about the importance of the charitable sector, and this budget underscores the growing awareness of the sector’s impact on all of Canada” said Krista Thompson, executive director of Covenant House in Vancouver, British Columbia. “The sector does far more than just provide services. It educates the public about important issues, brings people together to work on common causes and, of course, is a large employer and economic contributor.”

In 1999, Statistics Canada estimated that the economic contribution of the sector was 6.8 percent of Gross Domestic Product – greater than that of some business sectors, including agriculture and vehicle manufacturing. According to the recent Cornerstones of Community: Highlights of the National Survey of Nonprofit and Voluntary Organizations study, the nonprofit sector posted $112 billion in revenues in 2003 and employed more than 2 million people.

In its written comments to the Standing Committee on Finance, AFP also called for the adoption of a government-sponsored day to recognize and increase public awareness of philanthropy and charitable giving. A bill has been introduced in the Senate that would declare Nov. 15 as National Philanthropy Day, and AFP will continue to press to have this bill passed.

“The complete elimination of the capital gains tax for gifts of publicly traded securities is a critical way to help ensure the vitality of the voluntary sector,” said Paulette Maehara, CFRE, CAE, President and CEO of AFP. “I hope that the government will continue to assist the sector in the future. It is a win-win proposition for everyone involved and affects the quality of life of every Canadian.”

A full copy of AFP’s comments to the Standing Committee on Finance is available by contacting Jason Lee, Director, Government Relations, at (800) 666-3863 or paffairs@afpnet.org.

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The Association of Fundraising Professionals (AFP) represents more than 27,000 members in over 180 chapters throughout the world – including 14 chapters and more than 2,500 members in Canada – working to advance philanthropy through advocacy, research, education, and certification programs. The Association fosters development and growth of fundraising professionals and promotes high ethical standards in the fundraising profession. For more information, go to www.afpnet.org.

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For those looking for more technical information  – here is the link to the information in the Budget

http://www.fin.gc.ca/budget06/bp/bpc3ce.htm#donations