Faith and taxes: How to give wisely and cheerfully

People give for many reasons. Some are drawn to a compelling mission. Others are moved by a tangible, immediate impact. Some give because of trust in leadership, gratitude for blessings received or the quiet joy that follows an act of generosity. The motives are varied and deeply personal. Among Canada’s more than 85,000 registered charities, there is a cause to stir every heart.

For Christians, however, generosity is more than preference or personality; it is theological. Scripture teaches that “the earth is the Lord’s and everything in it” (Psalm 24:1). We are not owners, but stewards. Our giving is not simply philanthropy; it is an act of worship and an expression of trust. When we return a portion to God, we acknowledge His sovereignty and participate in His redemptive work. As St. Paul reminds us, “God loves a cheerful giver” (2 Corinthians 9:7). Christian generosity flows from gratitude for grace already received.

As tax season approaches, this theological truth intersects with practical reality. In the coming weeks, many Canadians will gather receipts, review statements and prepare their returns. It is a natural time to reflect not only on income and expenses, but also on our charitable giving. Yet according to the Canada Revenue Agency, only 19 per cent of tax filers claimed charitable gifts in 2021 – down significantly from two decades ago. Many either overlook their receipts or underestimate the value of the credit available to them.

Charitable tax credits are non-refundable, but for the average Ontario tax-filer they reduce the real cost of giving by roughly 40 per cent. Let us use the 2024 average annual offertory gift in the Diocese of Toronto ($1,775) as an example:

• Federal credit: 15% on the first $200 and 29% on the remaining $1,575. (15% × $200) + (29% × $1,575) = $486.75
• Ontario credit: 5.05% on the first $200 and 11.16% on the remaining $1,575. (5.05% × $200) + (11.16% × $1,575) = $185.87
• Combined credit: $486.75 + $185.87 = $672.62. This represents 37.89% of the total gift (and up to 41.4% if provincial surtaxes apply).

In effect, a $1,775 gift costs closer to $1,102 after tax credits.

For some, the tax credit is simply prudent stewardship – making wise use of the provisions available to us. For others who wish to give sacrificially without “benefit,” the credit itself can become an opportunity: it may be reinvested into further generosity. Either way, tax season becomes more than a financial exercise; it becomes a moment of reflection on how we steward what God has entrusted to us.

Gifts of publicly traded securities offer additional advantages. When such securities are donated directly, capital gains tax is eliminated, and the charitable tax credit still applies. Appreciated assets therefore provide one of the most tax-effective ways to support the Church’s ministry.

As you prepare your return this year, take a moment to consider not only what you owe, but what you have given – and what you might yet give. Tax season is an annual reminder that our resources are entrusted to us by God. Understanding the tax implications of charitable giving may not be the primary reason we give, but it can encourage us to give faithfully, wisely and perhaps even more generously for the sake of the gospel.