Ross Hickey is an associate professor of economics at UBC Okanagan. photo-contributed

UBC Okanagan researchers contribute to study about charitable behaviour

The study found people are more charitable if allowed to claim donations sooner

Would you be more likely to donate to charity if you could report the gift sooner on your taxes? According to a new article published in the National Tax Journal, the answer is yes.

Researchers from UBC Okanagan, University of Melbourne and the University of Guelph found that changing the deadline for donations closer to tax time increased donations by nine per cent.

The team used a 2010 policy experiment in Quebec as their basis. As a way to encourage giving in support of Haiti earthquake relief, the province allowed residents to claim their donations early.

The earthquake struck in January, meaning donors would typically wait until April 2011 to claim the gifts on their tax return. Quebec let residents claim the donations on their 2009 provincial tax returns, a move not followed by other provinces.

In what the researchers describe as a ‘quasi-natural experiment,’ the team constructed control groups using data from homes across the country and considered factors such as average incomes, percentage of French speakers, and number of people with Haitian ancestry.

READ MORE: UBC Okanagan gets new softball team

READ MORE: UBC Okanagan hosts bee talk

“We wanted to make sure our results were as if nothing else affected donation behaviour other than the policy change,” said Ross Hickey, an associate professor of economics at UBC Okanagan and co-author of the study.

“If you were to ask a random sample of Canadians how much of a reduction in their taxes they would get if they were to donate another dollar to charity—most Canadians don’t know.”

In B.C., the combined federal and provincial tax credits for donations $200 and under is 20 per cent. That means a dollar donation would cost 80 cents if paying both provincial and federal taxes.

“When we look at the Haiti case, people would have to wait one year and four months to get that money back and consume that 20 cents on the dollar everywhere outside of Quebec,” said Hickey.

“Those in Quebec got their provincial tax credit back only three months later—and because people value a dollar today more than a dollar a year from now—it reduced the cost of giving.”

READ MORE: New UBC Okanagan coach embracing new challenge with Heat

READ MORE: UBC Okanagan students to weigh into pipeline debate

Extending the deadline for charitable giving closer to when taxpayers file isn’t a new idea. Proposals have been made in Canada to move the date—but have yet to be successful.

Although Hickey doesn’t dispute current policies are working to encourage giving, he says some adjustments, including a deadline extension, would provide extra encouragement.

“We could be increasing the amount that’s given to the charity sector,” said Hickey.

“I think part of the problem is that we maintain the status quo and aren’t really having a conversation about the true objective of charitable tax credits, which is to encourage giving. What this research shows is that there is real money being left on the table.”

To report a typo, email:
newstips@kelownacapnews.com
.


@KelownaCapNews
newstips@kelownacapnews.com

Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Kelowna remains 8th expensive rental market in Canada

The rates for one and two bedroom units in Kelowna remained the same

Gas prices falling in Central Okanagan

Six of the cheapest B.C. gas locations are currently located in Penticton

District proposes 15% hospital tax increase for Central Okanagan households

Tax would rise from $188 in 2020 to $213 in 2024 for an average home assessed at $734,000

Alleged drunk driver has licence suspended following Kelowna bridge crash

The 31-year-old Calgary man, was issued a 90-day immediate roadside prohibition

BC Hotel Association announces Ingrid Jarrett as first female CEO in history

The Kelowna resident has been longstanding member of BC’s tourism and hospitality sector

Protesters barricade Premier John Horgan’s home ahead of B.C. budget unveiling

Demonstrators from the Extinction Rebellion have blocked the Langford driveway

Forest industry supporters and convoy arrive at B.C. legislature in Victoria

Rally delivers petition in favour of ‘working forests’

Ten poisoned eagles rushed to veterinary hospital in Nanaimo

Eagles stricken after eating flesh of euthanized animal at Nanaimo Regional Landfill

Trudeau says Wet’suwet’en crisis, rail blockades a critical moment for country

First Nations leaders suggest it may be time to peacefully end the blockades

Osoyoos Indian Band seeks support for casino

The 6000 to 7500 square foot casino would be located on Osoyoos Indian Band land.

B.C. budtenders become first private cannabis workers to unionize in Canada

Two of seven Clarity Cannabis storefronts vote to join UFCW 1518 union

Kids exposed to household cleaners as newborns more likely to get asthma: B.C. study

Air fresheners, plug-in deodorizers, antimicrobial hand sanitizers and oven cleaners were the worst culprits

Play sparks curiosity through movement in Vernon

Hands and Feet invites theatre newcomers to fall in love with production

Vernon’s Powerhouse Theatre makes a splash with Girl in the Goldfish Bowl

Performance packed full of surprises, director Cara Nunn says

Most Read