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.

Just Posted

Salmon Arm artist shares love for painting with Roots & Blues performers

Making a business out of creating art a dream come true for the Meikle family

Roots and Blues performer endorses young Salmon Arm climate change activists

Musician Luke Wallace ispired by non-profit Mirella Project

Silverbacks alum Shane Hanna signs with team in Denmark

Salmon Arm native embraces opportunity to play overseas

Alternative approval process to proceed for Centennial Field purchase

Fate of loan to purchase land for future park in hands of South Shuswap residents

Valdy gives volunteers a hand after Salmon Arm Roots and Blues Festival

Celebrated Canadian singer pitched in alongside starstruck clean-up crew

VIDEO: Could we BE any more excited? ‘Friends’ fans go crazy for merch

Movie theatres will show select episodes to mark the NBC series’ 25th anniversary

Penticton man sentenced in non-fatal 2017 shooting

Elkena Michael Knauff sentenced to seven and a half months in jail

Bodies of two missing Surrey men found near Ashcroft

Ryan Provencher and Richard Scurr have been missing since July 17

Pregnant teachers fight to change WorkSafeBC compensation rules

Agency does not recognize risk to unborn babies when mother catches illness from work

Kamloops RCMP locate and arrest man who fled from police

The 22-year-old male was wanted in relation to a domestic violence investigation

North Shuswap Lions, Celista winery host benefit concert

Sept. 7 event at Celista Estate Winery to support North Shuswap Youth Program

Five hedgehogs quickly adopted after being left at BC SPCA

Lucky new owners picked up their pets from Maple Ridge branch on Aug. 20

Most Read