Boost your donations with your credit card

At first glance, it might seem like Canadians are tight-fisted charitable givers, only donating about a third as much as our American counterparts, according to research from the Fraser Institute. Yet there are compelling reasons behind the apparent philanthropic frugality north of the border: Some would-be Good Samaritans may be unaware that they can skillfully use credit cards to increase funding for charities -- without adding to their account balances. giving-back

Charity affinity credit cards
Issuers of charity affinity credit cards often make automatic contributions to the sponsored non-profit organization.

Credit Counselling Canada's executive director, Patricia White, notes that charity affinity cards make it very easy to contribute. "You generally just need to use the card as you would normally to donate to your favourite charity," says White.

The card issuer's contribution amount can vary widely and is not always clearly stated. A client service representative who researched the automatic donation formula for the MBNA Canadian Wildlife Federation MasterCard found that the bank's donation rate is three-thousandths of a penny for each dollar users charge on their card.

Other charity affinity cards, like the Citizens Bank Oxfam Canada Visa, generate a 10-cent donation per purchase. That flat fee accelerates charitable contributions for high volumes of smaller transactions. Consider that 500 purchases each costing $2 on the Oxfam Canada card result in a $50 card issuer donation, compared to a $3 contribution for $1,000 worth of spending under the MBNA Canadian Wildlife Federation MasterCard

Besides finding out exactly how much the card issuer donates, White adds that consumers should be diligent about learning the charity credit card's service charges and interest rate costs. (Story continues below chart.)

CHARITY AFFINITY CREDIT CARDS
  Causes supported Donation amount APR for purchases Annual fee
Citizens Bank Amnesty Amnesty
International
$0.10 per
purchase
19.5%
none
Citizens Bank Oxfam Canada Visa
JOxfam Canada $0.10 per
purchase
19.5% none
MBNA Canadian Wildlife Federation MasterCard
Canadian Wildlife
Federation
$0.003 per
dollar spent
16.99%
none
MBNA Ducks Unlimited MasterCard Ducks Unlimited
$0.003 per
dollar spent
16.99%
none
MBNA Royal Canadian Geographical Society MasterCard Royal Canadian
Geographical
Society
$0.003 per
dollar spent
16.99%
none

 

Card reward donating
Consumers can also pony up their credit card rewards to bolster donations. Unlike most single-charity affinity cards, cardholders can choose from a number of participating charitable organizations when they contribute their reward points or miles.

For example, BMO Air Miles cardholders can visit the Air Miles website and use 190 Dream reward miles to donate at least $20 to charities such as the Canadian Red Cross Disaster Relief Fund, Kids Help Phone, Special Olympics Canada Foundation and World Wildlife Fund (WWF).

Under Aeroplan's Beyond Miles initiative, CIBC Aero Classic Visa cardholders can contribute to one of eight founding charities or choose to distribute accumulated miles among more than 320 prospective causes belonging to Aeroplan's Charitable Pooling program. The pool focuses on supporting organizations and individuals who want to improve local community life.

Despite the vast range of participating causes, contributed Aeroplan miles are ineligible for a charitable donation tax receipt. Peter Coles, a tax research and training specialist with H&R Block Canada, explains that donated reward points or miles must have an ascertainable monetary value before qualifying as a gift for charitable donation tax credit purposes. Aeroplan specifies no monetary value for its reward miles.

In contrast, Air Miles contributed to a registered charity have a stated monetary value since 190 reward miles are required to make a $20 cash donation. The registered charity issues a tax receipt to the Air Miles donor, usually within 90 days of the contribution.

Like Aeroplan, Hudson's Bay Rewards have no ascertainable value and so are ineligible for tax deductions. Still, HBC MasterCard holders can convert their reward points to Air Miles, make cash donations under that plan and receive an official receipt.

Consumers who crave charitable donation tax credits should also verify they're contributing to a valid charity registered with the Canada Revenue Agency (CRA). Only registered charities can issue tax receipts. (Story continues below chart.)

CREDIT CARDS THAT ALLOW POINT DONATIONS
  Causes supported Donation amount APR for purchases
Cardholder rewards
Annual fee
Alterna MBNA Rewards MasterCard Canadian Cancer Society,
Children's Wish Foundation,
United Way
$25 donation for
2,500 reward points
12.99%
1 reward point per
$1 spent on card
none; one-time
$15 membership
share fee
BMO Air Miles MasterCard
Canadian Red Cross Disaster
Relief Fund, Kids Help Phone,
Special Olympics Canada
Foundation, Trees Ontario,
WWF
$20 donation for 190
reward miles; Trees
Ontario will plant 10
trees for 175 reward
miles
19.9% 1 reward mile per
$20 spent on card
none
CIBC Aero Classic Visa
Click here to see all
participating charities
2% of earned reward
miles or a minimum
1,000 reward miles
(note: as there is no
monetary value for
donated miles,
donations are not
eligible for tax receipts)
19.99%
1 reward mile per
$2 spent on card
$29
Desjardins Modulo Gold Visa
Canadian Cancer Society,
Canadian Red Cross, David
Suzuki Foundation, Equiterre,
Foundation Desjardins,
Planetair, Sainte-Justine UHC
Foundatoin
$40 donation for
40 BonusDollars
9.9%
1% of purchase
amount in reward
points
$50
First Calgary Financial Low Fee MasterCard
Breast Cancer Society,
Children's Wish Foundation,
United Way
$25 donation for
2,500 reward points
19.49%
1 reward point per
$1 spent on card
$24 (First Calgary Financial
is a Calgary-based credit
unionthat charges each
member for a $1 share
investment)
HBC MasterCard
Breast Cancer Research
Foundation, Canadian Red
Cross, Habitat for Humanity,
HBC Foundation
Some or all reward points
(note: as there is no
monetary value for
donated points,
donations are not
eligible for tax receipts)
29.9%
1 reward point per
$1 spent on card
none
RBC Rewards Visa Gold
Canadian Olympic Foundation,
Hope Air
$25 donation for 3,000
reward points
19.99%
1 reward point per
$2 spent on card
none
Vancity enviro Classic Visa
Any registered Canadian
charity
$90 donation for
90,000 reward points
19.5%
1 reward point per
$2 spent on card
none (Vacinity is a British
Columbia credit union that
requires members to buy
a minimum $5 in equity
shares)

 

Best of both worlds
You can turbocharge your charitable giving via a group of hybrid charity rewards cards that both provide automatic issuer donations and allow card reward contributions.

Bank of Montreal has a suite of affinity credit cards that serve diverse charitable causes. On cards like the BMO Canadian Red Cross or Juvenile Diabetes Research Foundation Canada MasterCard, the bank will automatically donate 0.25 per cent of card spending. On top of that, you can earn Air Miles with the cards that can then be donated to the sponsored charity.

Citizen Bank pays 10 cents to a global group of non-profit organizations for each purchase that a Shared Interest Classic Visa cardholder makes. Consumers can then choose a registered Canadian charity to donate their rewards points to.

National Bank Allure MasterCard also supports two different tiers of charitable giving. The bank makes a total contribution of up to $450,000 to the Quebec Breast Cancer Foundation based on all cardholder spending. Individual cardholders can contribute their reward points to either the Canadian Red Cross or Diabetes Quebec.(Story continues below chart.)

HYBRID CHARITY REWARDS CREDIT CARDS
  Causes supported Donation amount APR for purchases Cardholder rewards
Annual fee
BMO Canadian Red Cross MasterCard
Canadian Red Cross 0.25% of card
spending

Cardholders can also
donated $20 for 190
reward miles
19.9%
1 reward point per
$20 spent on card
none
BMO Juvenile Diabetes Research Foundation Canada MasterCard Juvenile Diabetes
Research Foundation
Canada
0.25% of card
spending

Cardholders can also
donated $20 for 190
reward miles
19.9% 1 reward point per
$20 spent on card
none
BMO MADD Canada MasterCard Mothers Against
Drunk Driving
0.25% of card
spending

Cardholders can also
donated $20 for 190
reward miles
19.9%
1 reward point per
$20 spent on card
none
BMO WFF-Canada MasterCard
World Wildlife
Foundation Canada
$0.10 per purchase

Cardholders can also
donated $20 for
2,000 reward points
19.9%
1 reward point per
$20 spent on card
none
Citizens Bank Shared Interet Classic Visa Global nonprofits

Any registered
Canadian charity
$0.003 per
dollar spent
19.5%
1 reward point per
$2 spent on card
none
National Bank Allure MasterCard
Quebec Breast Cancer

Canadian Red Cross,
Diabetes Quebec
Based on total purchases
for all cardholders, up to
$450,000 per year

Cardholders can also
donate $50 for 5,500
reward points
19.99%
1 reward point per
$2 spent on card
none

Other ways to give
Canadians who prefer to donate to causes not covered under a specific charity affinity or rewards card can donate online to any registered charity via CanadaHelps.org. Marketing and community engagement director Kirstin Beardsley says CanadaHelps raised $70 million in 2012, and foresees a 12 per cent increase this year. The average donation via CanadaHelps' website is about $125, made largely with credit cards.

Credit card companies also run special promotions that benefit charitable organizations. During August and September, Visa Canada automatically donated one dollar to pre-selected charities for each in-store Visa payWave purchase at Esso, Marshalls and Metro grocers in Ontario or Quebec.

Keeping things in check
Cardholders may be vulnerable to over-donating. "When you don't see the money leave your hand or bank account, it is tempting to be more generous," says White.

You can address this challenge by budgeting how much you can afford to give to your favourite charities and keeping track of actual contributions. Funding donations with rewards from cash back credit cards represents one strategy to help ensure you can pay when your monthly statement arrives.

See related: Give back to your community with your credit card; 5 ways to safely donate to charity with your credit card

Published October 9, 2013

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