The Rodney Dangerfield of Canadian tax incentives

December 18, 2016 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, Canadian Charity Law, Global Giving

There is an amazing tax incentive available to Canadians.  Few people who are knowledgeable about charities want to discuss it. It just does not get any respect! I am referring to the ability of Canadians to donate to "foreign prescribed universities".  For a foreign university to be eligible to be on the list that university needs to be a university that typically has Canadian students studying there. Then once the university is on the list, the Canadian donor obtains the same tax benefits as if they donated to a Canadian university or registered charity even if they have never visited the university or even the country it is located in.

Much of international fundraising relates to universities.  There are about 600 foreign prescribed universities and here is the list.   They are categorized into US, UK and other.   Only about 15 universities have been added since 2012. About 11 from the US and 4 from the UK.  Not only are Canadians unaware of this amazing vehicle for donating to foreign universities but most foreign universities are equally unaware.  

Here is an article we have written on how to apply for "foreign prescribed university" status.   We have assisted numerous universities in dealing with the application process and receipting requirements.  

I am not sure why this incentive for international philanthropy from Canada is not more hyped.  I guess here are a few reasons:

1) It has been around for a long time so it is not "new"

2) Most foreign universities, even those with significant number of Canadian students, are not aware of the incentive.  In my experience even fundraisers for universities that are on the list are often not aware of the importance of this category!

3) Organizations are reactive.  They wait for a major donor to be interested and contact them and don't think ahead of the mechanisms needed to make fundraising more successful.  Unfortunately, in most cases Canadian donors would not be prepared to donate a significant amount to a foreign university without some sort of tax incentive.  

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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