Pay it forward – and get your own back. Find out just how tax-beneficial your donations to charity are.

We’re guessing you have a cause that’s close to your heart. Maybe it’s the SPCA or CANSA? (Our personal favourites vary from the Mazarat Animal Rescue to the Sunflower Fund; read more here on why.)

We’re here to encourage you to keep giving.

And to start getting.

Charity begins at home. Clever charity begins with honed tax skills.

The “Government has recognised that certain organisations are dependent on the generosity of the public”, says SARS. To encourage that generosity, it “has provided a tax deduction for certain donations made by taxpayers”. Not only can donating to charities lead to warm, fuzzy feelings, but it can also jumboise (it’s a word, we promise) your tax refund – making that wallet feel all warm and fuzzy too.

Whether you’re an individual taxpayer wanting to get back what you deserve from the tax man, or a small business owner who understands the importance of community upliftment, donating to SARS-approved PBOs (public-benefit organisations) is win-win.

“I do charity work; I volunteer my opinion every day.”

When you make a contribution to a qualifying PBO, the amount you donate is subtracted from your taxable income. Meaning you pay taxes based on a lower income. The result? You pay the tax man less or you get a refund from him.

But. How to give, how much to give and whom to give to are three things you need to consider.

Give a man a fish – and that fishing-holiday fund will be flourishing in no time!

Before you start planning that holiday, there are two things you need to check:

Is the organisation you’re giving to qualified by SARS?
Is the amount you’re donating equal to or less than 10% of your taxable income?

“The total amount claimed for deduction must not exceed 10 percent of taxable income, and must be made with no strings attached. Crucially, the donation must be made to a qualifying public-benefit organisation (PBO). Such organisations are registered with SARS, and are entitled to issue the donor with a certificate in terms of section 18(a) of the Income Tax Act. This certificate is basically a receipt that reflects the organisation’s PBO registration number, the date of the donation, the names and addresses of both parties, and the amount of the donation.”– SAIPA (South African Institute of Professional Accountants)

Whatever you do, always give 100%. (Unless you’re donating blood.)

Non-cash items, such as clothing, furniture, or even old vehicles, may also be tax-deductible. Remember to determine the fair market value of the items and to keep detailed records of your donations.

NB: A rule of thumb in any taxpaying endeavour? Maintain proper documentation. Whether you’re making charitable contributions, starting an RA or shopping for your work-from-home office.

“Charity is giving without expecting anything in return … except maybe a tax deduction.”

If you decide it’s time for your business to embark on its CSR (corporate social responsibility) journey, make sure the chosen PBO aligns with the business’s values. Choose a charity you resonate with, so that you can build meaningful and impactful partnerships. Consider local nonprofits that directly serve your community; this will foster goodwill among your customer base.

Also, why not use this opportunity to engage your employees? Involve them in the decision-making process. This can boost employee morale by cultivating a shared sense of purpose among your team members.

(That’s certainly been the case for us at TTT!)

Need help finding out if your chosen cause has a Section 18a certificate? Contact us.