In order for business people to take full advantage of tax benefits and existing programs, and for cultural organizations to highlight all of the benefits associated with their fundraising campaign, it’s essential to be aware of the cumulative impact of some of these measures and of the lever effect that they can have on one another. The combination of federal and provincial measures and the Mécénat Placements Culture grant, for example, could mean that a modest net donation will lead to a substantial amount for the chosen organization.
For instance, if an individual makes a $1,000 donation to a cultural organization whose annual revenues are under $250,000, the calculation would be as follows:
Individual Cultural organization
Donation $1,000 $1,000
Tax credit (48.2%) $482
Net contribution $518
Placements Culture $3,000
Total amount $4,000
In other words, a net individual contribution of $518 will procure an amount of $4,000 to the cultural organization that receives this donation. This lever effect is a compelling argument that cultural organizations should stress when they solicit funds.
Source: The Art of Investing in Culture