Singapore has one of the highest GDP (in PPP) per capita worldwide. Despite this, Singaporeans tend to donate less than those in other wealthy nations. However, donating money to charity is a great way to spend some of the additional cash you made throughout the year. This is because donating can not only help those around you, but it can also give you "money back" through government and credit card incentives. Below, we've listed 3 reasons why donating money can improve your finances.
1. You Can Get a Tax Rebate
One reason why donating money can be good for your wallet is because you can get a tax deduction of up to 250% until December 31st, 2023. For example, if you are an animal lover, you may wish to donate to the Animal Lovers League, which runs a no-kill shelter that homes over 5,000 dogs and cats. If, for example, you decided to donate the average of S$300-S$661 during the winter holiday season, in your next year's tax returns, you would get anywhere from an S$825-S$1,652.50 deduction on your tax statement.
Tax Deduction Status by Type of Donation
To ensure you get the tax deduction, make sure your charity has an approved IPC status on the government's Charity Portal. If it doesn't, you may not get the returns in your end-of-year statement. Moreover, it's important to know that if you receive a benefit like a gift box or clothing item from the donation made, you will not get the full 250%. Instead, you will get the difference between the donation and the value of the benefit. Thus, you should make sure to check the nature of your donation on the IRAS website to understand what will and will not qualify you for a discount.
2. You May Get Money Back from Your Credit Card
A second reason to donate money is that you could actually get money back from your credit card, depending on whether or not you have a rewards credit card. For instance, if you get 3-5% in cashback or miles for your general purchases, donating online to a charity could actually put money back into your pocket.
Popular Credit Cards in Singapore and Reward Exclusions
It's important to note that a majority of credit cards in Singapore don't qualify donations for their cashback or other rewards program. For instance, Bank of China, CitiBank, HSBC, and OCBC don't qualify donations for rebates. On the other hand, banks like Standard Chartered, and UOB don't specify whether or not charitable donations to non-profits are eligible for rewards schemes. In these cases, it's best to check with your bank before making any substantial donations.
3. It Could Help Your Career
Finally, donating to charity could advance your career. This is because spending your money on causes that you truly care about can lead to a great sense of accomplishment and purpose. Even more, studies have shown that giving your time and money can lower blood pressure, increase self-esteem, lower stress, and lead to greater happiness. In the workplace, this means you are more likely to be relaxed and focused, as your confidence in your role as a benefactor will increase your productivity and self-esteem in the office.
Moreover, choosing a charity to donate to could also put many of the issues that arise in your daily life into perspective. This means you may be more sympathetic to interpersonal issues among staff and try to help your workplace succeed, making you a more productive, team-oriented employee.
Donating to Charity Can Help Both You and Your Community
Whether you choose to support kid's education, animals, or cancer awareness, donating to charity is a wonderful way to support important causes in your community. Even more, it can give you some additional benefits too. This is because you can get tax deductions at the end of the fiscal year, earn rewards on your credit card, and help with your productivity at work. Before you donate to charity, however, make sure you are donating to an IPC-registered charity and your credit card will qualify your purchase in their rewards scheme. In this, your philanthropic endeavors will help both your community and you.