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Donation Receipts

Registered charities may issue donation receipts but they are not required to do this. Issuing receipts so that donors can claim a tax deduction is one way to encourage donations. If a charity is not going to issue receipts donors should be informed about this.

Charities are not allowed to give their registration number to another organization so that another organization can issue a receipt.

To issue a receipt a charity must know...

  • that the donation meets the definition of a gift
  • the fair market value of the donation
  • the fair market value of any advantage the donor received
  • the name and address of the donor
  • the date of the donation (when the charity actually received the gift)

Definition of Gifts

A receipt can only be given for a gift of property. Property includes things like money, art, clothing and real property such as a house. Receipts cannot be issued for gifts of services.

  • If a business gives a charity a gift certificate for their business this is not considered a gift.
  • A pledge or promise to make a gift is not a gift.
  • If the donor receives something in exchange for the donation, all or some of the donation may no longer be considered a gift. Things a donor may receive include a ticket to an event, a dinner or performance at an event, the use of property, advertising, a lottery ticket or other goods or services.
  • If the donor controls how a gift can be used it is no longer considered a gift. A donor can ask that the gift be used for a particular program, but not how it is used within that program.
  • If a condition must be met for the charity to receive the donation it is not considered a gift until after that condition has been met. If a gift is given on the basis that the charity will do something in the future it is considered a gift, but if the condition is not met the money must be returned and the Directorate must be notified.
  • Giving a charity use of a property is not considered a gift.

Fair Market Value

If the gift is not cash the charity must determine the fair market value of the gift. Fair market value is what the property would sell for in an open market where buyers are acting independently of each other. If a fair market value cannot be determined then the property will not be considered a gift and no receipt can be issued.

If the fair market value will be under $1000 a professional appraisal is not required. However, the person who does the appraisal needs to be someone with the knowledge necessary to determine the fair market value of that property.

For property where the fair market is expected to be more than $1000, a professional appraisal by someone independent of the charity is strongly recommended. If the property is professionally appraised the name and address of the appraiser must be included on the donation receipt.

In all cases the charity is responsible for making sure the value on the donation receipt is accurate.

Donor Advantage

When the donor receives any advantage from the gift, the fair market value of the advantage must be subtracted from the fair market value of the gift. The donation receipt can only be for that difference. If the advantage is 80% or more of the fair market value of the gift no donation receipt can be issued. If the value of the advantage cannot be determined no donation receipt can be issued.

The fair market value of the advantage is determined in the same way it is determined for the gift itself. For example, if the donor received a theatre ticket then the fair market value of the advantage would be the ticket price.

Advantages that are minimal do not affect the fair market value of a gift. If the advantage is less than 10% of the value of gift up to a maximum value of $75 a receipt can be issued for the full value of the gift.

The minimal advantage rule does not apply if the gift is cash or the equivalent of cash (i.e. gift certificate). It also does not apply if the advantage relates to the activities at a fundraising event. For example if the donor receives their meal for free at a fundraising dinner or does not need to pay green fees at a charity golf tournament. In these cases the value of the advantage must be subtracted from the value of the gift.

Receipt Requirements

There is no set form for a charitable receipt but certain information must be included and the information must be readable and not easily altered.

The following must be included...

  • a statement that it is an official receipt for income tax purposes
  • the name and address of the charity as on file with the Canada Revenue Agency (CRA)
  • a unique serial number
  • the registration number issued by the CRA
  • the location where the receipt was issued (city, town, municipality)
  • the date or year the gift was received
  • the date the receipt was issued
  • the full name, including middle initial, and address of the donor
  • the amount and description of any advantage received by the donor
  • the amount of the gift (less any advantage)
  • the signature of an individual authorized by the charity to acknowledge gifts
  • the name and website address of the CRA

For non-cash gifts a brief description of the gift must be included, as well as the name and address of the appraiser if the gift was appraised.

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