Fundraising events - issuing receipts

Official donation receipts are referred to as receipts on this webpage.

Important notice

If you hold a fundraising event for a charity, you cannot issue receipts for donations received on behalf of that charity. Only the charity itself can issue receipts for donations. If a charity lends its registration number for receipting purposes, its registration could be revoked.

Table of contents


The following guidelines are for registered charities and other qualified donees.

General guidelines for all fundraising events or activities

To issue a receipt for a fundraising event or activity, you must first determine the value of the benefits provided to all participants. These benefits are considered an advantage and must be deducted from the amount of the gift before you can issue a receipt for the eligible amount . The method of calculating the eligible amount of a gift is called split receipting .

"Intention to make a gift" threshold

When the value of the advantage received is more than 80% of the value of the gift, it is generally considered that there is no true intention to make a gift; therefore, you cannot issue a receipt.

Advantages that are the purpose of the event

The value of these advantages must always be deducted from the amount of the gift to determine the eligible amount. Examples:

  • the meal at a fundraising dinner
  • the green fees, cart rental, and meal at a golf tournament
  • a comparable ticket price for a fundraising concert 

Other advantages

The value of these advantages must be deducted from the amount of the gift to determine the eligible amount unless the de minimis rule applies. Examples:

  • door prizes
  • complimentary gifts (pens and key chains)
  • achievement prizes (the prize for the longest drive at a golf tournament)

Note

The attendance of celebrities at fundraising events is not viewed as an advantage per se. When an additional amount is paid to participate in an activity (for example, dinner, golf, etc.) with a particular individual, it is not considered a gift. You cannot issue a receipt for the additional amount paid.

Golf tournaments

General information and example

  • Green fees are calculated at the rate (group or individual) normally charged to non-members playing the course at the time of the event. However, no amount is allocated to members if they are not normally required to pay green fees.
  • Cart rentals are valued at their regular cost.
  • Meals are valued at the price (group or individual) normally charged if the meals were purchased separately at the course.
  • Complimentary items are valued at the amount that would normally be paid for the merchandise at a retail outlet.
  • Door and achievement prizes are valued at their retail value, totalled, and prorated per ticket sold.
  • Hole-in-one prizes can be excluded. The Canada Revenue Agency (CRA) accepts that the chance of winning a hole-in-one prize is nominal.
  • Raffle tickets – if they are included in the participation fee, the prizes are treated as door prizes and must be taken into account in determining the amount of the advantage. However, if the raffle is conducted separately, this is essentially a lottery, and the cost of the raffle tickets is not considered a gift. You should not take into account the value of the various prizes that could be won when determining the amount of the advantage.

Note

It is the CRA’s view that the purchase of a lottery ticket is not a gift; therefore, you cannot issue a receipt for the cost of the ticket.

Example

 

  • A charity holds a fundraising golf tournament and sells 100 tickets for $200 each.
  • Some of the participants are members of the golf course and do not have to pay green fees.
  • The regular green fee for non-members on that day is $50.
  • The cart rental (included in the participation fee) is normally $20.
  • The retail value of supplied food and beverages (excluding GST/HST, PST and gratuities) is $30.
  • Each participant receives golf balls with a retail value of $15.
  • The retail value of door and achievement prizes is $2,000 ($2,000/100 or $20 per ticket sold).
  • Raffle tickets for a chance to win a number of other prizes are sold separately.
  • The hole-in-one prize is the use of an automobile for one year.

Calculation of eligible amount

Participation fee (the gift)                                                                                                                            $200

Less advantage:

      Green fee                                                                                               $50

      Cart rental                                                                                              $20

      Food and beverage                                                                                $30                        

      Complimentary items (golf balls, door and achievement prizes)           $35

      Hole-in-one prize                                                                                   $  0

Total advantage                                                                                                                                          $135

Eligible amount (non-members)                                                                                                                  $  65

For non-members, the amount of the advantage is $135 and a receipt may be issued for the eligible amount of $65. 

For members who do not have to pay green fees, the green fee of $50 can be excluded from the advantage and a receipt may be issued for the eligible amount of $115.

The de minimis threshold is $20 (the lesser of $75 or 10% of the $200 participation fee). Since the total value of the complimentary items and the door and achievement prizes to each participant ($35) exceeds the de minimis threshold, you must include these items in the total amount of the advantage.

If the total advantage had exceeded $160 (80% of the $200 participation fee), it would not have met the intention to make a gift threshold, and a receipt could not have been issued.

Questions and answers

Q. 1. If a private foundation holds an annual golf tournament, is it considered to be carrying on a business?

A. 1. No. An annual golf tournament held by a charity is considered a fundraising event.

Q. 2. When calculating the eligible amount of the gift for participants at a golf tournament, is the calculation based on the number of participants or the number of tickets sold?

A. 2. The calculation is based on the number of tickets sold.

Q. 3. If a company sponsors a hole by making a donation to a charity, is this considered a gift?

A. 3. This depends on whether the company receives an advantage as a result of the donation. If the company receives nothing in return, it has made a gift and you can issue a receipt. However, when a company sponsors a hole, it is the CRA’s experience that this generally involves some form of recognition of that gift.

Providing simple recognition of the gift will not, generally, constitute an advantage to the company (for example, naming a hole after the company and placing a small, discreet sign at the hole). However, as the level of recognition increases, it is likely that the company is receiving a benefit in the form of advertising. For more information, go to Sponsorship.

Q. 4. If a business buys a block of tickets to a charity golf tournament, should the charity issue the receipt(s) in the name of the golfers who use the tickets or in the name of the business?  

The charity must issue the receipt in the name of the true donor(s) of the gift. If the business is the true donor of the funds, the receipt must be issued in the name of the business. If the employees buy tickets for the tournament by giving the money to the business, and the business issues a cheque for the tickets, the employees are the true donors. In this case, the charity should ask the business for documents showing that the individuals bought the tickets before issuing receipts in the name of each golfer. For more information, see Policy Commentary CPC-010, Issuing a receipt in a name other than the donor’s.

Q. 5. Can a charity have an organization hold a golf tournament on its behalf?

A. 5. Yes. A charity can hire a third-party organization or retain the services of a fundraiser as an agent or other contractor to organize the golf tournament. However, the charity should maintain control over all the funds received from the event and over any receipts issued. For more information, see Policy Commentary CPC-026, Third-party fundraisers.

Q. 6. If an organization advises a charity that they held a golf tournament on its behalf, can the charity issue receipts to the attendees?

A. 6. No. When an activity is carried on that a charity is not aware of, it is not an activity of the charity, so the charity cannot issue receipts. However, as mentioned above, a charity can hire a third-party organization as an agent to carry on activities on its behalf.

Auctions

General information and example

  • Receipting for items donated for an auction:

    • A receipt can be issued to the donor for the fair market value of the item at the time it is donated to the charity.
    • The donated item may be subject to the deemed fair market value rule.
    • If the fair market value of the donated item cannot be established, you cannot issue a receipt.
  • Receipting for items bought at an auction:

    • The fair market value of the item must be established and made known to all bidders in advance of the auction, or you cannot issue a receipt.
    • The winning bid must meet the intention to make a gift threshold (the posted value of the item cannot exceed 80% of the winning bid).

Tip

The charity can calculate the minimum bid that is required to meet the intention to make a gift threshold by multiplying the fair market value of the item by 125%.

Example

 

  • A bike is donated to a charity for an auction.
  • The fair market value of the bike at the time of donation is $400.
  • The fair market value of the bike is posted at the auction.
  • The winning bid for the bike at the auction is $550.

Calculation of eligible amount

Winning bid (the gift)                                                                                                                                    $550

Less advantage:

   Bike                                                                                                                                    $400

Total advantage                                                                                                                                           $400      

Eligible amount                                                                                                                                            $150                                                                                                                                         

The amount of the advantage is $400 and a receipt may be issued to the winning bidder for the eligible amount of $150.

The fair market value of $400 for the bike was established at the time it was donated, and a receipt may be issued to the donor for $400.

If the fair market value of the bike was not made known to bidders in advance of the auction, a receipt could not be issued to the winning bidder.

The minimum bid required to meet the intention to give threshold is $500 (fair market value x 125%).

If the total advantage had been greater than $440 (80% of the $550 winning bid), it would not have met the intention to make a gift threshold and a receipt could not have been issued to the winning bidder.

Questions and answers

Q. 1. Can receipts be issued for items donated for sale at an auction?

A. 1. Yes. However, the fair market value of the item must be determined before a receipt can be issued. Keep in mind that gifts of services cannot be receipted. For more information, go to Gifts of services

Q. 2. Can a charity issue a receipt to the donor for the appraised value of a donated item if the item is sold at the auction for less?

A. 2. Yes. The charity may issue a receipt to the donor for the appraised value of the donated item even if the item is sold for less at the auction.

Q. 3. If a business owner donates a gift certificate to a charity for the purchase of goods and services from his business, can the charity issue a receipt to the business (the issuer)?

A. 3. No. When the issuer donates a gift certificate directly to a charity, there has not been a valid transfer of property. As a result, the issuer is not entitled to a receipt at the time the donation is made. The issuer may be eligible for a receipt if the charity redeems the certificate for property. For more information, see Guidance CG-007, Donation of gift certificates or gift cards.

Q. 4. Does it make a difference for receipting purposes if the auction is a silent auction?

A. 4. No. It does not make a difference.

Fundraising dinners

General information and example

  • Meals are valued at the price that would be charged for a comparable meal provided by a comparable facility. If the event is held at a restaurant, then the price the restaurant would charge a regular customer is the comparable value. It is also acceptable to take into account group or banquet rates.
  • Complimentary items are valued at the amount that would normally be paid for them at a retail outlet.
  • Door and achievement prizes are valued at their retail value, totalled, and prorated per ticket sold.
  • Entertainment is valued at the usual and current ticket price.
  • Raffle tickets – if they are included in the attendance fee, the prizes are treated as door prizes and must be taken into account in determining the amount of the advantage. However, if the raffle is conducted separately, this is essentially a lottery, and the cost of the raffle tickets is not considered a gift. The value of the various prizes that could be won should not be taken into account in determining the amount of the advantage.
  • Auctions - Generally, an auction at a fundraising dinner will not be viewed as an advantage.

Example

 

  • A charity holds a fundraising dinner and sells 500 tickets for $250 each.
  • A comparable meal could be purchased for $100 (excluding GST/HST, PST, and gratuities).
  • The door prizes are a trip with a value of $3,000 and jewellery with a retail value of $500 ($3,500/500 or $7 per ticket sold).
  • Each attendee receives a logo pen and a key chain with a total retail value of $10.
  • There is a performer at the dinner. The usual and current ticket price to see that performer is $50.
  • A silent auction will take place at the dinner.

Calculation of eligible amount:

Ticket price (the gift)                                                                                                                                     $250

Less advantage:

      Meal                                                                                                            $100

      Complimentary items (pen & key chain, door prizes)                                 $    0

      Entertainment                                                                                             $  50

Total advantage                                                                                                                                            $150

Eligible amount                                                                                                                                             $100

The amount of the advantage is $150 and a receipt may be issued for the eligible amount of $100. 

The de minimis threshold is $25 (the lesser of $75 or 10% of the $250 ticket price). The total value of the complimentary items and the door and achievement prizes to each attendee ($17) fits within the de minimis threshold.  Therefore, the value of these items does not need to be included in the total amount of the advantage.

If the total advantage had exceeded $200 (80% of the $250 ticket price), it would not have met the intention to make a gift threshold and a receipt could not have been issued.

Questions and answers

Q. 1. Does a charity have to deduct the value of a dinner as an advantage, if the dinner did not cost the charity anything?

A. 1. Yes. The fair market value of the advantage must be deducted to calculate the eligible amount of the gift, regardless of the cost to the charity for the dinner.

Q. 2. If a charity hires a local band to provide the entertainment at a fundraising dinner, does the value of the entertainment have to be included as an advantage?

A.2. This depends on the identity of the entertainer. If a member of the public would normally purchase a ticket to attend a performance by the entertainer, then the charity would have to include the value of the usual and current ticket price as an advantage, regardless of what it pays the entertainer to perform at the event.  

Q. 3. If a volunteer bakes a cake for a charity fundraising dinner, can the charity issue him a receipt?

A. 3. No. Unless the volunteer is a caterer or professional baker, valuing his skill, time, and effort for preparation of the cake is not possible. Since the fair market value of the gift cannot be determined, a receipt cannot be issued. The charity could reimburse the volunteer for the cost of the ingredients and the volunteer could give all or part of the payment back to the charity as a gift, so long as the amount is given voluntarily. For more information, see Policy Commentary CPC-012, Out-of-pocket expenses.

Q. 4.  If someone holds a dinner party at their home as a fundraiser for a charity, can the charity issue receipts to the attendees?

A. 4. No. If someone cooks a meal in their home, the fair market value of that meal could not be determined. It may be possible to determine the value of the ingredients, but unless the cook is a professional who sells meals on the open market, valuing the skill, time, and effort for the preparation of the meal is not possible. When the fair market value of an advantage (in this case, the meal) cannot be determined, you cannot issue a receipt.

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References

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