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Gifting and receipting - February 2009
Questions and answers
A number of questions that were not answered during the webinar are posted below with the answers.
If your question is not posted below it may mean that the CRA needed clarification to answer your question or the question was too specific to your charity's situation. In these situations, or if you would like to ask any other questions, contact our Client Service Section at 1-800-267-2384.
General questions
1. Can we issue one receipt for several donations made through the year?
Yes. Many charities will do this. However, charities should inform the donor that this is their policy at the time of donation.
2. Who in the organization can write the receipt? Anyone?
Generally, yes. The charity can decide who writes and/or issues donation receipts.
3. There is an exceptional circumstance where the amount of the advantage exceeds 80% of the value for the property (noted in Income Tax - Technical News No. 26). What are the circumstances that will satisfy the Minister?
At law, a gift is the voluntary transfer of property without consideration. If the amount of advantage exceeds the 80% (as noted in Income Tax - Technical News No. 26), then it is deemed that no gift has been made, and therefore no receipt can be issued to the donor. However, we will consider an exception to the rule on a case-by-case basis. Please contact us at 1-800-267-2384.
4. Do donors have to provide a receipt for their purchase, which they are donating to the charity, before a charitable receipt can be issued?
No. However, please refer to Pamphlet P113, Gifts and Income Tax, for information on deemed fair market value. If the donor paid for an item less than three years prior, they will only obtain a donation receipt that reflects the lesser of the cost to the donor at that time, and the current fair market value.
5. Can volunteers of a charity receive donation receipts for fuel or mileage to travel to the charity to perform the volunteer work?
A charity cannot simply issue an official donation receipt to a volunteer for the amount of the expenses, in lieu of reimbursing the expenses. However, it may be possible to issue a receipt where a right to reimbursement for the expenses has been established. See Policy Commentary CPC – 012, Out of pocket expenses for more information.
6. How can we give a receipt to someone who donates their services?
Gifts of services are not receiptable. Services are not donations, as they constitute time, skill, or effort. There is no gift made, no voluntary transfer of property. Please refer to Policy Commentary CPC-017, Gift of Services, for more information.
Gift of property
7. Someone has given us a desk and would like a charitable receipt. They do not have the original invoice, and we don't know how old the desk is. How do we determine the amount of the receipt?
Fair market value of the item must be established before issuing any donation receipt. We recommend contacting an independent appraiser if an item is presumed to be over $1000. In this case, the qualified party may be an office furniture retailer or antique dealer. If the charity cannot establish a fair market value, the charity is not obliged to accept the donation and consequently would not issue a receipt of any kind. If the item appears to be of nominal value, no receipt should be issued.
8. If someone donates something like a fridge and wants a receipt, how do we approach this situation?
Please see the answer provided in Question 7.
9. How do we issue tax receipts for artifact donations to a museum or archives?
If a museum receives donations of artifacts, fair market value must be established before a receipt can be issued. We highly recommend that if an artifact is presumed to have a fair market value that exceeds $1000, it should be appraised by an independent, qualified appraiser who has experience evaluating such items.
10. As a charity we receive enquiries from potential donor for gifts in kind such as clothing from the needle-trade industry, food, arts and crafts material, and sports equipment. The donors ask for tax receipts. The present requirement that the donations be evaluated by an independent body or person with expertise in these products is not practical. Is there a better way to encourage companies to donate inventory and recover their cost?
Please refer to Policy Commentary CPC-018, Gifts Out Of Inventory, for clarification on this matter. The charity must be able to establish the fair market value of these items out of a company's inventory before a donation receipt can be issued. It has to be sure it is a gift; that is, there is no material benefit to the company (such as advertising), in consideration for the donation. If there is, no receipt can be issued. The company can most likely claim the cost as a business expense.
11. If a grocery store donates food instead of gift certificates, they could receive a donation receipt, correct? Is it because the grocery store had to pay for the food it sells versus just issuing gift certificates?
Yes. If the food is given to a charity, a fair market value can be ascertained. There is a voluntary transfer of property without consideration, and thus a donation receipt can be issued. Please also refer to the answer to Question 10 regarding gifts out of inventory.
Fundraising events
12. If we have a bridge luncheon to raise money for scholarships with donated food, is there any way we can give a tax receipt to our members for the food donated?
Yes. If the fair market value of the donated food can be established, the donors can be receipted accordingly.
13. Can a church issue a tax receipt for a dinner where the ticket price is $30.00, and the value of the dinner is $10.00. Can a receipt be issued for $20.00 per ticket?
Yes. The eligible amount of the receipt would be $20.00. Please refer to Income Tax - Technical News No. 26 for further information on split-receipting.
Golf
14. For golf tournaments what do you do if someone does get a hole in one? Do you then calculate a benefit before issuing any tax receipts?
Please refer to Income Tax - Technical News No. 26. As the odds of an individual achieving a hole in one at a golf tournament are very low, even if there was a substantial prize to be offered as a result, there is no benefit to be calculated; therefore, the donor could receive a receipt for the appropriate amount minus any other advantages that may apply.
15. A person has suggested a golf fundraiser to raise funds for the charity, started to collect donations for the event, and then decided to hold the golf tournament out of town. She now wants the charity to pay for her expenses and travel fees for this tournament. Is this allowable-to use donations for the event to pay for her expenses for the event? Or should she be paying for her own expenses for the event and all donations go to the charity?
Reimbursement of the individual's expenses is at the charity's discretion. However, the charity should ensure there is a written agreement in place with the fundraiser before the event takes place, so that there is documentation as to what expenses are to be reimbursed or permitted.
Sponsors
16. In regards to sponsorship, if the name of the company (the sponsor) appears on any printed material or sign, can the charity issue a receipt?
Yes, a receipt can be issued to the company or the sponsor, but only if their name is appearing in any printed material or on a sign strictly as recognition for their donation to the charity. If there is advertising or promotion of the company's services along with recognition, there can be no donation receipt issued.
Auctions
17. If the auction has an entrance fee of $25 with no advantage to the entrant, can that amount be receipted?
Yes.
18. We participated in an auction where funds were being raised for a children's charity where various items were being auctioned in order to raise funds. The auction was being handled by an auction house. Would the items being auctioned off be eligible for a donation receipt?
Please refer to Income Tax - Technical News No. 26, for further information regarding this matter.
Gift certificates
19. Can a receipt be given to a restaurant that has given a gift certificate with a dollar amount stated?
No. There is no transfer of property without consideration, therefore there has been no gift made, and no receipt can be issued. Please see Policy Statement CPS-018, Donations of Gift Certificates, for more information.
20. If a store donates a gift certificate to a charity and the charity then immediately uses the gift certificate to buy items from the store, isn't this equivalent to the store donating items from its inventory, which would be receiptable?
Please refer to paragraph 8 of Policy Statement CPS-018, Donations of Gift Certificates, for further information regarding this matter.
