What is a gift?

For a registered charity to determine whether or not a gift has been made, it must consider the following:

Was the gift made voluntarily?

The donation must be given freely. If a donation is made as a result of a contractual or other obligation (for example, a court order), it is not eligible for a receipt.

Was there a transfer of property?

• Only gifts of property are eligible for official donation receipts (for example, cash, computers, equipment).
• Gifts of service, and promises of service, are not gifts of property, and are not eligible for an official donation receipt.
• Gift certificates donated by the issuer do not constitute property and are not eligible for official donation receipts. However, a gift certificate purchased and then donated does constitute property, and may be receipted at its fair market value.
• Pledges do not constitute a transfer of property until they are fulfilled and, as such, are not eligible for an official donation receipt.

(See below for a more comprehensive list.)

Did the donor receive an advantage?

Where a donor receives an advantage or consideration for a donation, part or all of the donation may no longer qualify as a gift. See Split receipting for more information on advantages.

Examples of advantages might include:

• a ticket to an event;
• use of property; or
• a dinner and/or performance at a fundraising event.

Was the gift directed to a specific person, family, or other non-qualified donee?

• Donors cannot choose the beneficiaries of their donations. A charity must have full discretion in deciding how to allocate its funds. A donor may be able to direct a gift towards a person, family, or other non-qualified donee if they have been identified beforehand by the charity as a recipient of its charitable program. However, the charity must be able to re-allocate all donated funds to other charitable programs or activities when it deems appropriate.
• A donation subject to a general direction from the donor that the gift be used in a particular program operated by the charity is acceptable, provided that no benefit accrues to the donor or anyone not at arm's length to the donor.
• When a charity does not have ultimate control over donated funds, or when a benefit accrues to the donor from donated funds, these funds do not constitute a gift and are not eligible for an official donation receipt.

What types of transactions generally do not qualify as gifts?

• a court ordered transfer of property to a charity;
• the payment of a basic fee for admission to an event or to a program;
• the payment of membership fees that convey the right to attend events, receive literature, receive services, or be eligible for entitlements of any material value that exceeds 80% of the value of the payment;
• a payment for a lottery ticket or other chance to win a prize;
• the purchase of goods or services from a charity;
• a donation for which the fair market value of the advantage or consideration provided to the donor exceeds 80% of the value of the donation;
• a gift in kind for which the fair market value cannot be determined;
• donations provided in exchange for advertising/sponsorship;
• gifts of services (for example, donated time, labour);
• gifts of promises (for example, gift certificates donated by the issuer, hotel accommodation);
• pledges;
• loans of property;
• use of a timeshare; and
• the lease of premises.

References

• ITNEWS-17, Income Tax - Technical News No. 17
• ITNEWS-26, Income Tax - Technical News No. 26
• CSP-G01, Gift (donation)
• CSP-G03, Gift (anonymous)
• CSP-G05, Gift (designated, directed)
• CPS-018, Donations of Gift Certificates
• CPC-008, Payment to a Registered Charity
• CPC-012, Expenses Incurred by Volunteers
• CPC-017, Gifts of Services
• CPC-018, Gifts Out of Inventory
• CPC-019, Payment for Participation in a Youth Band or Choir