Charity Receipts

B"H

 Thank you for your posts over the past week; they have been very informative.

 Q. Could you please give specific examples of items that do not qualify as donations for the purposes of issuing a Charitable Receipt? 

Answer:The following are examples of items that will not qualify for receiving a Charity Receipt under Canadian Charity Law:

  • Where the donor is given in return for their donation consideration which exceeds 80% of the original donation;
  • Payment of tuition fees -except as allowed, as can be reviewed at: Tuition Fees and Charitable Donations Paid to Privately Supported Secular and Religious Schools
  • Purchase of a lottery ticket;
  • Where the donation is court ordered;
  • Payment of a basic fee for admission to a program (an example of this would be daycare fees for nursery school)
  • Payment of membership fees that convey the right to attend programs and be eligible for services (note: Membership fees can be eligible for Charity Receipts where they only confer a right to vote and receive reports of the Charity's activities).

 

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A donation not eligible for a Charity Receipt

B"H

In order for a donation or gift to a Charity be eligible for a receipt, according to the Income Tax Act, it must satisfy the following 3 elements:

Voluntary: The gift must have been given by the grantor's free will. If the donor was obligated to give the gift as a result of a court order or contract, the donation would not qualify for charitable receipt;
Transfer of the donation to a Registered Charity;
Property, not services: Donations must be in the form of cash or "Gifts in Kind" (see yesterday's Q & A). Services, like cutting the lawn or lease of premises, are not "Property" and are therefore not considered gifts.   

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