Legal Guidelines for Fundraising Events for Canadian Charities

If you organize a charity fundraising event, you are not authorized to provide receipts for donations made on behalf of the charity. Only the charity has the authority to issue such receipts. Furthermore, providing its registration number for receipting purposes may cause a charity to lose its registration.

To provide receipts for a fundraising event or activity, it is essential to evaluate the worth of the advantages offered to all people involved. These advantages must be deducted from the gift total prior to being able to provide a receipt for the eligible sum. The process of establishing the eligible amount of a gift is known as split receipting.

"Intention to make a gift" threshold?

If the worth of the advantage gained exceeds 80% of the gift’s value, it is typically deemed that the intention to contribute the gift is not genuine, and a receipt may not be issued.

Understanding Charity Tax Receipt Authority

Who Can Issue Tax Receipts?

Only registered charities have the legal authority to issue official tax receipts for donations. As an event organizer, you cannot provide these receipts yourself, even when organizing events on behalf of a charity.

Critical Warning: Never share a charity's registration number for receipting purposes. This serious mistake can cause the charity to lose its official registration status with the Canada Revenue Agency (CRA).

Split Receipting: Calculating Eligible Donation Amounts

Split receipting determines how much of each contribution qualifies for a tax receipt. You must evaluate and subtract all benefit values from the total donation amount before issuing receipts.

The 80% Gift Intention Rule

Canadian tax law requires genuine gift intention for all charitable donations. If benefits exceed 80% of the total donation value, the CRA considers the intention to make a gift as not genuine, and no tax receipt can be issued.

This threshold protects the integrity of charitable giving by ensuring donors make genuine contributions rather than purchasing goods or services.

Benefits That Must Be Deducted From Donations

Primary Event Benefits

These advantages form the main purpose of your fundraising event and must be subtracted from donation amounts:

Fundraising Dinners:

• Meal costs
• Entertainment value
• Venue access fees

Golf Tournaments:

• Green fees and course access
• Cart rental charges
• Meal and refreshment costs

General Events:

• Ticket value equivalent to similar commercial events
• Activity participation fees

Additional Benefits to Calculate

Unless the De Minimis rule applies, deduct these benefit values from gift amounts:

• Door prizes and giveaways
• Complimentary gifts (pens, keychains, branded items)
• Achievement prizes (closest-to-the-pin awards, contest winnings)

Benefits You Can Usually Ignore

Celebrity Appearances: The presence of celebrities at charity events typically doesn't count as a taxable benefit. However, if you charge extra fees for exclusive access or activities with specific individuals, those amounts cannot qualify for tax receipts.

Minimal Odds Prizes: Golf tournament closest-to-the-pin prizes can be excluded since the CRA considers winning odds nominal.

Charity Auction Receipt Rules

Receipts for Donated Auction Items

Contributors who donate items for charity auctions can receive tax receipts based on fair market value at the time of donation. However:

• Fair market value must be clearly determinable
• Items may be subject to deemed fair market value rules
• No receipt can be issued if value cannot be established

Receipts for Auction Purchases

Auction buyers can receive tax receipts only when specific conditions are met:

• Fair market value must be calculated and disclosed to all bidders before the auction
• Winning bids must stay under 80% of the posted item value
• The purchase must meet genuine gift intention requirements

Pro Tip: Set minimum bids at 125% of fair market value to ensure receipt eligibility for winning bidders.

Want to learn about broader fundraising compliance beyond events? Read our full guide on Nonprofit Fundraising Rules and Guidelines in Canada.

Advantages that are the objective of the event

In order to calculate the eligible amount of a gift, it is necessary to deduct the value of any benefits provided from the total gift amount. Some examples of these advantages include:

• The cost of a meal provided at a fundraising dinner
• The price of green charges, cart rentals, and meals provided at a golf tournament
• A ticket price similar to that of a fundraising event.

Other advantages

To determine the eligible amount of a gift, the worth of any advantages must be deducted from the gift amount, unless the De Minimis rule is applicable. Some examples include:

• Door prizes
• Complimentary gifts such as pens and key chains
• Accomplishment prizes such as the closest-to-the-pin reward.

Note: The presence of celebrities at charity events is generally not deemed an advantage. However, if an extra fee is charged to participate in an activity (such as dinner or golf) with a specific individual, it cannot be regarded as a gift. Therefore, a receipt cannot be issued for the additional amount paid.

Auctions

Issuing receipts for donated auction items:

• A receipt may be given to the contributor for the item’s fair market value as of the moment it is contributed to the organization.
• The contributed item could potentially be subjected to the rule of deemed fair market value.
• In the event that the donated item’s fair market value is unable to be determined, a receipt may not be issued.

Providing receipts for auction acquisitions:

• The fair market value of the item must be calculated and disclosed to all individuals ahead of the auction for a receipt to be issued.
• The winning bid must not surpass 80% of the posted value of the item, as this would not meet the threshold for a genuine gift.

Tip: To fulfill the threshold for intending to make a gift, the organization can determine the minimum bid by multiplying the item’s fair market value by 125%.

Fundraising dinners

Here are some general guidelines and examples for valuing various items at fundraising events:

• Meals should be valued at the price that a comparable facility would charge for a similar meal. This can be based on the restaurant's regular price, group or banquet rates, or similar factors.
• Complimentary items should be valued at their typical retail price.
• Door and achievement prizes should be valued based on their retail value, and the total value should be prorated per ticket sold.
• Entertainment should be valued at the typical and up-to-date ticket price.
• If raffle tickets are accounted for in the admission cost, the prizes will be considered as door prizes, and the value of the prizes must be included when calculating the amount of the advantage. However, if the raffle is performed separately, it will be deemed a lottery, and the cost of the raffle tickets will not be treated as a gift. The value of the different prizes that can be won should not be factored in when calculating the amount of the advantage.
• Generally, auctions at fundraising events are not considered an advantage.

Golf tournaments

Below are some general instructions and instances to assess the value of different items at golf events:

• The value of green fees for golf events is determined based on the standard cost charged to non-members using the course at the time of the event, whether it is an individual fee or a group fee. Members are not allocated an amount if they are not typically required to pay green fees.
• Cart rentals should be valued using their usual price.
• Meals are valued at the standard price charged for separate meal purchases at the course, either at the group or individual rate.
• Giveaways are valued at their typical retail cost.
• Door and accomplishment prizes are valued by their retail worth, totaled, and prorated per ticket sold.
• Closest-to-the-pin prizes can be excluded since the odds of winning are considered nominal by the CRA.
• Raffle tickets - If accounted for in the participation fee, the prizes are considered door prizes and are factored in to determine the sum of the advantage. Though, if the raffle is performed separately, it is deemed a lottery, and the price of the raffle tickets should not be treated as a gift. When calculating the amount of the advantage, you should not consider the value of the different prizes that could be won.

Note: According to the CRA, purchasing a lottery ticket is not considered a gift, and a receipt cannot be issued for the ticket's cost.

How to Organize a Successful Charity Fundraising Event

Pre-Event Planning and Legal Compliance

Partner with Registered Charities Early: Establish clear agreements about receipt processing, registration number protection, and benefit calculation responsibilities.

Document Everything: Maintain detailed records of all costs, benefits, fair market values, and pricing decisions for CRA compliance.

Understand Your Limitations: Remember that you cannot issue tax receipts or share charity registration numbers under any circumstances.

Event Structure for Maximum Donations

Keep Benefit Costs Low: Design events where benefits represent less than 80% of ticket prices to ensure receipt eligibility.

Separate Premium Experiences: Offer high-value experiences as separate paid add-ons rather than including them in base ticket prices.

Strategic Auction Planning:

• Get professional appraisals for high-value donated items
• Display fair market values prominently before bidding begins
• Set minimum bids at 125% of fair market value

Handle Raffles Properly: Separate raffle sales from main event admission to avoid benefit calculation complications.

Working Successfully with Charities

Before Event Planning:

• Understand their specific receipt policies
• Confirm their compliance procedures
• Align event goals with their mission

During Event Planning:

• Provide clear benefit calculations for their review
• Respect their authority over tax receipt decisions
• Keep them informed of all cost and pricing changes

After the Event:

• Supply detailed financial records promptly
• Let them handle all receipt processing
• Support their follow-up donor communications

Common Compliance Mistakes to Avoid

• Never issue receipts yourself - only charities have this legal authority
• Never share charity registration numbers with vendors, venues, or participants
• Don't ignore benefit values when calculating eligible donation amounts
• Don't treat lottery tickets as donations - they cannot receive tax receipts
• Don't exceed the 80% benefit threshold when setting ticket prices
• Don't assume celebrity presence adds benefit value unless charging premium access fees

Maximizing Charitable Impact

Smart Pricing Strategies:

1. Set ticket prices where benefits stay well under 80% of total cost
2. Offer multiple giving levels with different benefit packages
3. Provide "donation only" options with minimal or no benefits
4. Create VIP experiences as separate premium purchases

Donor Communication:

1. Clearly explain what portions of payments qualify for receipts
2. Provide benefit breakdowns in advance
3. Help donors understand the 80% rule implications
4. Facilitate direct donation opportunities beyond event participation

Long-term Relationship Building:

1. Create annual events that build donor loyalty
2. Develop corporate sponsorship packages with clear benefit structures
3. Establish donor recognition programs that comply with benefit rules
4. Build databases that respect privacy while enabling future fundraising

Conclusion

Successful charity fundraising events balance generous giving opportunities with strict compliance requirements. Focus on creating meaningful experiences while keeping benefit costs reasonable, and always work closely with registered charities to ensure proper receipt handling.

By understanding split receipting rules, the 80% gift intention threshold, and proper benefit valuation methods, you can organize events that maximize charitable contributions while maintaining full CRA compliance.

Remember: your role is event organization and donor engagement - leave tax receipt processing to the registered charities who have the legal authority and expertise to handle these critical responsibilities properly.

Need Expert Guidance on Charity Fundraising Compliance?

Navigating charity law and fundraising regulations can be complex. If you're planning a fundraising event or need clarity on tax receipt requirements, the experienced team at B.I.G. Charity Law Group is here to help. We specialize in Canadian charity law and can guide you through every aspect of compliant fundraising.

Contact B.I.G. Charity Law Group today for personalized legal advice on your charity fundraising initiatives. Reach us at dov.goldberg@charitylawgroup.ca, call 416-488-5888, or visit CharityLawGroup.ca to learn how we can support your charitable goals while ensuring full regulatory compliance.

Frequently Asked Questions

Here are quick answers to the most common questions about organizing charity fundraising events and understanding Canadian compliance requirements.

How do you organize a fundraising event for charity?

Partner with a registered charity and keep benefit costs under 80% of ticket prices for tax receipt eligibility. Calculate all benefit values (meals, entertainment, prizes), set appropriate ticket prices, and document everything carefully. Only the charity can issue tax receipts - never provide these yourself or share their registration number.

What are the rules of fundraising?

Follow the 80% gift intention rule - if benefits exceed 80% of donation value, no tax receipt is allowed. Calculate and subtract all benefits through split receipting. Only registered charities issue tax receipts, organizers cannot share registration numbers, and fair market values must be disclosed for auction items before bidding.

What is the difference between fundraising and donations?

Donations are direct gifts with no benefits, allowing full tax receipts. Fundraising provides benefits, so only the amount above benefit value qualifies for receipts. A $100 dinner with $30 meal value creates a $70 tax-deductible donation. Fundraising requires benefit calculations while direct donations don't.

How does charity fundraising work?

Events generate revenue while providing benefits to participants. Calculate fair market values of all benefits and subtract from participant payments. The remaining amount qualifies as tax-deductible if it exceeds 20% of total payment. The charity issues receipts and handles compliance while organizers manage event planning.