CRA Compliance

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.

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.

‍