Tax Receipts FAQs
Q: In the following scenarios, will an official tax receipt be issued by the Royal LePage Shelter Foundation?
1. A business or company donates an item to our silent or live auction:
A: No, a tax receipt will not be issued. When a business owner donates an item out of their inventory, they can claim 100% of the value of the item as a write off (i.e. business expense). This is more advantageous than an official donation receipt. Your office can provide a letter stating:
“Thank you for donating <> valued at <> to the <> hosted by <>. All the proceeds of this fundraiser in support of the Royal LePage Shelter Foundation will benefit our local women’s shelter, <>, and violence prevention programs in our community.”
2. A client has offered to donate a new item or piece of artwork to our silent or live auction:
A: No, the Shelter Foundation is not able to issue receipts for items that will never be in the physical procession of the Royal LePage Shelter Foundation. Because the Royal LePage Shelter Foundation would not be able to document the acquisition of this donation, we cannot issue a tax receipt for its value.
In regard to artwork, Canada Revenue Agency requires a professional appraisal to determine fair market value of the piece and the cost of obtaining this appraisal could exceed the amount of the tax receipt. As such, the Shelter Foundation does not issue receipts for gifts of artwork.
3. We’ve received gift certificates from restaurants, spas and hotels to put in our silent auction:
A: Canada Revenue Agency does not permit charities to issue tax receipts to businesses that provide gift certificates or gift cards for their services. If an individual donates a gift card, they may be entitled to a receipt but the Shelter Foundation will require written confirmation of the value of the gift card donated (e.g. a store receipt showing the amount they paid for the gift card).
4. One of our event sponsors is requesting a tax receipt:
A: A tax receipt cannot be provided for sponsorships. All sponsors will receive some form of recognition, such as their name being listed on signage or in a program, etc. Whenever you provide public recognition for a sponsorship, it’s considered advertising or marketing therefore a tax receipt cannot be issued. The sponsor is able to write off the full cost of the sponsorship as a marketing/advertising expense. You can provide a letter confirming their sponsorship similar to what is outlined in question 1.
5. The event space (or golf course) where we will be hosting our event is providing the food and dining room staff free of charge:
A: This can be considered both a donation of inventory (food) and a service. Unfortunately, Canada Revenue Agency does not permit the issuing of official donation receipts for services. You can follow the instructions given under question 1 thanking them and confirming the dollar value of the inventory and services donated.
6. We have received donations (cash and cheques) from agents and community members who want to support our event:
A: Yes, tax receipts are provided for monetary donations of $20 or more. The donation cheque must be made payable to “Royal LePage Shelter Foundation”. Please have the donor fill out a donation form or send us a list with the names, email addresses, mailing addresses and donation amounts along with your event proceeds. Requests for tax receipts must come forward at the same time as the funds are sent to the Shelter Foundation, not at a later date. Note: All tax receipts are issued by the Shelter Foundation in late February for donations made in the previous calendar year. For example, if your event is held in July 2014, donors will receive their receipt in February/March 2015.
7. A person who bought a number of items in our silent auction asks if he can get a tax receipt since it’s a charity fundraiser:
A: No, when you purchase something – even when it is in support of a charity – this is not considered a donation. You are not entitled to a tax receipt because you have received something in exchange for what you paid.
8. We are charging $150 to attend our event, but the true cost per person is only $100. We would like to give each attendee a $50 tax receipt as a registration incentive:
A: No, we cannot issue receipts in this case due to the complexity of the documentation required by CRA. Doing so would require every event cost to be determined prior to advertising the registration fee/tax receipt split (including venue fees, total food and alcohol bills, entertainment, prizes, etc.). Even after these hard costs are calculated, consideration must also be given to the benefit of the event experience (e.g. networking opportunities) and what monetary value this represents to determine the true cost of participation. Any errors or omissions would put the Royal LePage Shelter Foundation’s charitable status in jeopardy.
9. We will be selling draw tickets for $25 and would like to give tax receipts to buyers:
A: No, a receipt cannot be provided. As per Canada Revenue Agency rules, tax receipts cannot be issued for payment for a lottery ticket, contest or other chance to win a prize.
If you have a scenario related to tax receipts that is not covered above, please contact Shanan Spencer-Brown at 416-510-5750 or firstname.lastname@example.org.
To review our Charitable Tax Receipt Policy in its entirety, please click here. You can also visit the CRA website: http://www.cra-arc.gc.ca/chrts-gvng/dnrs/rcpts/menu-eng.html