Ensure That Donation Receipts Meet Legal Requirements

by Danielle Bloom

1 min read

Nonprofits and charities officially registered in Canada are not required by law to distribute donation receipts to donors. However, donors cannot claim a tax credit or deduction without a proper receipt. For transparency purposes, if you choose not to provide a donation receipt, it’s important to let your donor know of your policy.Organizations may only provide donation receipts for qualified gifts given freely and without exchange of services, conditions, or advantages. Gifts that may be ineligible for a donation receipt include donations made in exchange for admission to special events, raffle tickets, gift certificates, and certain types of membership fees.Deductible charitable gifts take many forms including cash, property, and other goods. When it comes to receipt generation, cash donations are more straightforward. To determine the value of noncash donations, charities must determine the fair market value. Charities have the authority to determine the FMV of an item worth $1,000 or less. The Canada Revenue Agency suggests hiring an appraiser for Items valued over $1,000.All donation receipts must include the following: name and address of the charity, the nonprofit’s specific charitable registration number provided by the CRA, total gift amount, amount of gift eligible for tax credit or deduction, amount and description of any donor advantage, location where the receipt was issued and the date of issue, date the gift was made, name and address of the donor, authorized signature from the nonprofit, and the CRA name and website link.For any noncash gifts, a donation receipt must also include the fair market value for donations of property or goods and the name and contact information for the appraiser, if applicable.Donation receipts help keep your nonprofit or charity’s records organized and provide your donors a worthwhile tax credit or deduction.

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