Receipting Guidelines

As a registered charity, Western has the ability to issue official donation receipts that provide donors with tax deductions or tax credits.   Since the issuance of a tax receipt lowers the taxable income or tax payable of donors, there are many rules and guidelines to adhere to and keeps the University's charitable status in good standing.

Advancement Services is responsible for the issuance of all charitable official donation receipts.   Determining the eligibility is done in consultation with Western's Department of Financial Services, the University's governing policy and procedures and the Canada Revenue Agency.   Please consult with Advancement Services to determine the eligibility of a gift.

If you have any questions on charitable giving, please contact the following:

Janice Van Der Klugt

Manager, Alumni and Gift Services

The University of Western Ontario

jburchil@uwo.ca

(519) 661-2111 x85321

Rosemary Lawrence-Pitt

Executive Director (Advancement)

The University of Western Ontario

rlawrenc@uwo.ca

(519) 661-2111 x85586

 

Definition of a Gift - General Rule

A gift is a voluntary transfer of property without valuable consideration. Generally, a gift is made when all of the following conditions are met:

  1. There is a transfer of property; usually cash to the charity.
  2. The transfer is voluntary and
  3. The transfer is made without any expectation in return.   No benefit of any kind may be provided to the donor or to anyone designated by the donor.

Contributions of Service

Contributing services such as time and effort is not a transfer of property and therefore cannot be issued an official donation receipt. However, a charity can pay an individual such as a lawyer, accountant, or entertainer for services rendered and later accept the voluntary return of all, or part of, the payment as a donation. In this situation, the charity can issue an official donation receipt, but the donor must declare this income when filing their income tax return.

 

 

Gift in kind

The term gift in kind refers to property other than cash, however does not include a gift of service as referenced above.   A gift in kind can be issued an official tax receipt for the fair market value of the gift on the date it was donated (the date on which ownership is transferred from the donor to the donee).   The generally accepted meaning of fair market value is the highest price that the property would bring in an open and unrestricted market between a willing buyer and a willing seller who are knowledgeable, informed and prudent, and who are acting independently of each other. Fair market value does not include any amounts paid or payable to other parties such as sales agents or sales taxes such as GST and/or PST.

 

An appraiser who did not or does not have a material interest in the property being given and is not associated with the donor or with the charity can value the gift. Dealers and other individuals whose work makes them knowledgeable about the market value of the item given can appraise it. If the gift is likely to be valued at $1000 or less, the charity may prefer to have one of its qualified staff members evaluate the gift.

An artist can set the value of a gift from his or her inventory at any amount between the gift's cost to the artist and its fair market value provided that the fair market value of the gift is greater than its cost. The artist has to include this chosen amount in income and can use the same amount to determine the tax credit available. However, the charity has to record the gift's fair market value on the receipt.

The tax receipt must include the date on which you receive the donation, a brief description of the item given, and the name and address of the appraiser if you had the item appraised.

Items of little value, such as hobby crafts or home baking will not qualify as a gift in kind for purposes of issuing a tax receipt.

Gifts of Business Inventory

A charity can issue an official donation receipt to a business for the fair market value of a gift out of inventory. Examples include a gift of bread from a bakery, or an item from the inventory of a dealer who buys and sells art, antiques, rare books, or other cultural property. Where a business donates goods out of its inventory to a charity, it has automatically received a deduction from income through its cost of goods sold. To claim a charitable tax credit or deduction, the business also has to include as income an amount equivalent to the gift's fair market value.

Sponsorship

Where a business gives cash or other property it may not necessarily be a gift to the charity.   If the expectation of the transaction is to receive a business advantage, such as promotion or advertising, the charity cannot issue an official donation receipt, as this is not considered a gift. For taxation purposes, the business can claim the transaction as a business expense.

The determination of whether a gift or a business expense will depend on disclosure of the transaction.   Always check with Advancement Services before a commitment is made regarding the issuance of any official donation receipt.

 

Official Donation Receipts

Canada Revenue Agency (CRA) regulations require that each official receipt issued by a charity contain the following information:

 

  1. A statement that it is an official receipt for income tax purposes;
  2. The charity's registration number, name and address in Canada as recorded with Revenue Canada, Charities Division;
  3. The place or locality where the receipt was issued;
  4. The day on which or the year during which the donation was received or, where property other than cash is received, the actual date of receipt;
  5. The day on which the receipt was issued when it differs from the date of the donation
  6. Amount of the gift; and
  7. The name and address of the donor

There is no regulation requiring the issuance of official receipts within a particular time frame, but it is suggested that they be issued at least by the last day of February following the year during which the gift was made.

 

Western issues official donation receipts at the time of donation, however for donors making a gift more than once a year receipts are suppressed and issued at the end of the calendar year.   All official donation receipts are mailed prior to February 28 th of each year.

 

Business Receipts

Charities should not issue official donation receipts to other charities; charities do not pay taxes, therefore do not need an official donation receipt.   In cases where a donation is received from a charity; i.e. a Foundation, a business receipt is sufficient to acknowledge the gift.

 

Business receipts are also used in the case of acknowledging other transactions that are not eligible for an official donation receipt such as contributions of service (recognition only) and sponsorship where there has been a clear advantage to the business.

 

Determining whether a business receipt or official donation receipt will be issued must be discussed in advance with Advancement Services.

 

 

Reference Sources :

 

Canada Revenue Agency

IT-110R3 Gifts and Official Donation Receipts

http://www.cra-arc.gc.ca/

 

Canadian Taxation of Charities & Donations

Arthur B.C. Drache, C.M., Q.C.

 

The University of Western Ontario

Administrative Policies & Procedures

http://www.uwo.ca/univsec/mapp/

 




This page was last updated on March 25, 2013
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