Charity Events for Education

If you’re planning a fundraising event where tax receipts will be given, there are many complexities to be aware of. From the Canadian Revenue Agency’s (CRA) perspective, fundraising events for education, just like charitable status, must align with an intricate set of rules that the third-party fundraiser and the charity they work with must follow. Here’s a breakdown of some of the key things to know before planning an event.

Working with the Charity

Firstly, as a third-party fundraiser organizer (which excludes informal fundraising efforts, such as crowdfunding and social media campaigns), you must reach out to the charity you want to support beforehand for consent to organize the event. Then work closely with them to ensure adherence to existing fundraising and donation policies. A written agreement should also be considered, suggests the CRA, with clear conditions outlining the fundraising arrangement.

“Third-party fundraising can be brilliant for charities because another person is doing most of the work,” says Toronto lawyer Mark Blumberg, partner with Blumberg Segal LLP. “But organizers should talk to the charity beforehand, understand their fundraising practices and the work and information required, so things are agreed upon ahead of time.”

A charity must be registered with the CRA in order to provide donation tax receipts. Many non-profits in Canada are not registered charities. To make sure the organization you plan to support is officially registered, visit the CRA’s website to do a quick search.

Calculating the Total Advantage

When issuing donation receipts for charity events for education, whatever guests receive at the fundraising event must be factored in. Referred to as an advantage, this means that the amount donated, less the total value of what is received, will be the amount on a receipt issued to participants. Door prizes are valued at their retail value, totaled up and then prorated based on the number of event tickets sold. Other advantages are based on the value of what was actually received by each participant, as outlined by the CRA.

Rules for raffles are dependent upon how the fundraiser is organized. If included in the event fee, then raffled off prizes are treated similarly to door prizes and their value must be taken into account when issuing receipts. However, if a raffle is conducted separately, by selling raffle tickets at the event for example, it is treated like a lottery. According to the CRA, the purchase of a lottery ticket is not a gift. Therefore, the cost of the raffle tickets is not a donation for the ticket purchaser and subsequent prizes do not have to be taken into account when calculating the advantage for event participants.

Fortunately, there is a de minimis rule that applies. This means that when the total of all advantages received are considered to have a ‘nominal value’, the charity is absolved from having to subtract these advantages when issuing receipts, according to the CRA.

Keep in mind, Blumberg says, that if the advantage a donor receives is more than 80 per cent of the value of their donation, they are not eligible for a receipt.

“It’s a very organized system and there is particular information a charity needs to work it all out,” he says.

Treating Non-Cash Gifts Appropriately

In the case of donated property or non-cash gifts, such as those sold during an auction, a receipt can be provided to the donor of the item equal to its fair market value (FMV). The winning bidder can also be issued a receipt, equal to the amount paid for the item less the FMV of the item, subject to the advantage rule.

The FMV can be tricky to determine for certain items, such as artwork, which would need to be appraised by a qualified individual to determine the most accurate FMV. Other items, such as a TV for example, are easier to value by simply sourcing the retail cost.

As mentioned, the advantage rule applies to an auction as well. Consequently, a donation receipt for an auctioned item is only issuable to the bidder if the amount of the winning bid amount paid exceeds 80 per cent of the value of that item.

“You can think of it as a minimum threshold to determine whether the bidder actually intended on making a donation,” says CPA Michael Espinoza, senior manager, national tax office, Grant Thornton LLP.

Lastly, donated services do not qualify for receipts, as they’re not considered ‘property’ by the CRA. However, if an individual provides a service, the service is paid for by the charity and then that same individual returns the payment as a gift, a receipt can be issued since two distinct transactions have taken place.

Bottom Line, Follow the Rules

Whether receipts are issued for a virtual or in-person event you are organizing – be it a dinner, golf tournament or auction – remember that only the charity can issue them. Ensuring accurate receipting of gifts is always important for charities as inaccurate or fraudulent receipting could result in revocation of charitable status.

While this article provides an overview of the rules to be followed, make sure you cover all your bases by using the CRA’s website for reference.

“Whatever you do, do it within the tax rules available, ask the right questions and stay aligned with the examples on the CRA site,” says CPA Stan Swartz, president of Toronto-based Infomoney Solutions Inc.


This article includes a general summary of detailed tax rules. Need specific tax advice? Hire a Chartered Professional Accountant (CPA) and get the best working for you. Visit the website of your provincial or regional CPA body to access a CPA directory.

Plus, with thousands to choose from and so many ways to donate, it’s tough deciding which charity to support. Here’s valuable guidance to help you make an informed decision.