S28. If our registered charity has a fundraising event where door prizes are included with tickets, can we issue official donation receipts? If so, for how much?

S28. If our registered charity has a fundraising event where door prizes are included with tickets, can we issue official donation receipts? If so, for how much?


Short answer

It depends.

To find out the amount of the official donation receipt, if any, your charity must

  • determine if there was an advantage

If yes,

  • ensure that the advantage does not exceed the intention to make a gift threshold
  • determine whether the advantage exceeds the de minimis threshold
  • subtract the fair market value of the advantage from the fair market value of the donation

Example

A registered charity holds a fundraiser golf tournament and sells 100 tickets.

  • Essential elements:
    Ticket price $300
    Green fees $75
    Cart rental &nbsp$25
     Food and beverage $50
    Door prize total value $3,500 $35 average per participant
  • What is the fair market value of the donation? $300.00
  • Is there an advantage? Yes, door prizes, golf balls, green fees, the cart rental, and the food and beverages
  • At first glance, what is the fair market value of the advantage?
    • door prizes, averaging $35 per participant
    • green fees, cart rental, food and beverage valued at $150
  • Are the prizes and complementary items de minimis? Should they therefore be excluded in the calculation of the advantage?
  • Door prizes: $35 per person
  • Total advantage for the purposes of de minimis rule = $35
  • Total property transferred is $300 (ticket price): de minimis threshold is the lesser of 10 per cent of $300 ($30) or $75, so it is $30
  • $35 advantage exceeds $30 de minimis threshold
  • The door prizes are not de minimis and the amount must be included as an advantage
  • Items that are part of the purpose of the event, in this case the green fees, the cart rental, and the food and beverages are not included in the de minimis calculation.
  • But does it meet the intention to make a gift threshold? Yes.
    • Does the amount of the advantage received by the donor exceed 80 per cent of fair market value of total property transferred?
    • Total property transferred = $300 ticket price
    • Intent to give threshold = $300 x 80% = $240
    • Amount of advantage =
      $150 (green fees, cart rental, food and beverage)
      +$35 (prizes)
      $185 (total advantage)
  • An official donation receipt can be issued with an eligible amount of $115
    $300 (fair market value of donation)
    - $185 (fair market value of advantages)
    $115 (eligible amount)
More…

For more detail on golf tournaments, see