D14. How does our charity determine the eligible amount of the gift?
Your charity can issue an official donation receipt for only the “eligible” amount of the gift. This is the fair market value of the gift minus the fair market value of the advantage.
A donor donates $5,000 to a registered charity.
As a thank you, the registered charity gives the donor a $250 hotel stay.
The eligible amount of the gift is calculated as follows:
- The fair market value of the property transferred to the charity
- Less the fair market value of the advantage to the donor
Equals the eligible amount of the gift
Although the $250 is less than 10 per cent of $5,000, the de minimis threshold still applies, since the amount is more than $75.
- If there is no advantage to the donor or if the advantage is of a de minimis amount, the eligible amount will be the same as the donation amount (and it is not a split-receipting situation).
- If there is an advantage to the donor, the amount of the gift is not the same as the amount that appears on the official donation receipt (and it is a split-receipting situation).
When completing this calculation, a charity must keep in mind the concept of the “intention to make a gift” threshold. In order to meet this threshold, the amount of the advantage received by the donor cannot exceed 80 per cent of the fair market value of the total property transferred. And the advantage received by the donor must not exceed the de minimis amount.