S1. Our charity gives a very small token of appreciation to each donor. It is worth almost nothing. Must the amount as it appears on the official donation tax receipt be reduced by the cost of that token?

S1. Our charity gives a very small token of appreciation to each donor. It is worth almost nothing. Must the amount as it appears on the official donation tax receipt be reduced by the cost of that token?


Short answer

It depends on the value of the token. The token of appreciation is considered an “advantage”. How the value of the advantage influences the amount of the donation receipt is dependent on the amount of the de minimis threshold.

Long answer

Certain advantages are considered too small (known as “de minimis”) to affect the amount of the donation receipt. The de minimis threshold is the lesser of 10 per cent of the value of the property transferred or $75.

Example

A donor gives a charity $200

  • As a thank you, the charity gives the donor a tote bag worth $17
  • The de minimis threshold is the lesser of $20 (10 per cent of $200) or $75. Therefore, $20
  • The $17 tote bag is worth less than $20
  • Therefore, the receipt will show a donation in the amount $200

Example 2

A donor gives a charity $200

  • As a thank you, the charity gives the donor a sweatshirt worth $22
  • The de minimis threshold is $20 (10 per cent of $200) or $75. Therefore the threshold is $20
  • The $22 sweatshirt is worth more than $20
  • Therefore, the receipt will show a donation in the amount $178

Exception to the de minimis

De minimis does not apply to cash or near cash equivalents such as gift certificates, coupons, and vouchers.

Example 3

A donor gives a charity $200

  • As a thank you, the charity gives the donor a coupon worth $15
  • The de minimis threshold does not apply
  • Therefore, the receipt will show a donation in the amount $185