S29. If our registered charity has a fundraising event where tickets are sold at a price higher than the fair market value of a similar event, can we issue receipts? If so, for how much?
Maybe. If there is clear evidence that the ticket price is sufficiently in excess of the usual or comparable ticket price, this means that there may be an eligible amount for donation. To determine the eligible amount for an official donation receipt, your charity has to apply the intention to make a gift threshold and the de minimis threshold for the advantage received. If the amount of the advantage is not de minimis—that is, more than the guideline—and is less than 80 per cent of the actual ticket price, you may issue an official donation receipt for the difference. The example illustrates the calculation.
If there is no reasonably comparable event, then no part of the ticket price can be considered as an eligible amount for donation.
- Tickets are sold for $200 each to a fundraising concert featuring a well-known performer;
- Each participant receives a T-shirt that normally sells for $20 and a CD that retails at $15;
- The same performer had put on a similar (and non-fundraising) concert six months earlier and the ticket price was $100;
The total value of the complementary items is $35. Since $35 exceeds the lesser of 10 per cent of $200 ($20) and $75, it is not de minimis. Accordingly, the complementary items are regarded as an advantage and must be taken into account in determining the eligible amount for donation.
- Actual ticket price $200 less comparable non-charity ticket price of $100 and advantage of $35 ($200 - $135) brings the eligible amount for a receipt to $65.
- Since the amount of the advantage ($135) does not exceed 80 per cent of the actual ticket price (80% x 200 = $160), a tax receipt for the donation may be issued for $65.