Gifts - General

G1. What are the essential elements of a gift or donation?

G1. What are the essential elements of a gift or donation?

Short answer

A gift must contain:

A Voluntary
Of Property
given of one's free will; the donor must not be obliged to part with the property, for instance as the result of a contract or a court order by a donor to a Registered Charity or other qualified donee either in the form of cash or a gift-in-kind; services are not property and therefore are not considered gifts

Generally, a donor transfers the property to the charity without expecting anything in return.

Long answer

A transfer of property for which a donor receives an advantage is still considered a gift for the purposes of the Income Tax Act as long as the transfer of property was made with the Intention to Make a Gift. When the donor receives an advantage, an official donation receipt can still be issued using the concept of "split receipting".

G2. What transactions or donations generally do not qualify as gifts?

G.2 What transactions or donations generally do not qualify as gifts?

Short answer

The following are examples of items that do not qualify as cash gifts or gifts-in-kind:

  • a court ordered transfer of property to a charity;
  • the payment of a basic fee for admission to an event or to a program (for example, fees for daycare of nursery school);
  • the payment of membership fees that convey the right to attend events, receive literature, receive services, or be eligible for entitlements of any materials value that exceed 80 per cent of the value of the payment (membership fees are considered gifts if they confer no more than the right to vote at a meeting and receive reports of the charity's activities - unless such reports are otherwise available for a fee.);
  • the purchase of a lottery ticket or other chance to win a prize, even though the lottery proceeds may benefit one or more charities;
  • the payment of tuition fees (except as permitted by Information Circular 75-23, Tuition Fees and Charitable Donations Paid to Privately Supported Secular and Religious Schools as seen in Tuition Fees and Charitable Donations Paid to Privately Supported Secular and Religious Schools
  • the purchase of goods or services from a charity;
  • a donation for which the fair market value of the advantage or consideration provided to the donor exceeds 80 per cent;
  • a gift in kind for which the fair market value cannot be determined;
  • contributions provided in exchange for advertising and/or sponsorship;
  • gifts of services (for example, donated time, skills, or labour); a charity can, however, pay for services rendered and later accept the return of all or a portion of the payment as a gift, provided it is returned voluntarily;
  • items of little or only nominal value, such as used clothing, hobby crafts or home baking;
  • promises of goods or services for redemption in future (for example, gift certificates) donated by the issuer or hotel accommodation);
  • pledges;
  • loans of property;
  • use of a timeshare;
  • the lease of premises;
  • a donation subject to a direction by the donor (for example, that the charity transfer the funds to specified persons or that the charity give the funds to a non-qualified donees.

Visit What is a gift?

G3. What is a "gift-in-kind"?

G3. What is a "gift-in-kind"?

Short answer

A gift-in-kind is a gift of property other than cash. It includes numerous types of property, in particular inventory, capital property, and depreciable property. Donations of real estate, stocks and bonds, and personal items are all considered gifts-in-kind.

Items of little value, such as hobby crafts or home baking, do not qualify as gifts-in-kind for the purposes of issuing a tax receipt.

A charity that receives a gift-in-kind can issue a tax receipt for the eligible amount of the gift.


For more information on gifts-in-kind, see Interpretation Bulletin IT-297
Gifts in Kind to Charity and Others

G4. Can our Charity return a gift to a donor?

G4. Can our Charity return a gift to a donor?

Short answer

In most cases, a charity cannot return a gift. Based on the law, a gift transfers ownership from the donor to the charity. Once the transfer is made, the charity’s governing documents oblige it to use the gift in carrying out its charitable purposes.

Generally, a court application is required to alter use of a donation from the purpose originally intended. If a charity is requested, or decides itself, to return a donation, it should ensure that it has the legal authority to do so.

A charity may have among its purposes the provision of assistance to other Registered Charities. If so, it may decide to transfer the gifted property to another qualified charity. As a courtesy, some charities seek a donor’s input before making such a transfer.

A charity is occasionally obliged by law to return gifts to donors. This can happen, for example, when a charity asks the public to contribute to a special project and later events make it impossible to carry out the project. Under common law, ownership of the property can revert to the donors if the project becomes impossible to fulfill.

Examples of exceptions

Assume a charity holds an fundraising appeal for a specific group of people. The project would be impossible to complete if the people died before the charity could mount its relief effort.

Assume a charity raises funds to build a new hospital wing. If the government closes the hospital, the charity would be unable to pursue its goal.


Long answer

When a gift is returned to the donor, an amended tax receipt needs to be issued and the donor may have to amend the tax return on which credit for the donation was claimed.

To avoid having to return donations, when your Charity is seeking funds for a special project, it can clearly state to potential donors what it will do with the money in the event that the project cannot be carried out or more money is collected than the project requires. For example, you can say that you will apply any unused donations to your other programs.

More information:

On October 19, 2012, CRA released a new guidance concerning the return of a gift to a donor titled CG-016 Consequences of Returning Donated Property (the “Guidance”).


G5. Can our charity give the donors something in return for their gifts?

G5. Can our Charity give the donors something in return for their gifts?

Short answer

Yes, a charity can give a token of appreciation. This token is called a “consideration” or "advantage.” Examples of advantages include pens, mugs, T-shirts, and books.

If your Charity gives a token of appreciation, the amount of the gift that appears on the official donation receipt may have to be reduced by the amount of the advantage. This is known as "split receipting”. A charity must determine the Fair Market Value of the advantage to the donor, regardless of the item’s actual cost to the charity.

Once the fair market value is determined, the charity will have to apply the de-minimis rule to determine if the advantage is “big” enough to be included in calculating the eligible amount on the receipt. If the fair market value of the advantage is minimal, the value of the donation does not have to be reduced.