Who is the true donor of this gift? – CRA Educational Video
Our charity received an anonymous gift. Since we do not have a name and address, do we have to issue a tax receipt? If we have to issue a tax receipt for the donation, how should we do it?
Short answer
No. Your charity is not required to issue official donation receipts for all donations.
Long answer
Paragraph 3501(1)(g) of the Income Tax Regulations requires that an official donation receipt show the name and address of the donor (and for an individual, his or her first name and initial).
But the Canada Revenue Agency has made an administrative decision to allow registered charities to issue official donation receipts for anonymous gifts if these procedures are followed:
- the donor establishes an agency or trust agreement to make the anonymous gift
- the donor appoints an agent for the purpose of making a gift on his or her behalf
- the agent agrees to hold the funds in trust for the donor
- the donor directs the agent to make a gift to a registered charity on the donor’s behalf
- the agent agrees to direct the registered charity to issue a receipt in the amount of the gift in the name of the agent in trustand
- the agent agrees to deliver the receipt to the donor for the purpose of establishing the details of the donation
Our charity received a donation by way of cheque written on an account held jointly by spouses. To whom do we make out the receipt?
Short answer
The charity can issue a tax receipt in either or both names of the spouses, regardless of how the cheque is endorsed, when a charitable donation is provided by cheque written on a joint account.
Long answer
If the donor specifies the name of the spouse to appear on the receipt, then the receipt should be issued as instructed.
Our charity received a donation via cheque written on an account held by a corporation. The individual who owns the corporation wants the official donation receipt made out in his name. Can we do this?
Short answer
No. Where a registered charity receives a cheque from a corporation, the charity must not issue the receipt to the individual who owns the corporation.
Long answer
The charity may only issue a receipt to an individual if there is evidence to show that the individual is the true donor. The donation would be, therefore,
- from that individual’s personal chequing accountor
- from a corporation in the name or on behalf of the individual.
In the second condition, the corporation should be able to show that the donation came from the shareholder’s account.
Our charity received a donation from an individual who says that she is the trustee for another individual and she wants the official donation receipt to be made out in the name of that other individual. Can we do this?
Short answer
Yes, you can issue the receipt as long as you are sure that the donation is the property of the donor.
Long answer
An individual can act as trustee or agent for another in making a gift to a registered charity. The registered charity must be reasonably sure that the name it records on the receipt is that of the true donor. When in doubt, the charity should request from the trustee a written declaration of the identity of the true donor.
When making a charitable donation, who does the Canada Revenue Agency recognize as a donor?
The Canada Revenue Agency recognizes as a donor the person whose name is on the cheque, credit card slip or other banking instrument used to make a charitable donation. If the cheque or credit card is from a joint account, the official donation receipt can be issued in either name or both names, as the donors request. If a cheque is written on a company account, the official donation receipt has to be in the name of the company.
Short answer
Yes, you can issue the receipt as long as you are sure that the donation is the property of the donor.
Long answer
An individual can act as trustee or agent for another in making a gift to a registered charity. The registered charity must be reasonably sure that the name it records on the receipt is that of the true donor. When in doubt, the charity should request from the trustee a written declaration of the identity of the true donor.
Is it possible for me to make a donation to a registered charity in my adult child’s name and have the tax receipt issued to her?
No. The Canada Revenue Agency will not allow a receipt for a charitable donation to be issued in the name of someone other than the donor. Only the person who makes the donation to the registered charity qualifies for the tax credit and can file the tax receipt with his or her tax return.
What about a situation where a company collects money from its employees to make a group gift to a charity?
In this situation, the Canada Revenue Agency looks to see if the company acted as an agent fro collecting and sending in the donations from the employees. The registered charity that receives the funds may issue receipts to each individual employee who made a donation, provided that the money can be linked to the individual and the charity provides a complete list of donors, including the donors’ names, addresses, and postal codes.
We are a small registered charity. Recently, we received a donation, and the person providing the money asked that the receipt be issued to a person other than the provider. Can we do that?
The Canada Revenue Agency stipulates that where a provider of a gift asks that an official donation receipt be issued in the name of another individual, and there is no obvious indication as to the donor, the registered charity must be reasonably sure that the name it records on the receipt is that of the true donor.
In a case like this, the charity should request a written declaration as to the identity of the donor from the person providing the donation. It is a question of fact whether a donation from one individual to a registered charity is the property of the individual or another person.
I am the owner of a small business that supports a registered company. Can I make a charitable donation by writing a cheque on my company’s bank account but have our accountant issue a charitable receipt to me personally?
No. The Canada Revenue Agency stipulates that where a registered charity receives a cheque from a corporation and is asked to issue the official donation receipt in the name of an individual who controls the corporations, the charity must refuse to issue the receipt to the individual. The charity may only issue a receipt to an individual if there is evidence to show that the individual is the true donor.
A corporation could show this if the donation is by way of a personal cheque or if the corporation makes the donation in the name of or on behalf of an individual (e.g. a corporation accounts for the donation from a shareholder in the shareholder’s account). This guideline also applies to a gift from a partnership in which both spouses are business partners.
What if a person wants to make a charitable donation to honour another person, in memory of a deceased person, or to make a gift to another person; for example the gift of digging a well in a poor village in Africa?
Many charities have programs that create this kind of charitable donation. If a person wishes to dedicate a gift to another person or make a donation in their name, then they may arrange for that person to receive a Charity Gift Card.
However, the tax receipt must be in the name of the person making the cash payment, and cannot be issued to the person being honoured or remembered, or the person in whose name that gift is given.
Additional Resources: CRA – Charities and Giving – Video Series – Gifting and Receipting
Learn more about gifting and receipting! This video series is intended to help qualified donees, including charities, to master the rules related to gifting and receipting using scenarios and questions and answers.