Services: website and software


(Charities cover page)

Let us look at a few examples explaining how to proceed when you receive a gift of a website or software.

Your charity hires a small software company to build a website to meet the specific needs of your charity. The company charges $250 per hour and the website will take 60 hours to build, for a total cost of $15,000. Upon completion of the website, the company suggests that, rather than invoice the charity for payment, it will be willing to accept a donation receipt for $15,000. 

Question: Can you give a donation receipt to the software company for $15,000?

If you said “No,” you are correct. Creating the website is a result of time, skill and effort. And donation receipts cannot be given for gifts of service.

Upon analyzing the charity’s specifications, the small software company states that they have a pre-designed software product, a website template that was designed just for charities. The software company sells this product for $3,000. The company is willing to freely donate this product to the charity.

If your charity accepts this as a gift, can you issue a donation receipt for the $3,000 software product?

Yes, you can issue a donation receipt for $3,000 as long as you have documents to confirm that this is the fair market value of the software product.

To summarize:

What has changed between these two examples to allow a donation receipt?

In the first example, there is no product, just the need for time, skill and effort to create the customized product. In the second example, the software company has a finished off-the-shelf software product, a property that sells in a free and open market.

(The Charities and giving website address appears on the screen:

(Icons appear on the screen with the following words beside each related icons: “What’s New” electronic list, Twitter account: @CanRevAgency and the YouTube Channel CanRevAgency)

(Hashtag CRA charities appears on the screen)

(A Canadian Flag emblem, the Canada Revenue Agency and Agence du revenu du Canada appear on the screen)

(Screen shows a copyright emblem and the wording Her Majesty, the Queen in Right of Canada, as represented by the Canada Revenue Agency, 2017)

(The last screen shows the wording CANADA and an emblem of the Canadian flag)

Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: