Charities Connection

CRA news, information, and events for registered charities

Charities Connection is an electronic publication that gives registered charities information on technical issues, new guidance and policy changes, CRA initiatives, and reminders.

 No. 8 – August 2011

Keep your eye on the ball

Summer is here and for many people summer means golf. An annual golf tournament is a popular and fun way to raise funds for your charity. However, there are a few things you must keep in mind.


In most cases, a gift is a voluntary transfer of property without valuable consideration to the donor. However, under proposed changes, a transfer of property for which the donor received an advantage will still be considered a gift for purposes of the Income Tax Act as long as we are satisfied that the transfer of property was made with the intention to make a gift. An intention to make a gift will generally be presumed when the fair market value (FMV) of the advantage does not exceed 80% of the FMV of the transferred property.

Where a gift has been made, the charity may issue an official donation receipt for the eligible amount of the gift. This is the amount by which the FMV of the gifted property exceeds the amount of an advantage, if any, received or receivable for the gift. The advantage is generally the total value of any property, service, compensation, use or any other benefit that the donor is entitled to as partial consideration for, or in gratitude for, the gift. The advantage may be contingent or receivable in the future, either to the donor or a person or partnership not dealing at arm’s length with the donor. If the FMV of an advantage cannot be reasonably determined, no receipt can be issued.

For fundraising golf tournaments, a charity can issue a receipt to a participant for the part of the cost of entering that qualifies as the eligible amount of the gift. For example, green fees that would ordinarily be charged to a non-member playing the course at the time of the event would be considered a benefit and therefore an advantage to be included in determining the eligible amount. However, for members there would be no benefit and thus no advantage for green fees if membership already includes full green fees.

Income Tax Technical News No. 26 gives detailed information about determining the value of the various components that may be present at a fundraising golf tournament.

Corporate purchases and sponsorships

If a company buys a block of tickets for a golf tournament for its employees to participate, any receipt for the eligible amount of a gift goes to the purchaser (i.e., the company).

Let’s say that a company sponsors a hole by transferring property to a charity. Under the right circumstances the transferred property could be considered a gift and therefore eligible for a receipt. Whether the FMV of the property transferred to a charity to sponsor a hole is the eligible amount of a gift depends on whether the company receives an advantage as a consequence of the transfer of property to the charity. If nothing is received in return for the sponsorship, the charity may issue a receipt. However, when a company sponsors a hole, it typically receives some form of recognition of that gift.

It is the Directorate’s position that providing simple recognition of a gift does not, generally, constitute an advantage to a donor. In this context, naming a hole after a donor company and/or placing a small, discrete sign at the hole is not necessarily an advantage. However, as the level of recognition increases (e.g., size, quantity and visibility of signage), it is likely that the company is receiving a benefit in the form of advertising. In order to issue a receipt, the value of this advantage must be calculated in determining whether a gift has been made and its eligible amount. If the value cannot be reasonably determined, then no receipt can be issued.

Alternatively, a company may be able to deduct the cost of the sponsorship as an advertising expense to the extent it was incurred to earn income and as long as the company doesn’t claim the amount twice, both as an expense and gift.

Third party fundraisers

A registered charity can engage a third-party organization or retain a fundraiser as an agent or other contractor to organize a fundraising event such as a golf tournament. However, the charity should maintain control over all the monies that are received as part of the event, and over any receipts that are issued. For more information on fundraisers, see Guidance CPS-028, Fundraising by Registered Charities.

In particular, if the charity does not run the event substantially by itself through its own employees or volunteers, it should:

  • put in place a written agreement stating the details of the fundraising arrangement;
  • make sure that tax receipts are issued only for the eligible amount of any gift and be able to demonstrate how the amount of any advantages were determined in calculating the eligible amount;
  • make sure its tax receipts are signed by an authorized individual in conformity with the Income Tax Regulations; and
  • be able to give the Canada Revenue Agency a full accounting of the monies donated to it and the receipts that were issued in return.

A registered charity can contract with an organization to carry on activities on its behalf. However, when an activity is carried on that a charity is not aware of, it is not possible to say that this is an activity of the charity. Regardless of the circumstances, it is never permissible to issue receipts on behalf of another organization. 

East Africa Drought Relief Fund

On July 22, 2011, the Government of Canada announced the establishment of the East Africa Drought Relief Fund (CIDA). For every eligible dollar an individual Canadian donates to a registered Canadian charity that is responding to the drought in East Africa, the Government will contribute a dollar to the Fund. The Canadian International Development Agency (CIDA) will allocate these funds to established Canadian and international humanitarian organizations for humanitarian assistance efforts that benefit the people most affected by the drought.

How are registered charities involved in the program?

Donors can make donations to any registered Canadian charity that is receiving donations in response to the drought. In order to have the Government set aside an equal amount to the Fund, the charity must report these eligible donations to CIDA by September 30, 2011.

What is an eligible donation?

Only monetary donations from individual Canadians are eligible. An individual can donate up to $100,000 and the donation must be specifically for responding to the drought. Donations must be made between July 6 and September 16, 2011. Donations made by corporations and donations by registered charities which were not collected from individuals for drought relief, are not eligible.

Registered charities may hold fundraising events to raise money from individuals specifically for the drought relief efforts. These amounts would be eligible even when donation receipts are not issued. A charity may gift the collected amount to another registered charity but it should be declared only once to CIDA to ensure no double-counting of donations. For more information, go to the Eligible donations section on CIDA’s website.

Declaration form

Registered charities accepting donations for the Fund must complete and send in the East Africa Drought Relief Fund Declaration Form to CIDA, declaring the amount of eligible donations received. This form must be received by CIDA on or before September 30, 2011.

Where can you find more information?

  • Canadian International Development Agency (CIDA) provides detailed information about the East Africa Drought Relief Fund including Frequently Asked Questions. CIDA’s Public Inquires Service is also available to answer any questions you may have.
  • Foreign Affairs and International Trade Canada provides information about the best ways to help during disasters and other emergencies abroad.
  • Our webpages include information about different ways charities can help. Charities can raise funds and donate them to qualified donees that are experienced in humanitarian relief. They can also carry out their own activities within the scope of their charitable objects. For more information, see Guidance CG-002, Canadian Registered Charities Carrying Out Activities Outside Canada.

Prime Minister's Volunteer Awards - Update 

Opening of the first call for nominations for the Prime Minister’s Volunteer Awards

This new award program recognizes and celebrates the exceptional contributions of volunteers, local businesses and innovative not-for-profit organizations in improving the well‑being of families and their communities. If you know a volunteer, an innovative not-for-profit organization, or a local business that makes a positive impact on your community, you can nominate them today! The first call for nominations is open between July 12 and September 9, 2011. To learn more about the Prime Minister’s Volunteer Awards, go to or call 1-877-825-0434.

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