In the spirit of giving, who better recognizes the value of donations than registered charities and not-for-profit organizations (NPOs) themselves? Often, NPOs and registered charities help other registered charities reach their objectives. For instance, a local pet shelter may donate to Vets Without Borders because they recognize the importance of the work they do.
In this scenario, the Canada Revenue Agency (CRA) reminds registered charities that there is no need to issue an official donation receipt when receiving gifts (cash or gifts in kind) from other registered charities. Donation receipts are required for tax deduction or credit purposes only; registered charities generally do not pay income tax, and therefore do not require donation receipts.
However, if Vets Without Borders were to recruit local pet shelters to assist them in an advertising or marketing capacity, this would no longer be the case of a gift. Remember to be mindful of the definition of a “gift” itself. Examples of transactions that do not qualify as gifts include gifts of services, such as the previous example, non-cash gifts with indeterminable market fair value, or the lease of premises. For further information on gifts, and a more comprehensive list of non-gift transactions, visit the CRA here.
For any further information, please contact me at firstname.lastname@example.org or call 519-822-9933 x310.
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