Quote:
Originally Posted by DoubleF
I had to research this a little while back when I was working with a charity board. My understanding is that...
- It's not tax deductible personally if you don't have a donation receipt.
- It's possibly tax deductible if it's through a company, but you might have a hell of a time explaining a poker tourney if audited. Banquets/food are generally easier to explain.
Off topic (split receipting):
- The charity itself cannot offer a donation receipt in excess of the benefit received by the recipient. For instance, if an entry fee is $200 for a charity tournament and normal poker tournaments of a certain size are $150 FMV, then a person cannot receive more than $50 charity receipt. (Well, it can, but it risks losing it's charity status by doing that.) CRA also notes that if the FMV received is over 80% of the amount gifted, then CRA determines that there really isn't much intention to gift, and thus the charity shouldn't issue a receipt. Some charities give a donation receipt for the entire fee received. That's in excess of the FMV received.
http://www.cra-arc.gc.ca/chrts-gvng/.../splt-eng.html
This latter one I remember having to really push to get rid of donation receipts at the organization for certain events as they were concerned that bumping up the entrance fee cause people to balk. It just wasn't worth the risk for them to lose the charity number. The compromise was to issue invoices instead of charity receipt.
Some people will get upset and you'll lose their support because they don't get the donation slip, but if you're involved with a charity board, do you really want to be part of the board that ended up losing a charity number for the charity? |
A *lot* of charities will issue receipts for entry fees to tournaments. In general, when they get caught (eventually, they will) most will get spanked by CRA and told not to do it any more. The problem is that there is no determinable Fair Market Value (FMV) for the alleged "gift" provided. CRA is generally "nice" the first time; after that they are permitted to apply sanctions up to and including revocation.
When you provide (say) a new bike for auction, there is an absolute FMV for it, and that is determinable through a third party. Entry fees for tournaments are at the behest of the organizer. Potentially, if the entry fee were very large (say $1,000) and the biggest prize was of nominal value (say $50) an argument could be made that most of the entry fee was a gift. That would be a very rare circumstance in my experience.
Just because a charity issues a receipt doesn't make it "correct".....
It's one of the same reasons one can't donate "services"...no third-party FMV. So, when one wants to do that, charge for the services and donate the money back.