Group Charitable Donation receipt assigned to a single person - Calgarypuck Forums - The Unofficial Calgary Flames Fan Community

Raekwon · 02-24-2012, 08:27 AM

Good Morning,

I'm sure I know the answer to thsi i'm just looking for links to the answer and why.

Our office social comittee collects money through the year for wearing jeans, at the end of the year they donate the money to a charity. This year they are offering to people who pay for the year upfront a chance to win the tax receipt at the end of the year when they donate.

I need to explain to them exactly why this is wrong.

Yeah_Baby · 02-24-2012, 08:29 AM

I assume you believe that charitable donations should have intrinsic value? Or simply someone shouldn't get a tax receipt for what you've donated.

Hockeyguy15 · 02-24-2012, 08:31 AM

So my question would be why do you care?

MarchHare · 02-24-2012, 08:32 AM

IANAL, but wouldn't this be tax fraud? That is, the "winner" would be claiming that he or she donated $X to charity when only a small fraction of X was donated personally.

Raekwon · 02-24-2012, 08:33 AM

Quote:

Originally Posted by Yeah_Baby

I assume you believe that charitable donations should have intrinsic value? Or simply someone shouldn't get a tax receipt for what you've donated.

Nothing like that, If its all on the up and up then great. I'm actually concerned this will come back and bite them or the winner as I remember trying something like this about 5 years ago when I was running it but can't remember why we got shut down.

Raekwon · 02-24-2012, 08:36 AM

Quote:

Originally Posted by Hockeyguy15

So my question would be why do you care?

So my question would be why do you care why I care? But if you do care why I care please see above answer.

Locke · 02-24-2012, 08:36 AM

You cannot do this. A person cannot 'win' someone else's charitable donations, if it was ever questioned by CRA, which if its big it will be, it would be disallowed so fast it'd make their head spin.

Everyone should get an individual receipt for their own contributions.

Spouses can pool their charitable donations, but this wont fly.

Raekwon · 02-24-2012, 08:41 AM

I'm guessing it would be about $1000 - $2000 and they would have to pay the donation in cash.

Locke · 02-24-2012, 08:46 AM

Quote:

Originally Posted by Raekwon

I'm guessing it would be about $1000 - $2000 and they would have to pay the donation in cash.

The only way I could see this working is if everyone just pooled the cash and one person took it to donate the entire sum in their own name.

jtfrogger · 02-24-2012, 09:06 AM

Quote:

Originally Posted by Locke

The only way I could see this working is if everyone just pooled the cash and one person took it to donate the entire sum in their own name.

If they do the draw before they give the money, that is effectively what they are doing. Then when they give the money to the charity, you tell them the name of the receipt.

I don't see the issue in doing this. The amount of the donation is accurate. Think of it as a quick little gambling event where everyone tossing in a small amount of money and the winner donates the prize to charity. That is basically what it is.

Raekwon · 02-24-2012, 09:12 AM

The reasoning behind it is that The committee sees no benefit from this receipt so someone should. Its a nice thing to do but I could see this backfiring. Imagine jo winner gets the 2k tax receipt and uses it on his taxes, this is his first ever tax receipt and seems to draw red flags at that amount by revenue canada. He goes through a nice audit for his troubles and decides to sue the committee because he wasn't aware that it was not legal. something like that.

Regular_John · 02-24-2012, 09:15 AM

Ahh yeah, that's not gonna fly. In the eyes of the CRA the "winner" would be committing tax fraud for claiming money they didn't donate.

I'm sure the social committee meant well, the charity probably asked "ok who should we issue the tax receipt to?" and the person handing over the donations didn't know the correct answer so they tried to come up with a "fair" way of doing it rather than leaving it up in the air.

But this could still end very badly if some one uses the slip & claims that amount.

Cowperson · 02-24-2012, 09:24 AM

You definitely cannot offer the promise of a tax receipt as a prize in a raffle.

As a second thing, the charity will definitely not want their name associated with an unlicenced raffle.

If you were being entirely legal . . . . you'd apply for an under $10,000 raffle licence from Alberta Liquour & Gaming and award the $1000 to $2,000, winner take all prize.
The winner would get the money and then you would have to trust that they would give it to the charity.

You might get around the "trust" issue of giving the winner the money straight-up by instead having your company do up a third party cheque in the name of the winner AND the charity, thereby requiring the winner to freely gift the money to the charity and the charity to freely accept. Both have to counter-sign the cheque.

I ran into something like this last year.

The other option is just to keep your mouths mostly shut, yank a ticket from a bucket, give some cash to the charity and ask them to make it out to a single person.

Just don't let Alberta Liquour and Gaming find out about it. Or the charity.

If you have to report this in some way to some regulatory authority related to the company, you might have to go through the proper hoops.

Cowperson

Chingas · 02-24-2012, 09:25 AM

Technically I don't see any issue with this as money earned gambling is tax free, and therefore up to the winner to do with as they see fit. However if the winner was worried about it they could file it as odd job earnings, then donate it and likely reap the reward of a deduction to the amount of the difference of tax owed on the money and the donation amount.

albertGQ · 02-24-2012, 10:04 AM

I've been to a Telus Xmas party in the past where they raffled off a bunch of large ($500) tax receipts as prizes

fredr123 · 02-24-2012, 10:15 AM

Sort of on point: http://www.cra-arc.gc.ca/chrts-gvng/dnrs/fq-eng.html#q6

To whom must an official donation receipt be addressed?
Generally, the official donation receipt can only be issued to the true donor of the gift to a charity. If a donation is made by a cheque in both spousal names, an official donation receipt can be issued in either name. If a corporation sends a donation to a charity, the official donation receipt can be made to the corporation owner only if he has sent a personal cheque. If the corporation is donating money that has been collected from its employees, and there is a written declaration to prove this, the charity can issue the official donation receipt in each donor's name.

MoneyGuy · 02-25-2012, 08:14 AM

Quote:

Originally Posted by Raekwon

I need to explain to them exactly why this is wrong.

Email the organizer a link to this thread.

FlamesAddiction · 02-25-2012, 08:23 AM

I don't see a problem with it really, even if you technically shouldn't do it.

You weren't really giving money to charity at the time as much as you pooling money into an office fund. A company giving company money to charity in someone else's name isn't that uncommon. It's often part of a prize or reward in competitions.

para transit fellow · 02-25-2012, 09:13 AM

There is a certain similarity to when you make a donation on someone else's behalf ( often done at xmas). In this case the group involved makes a decision that one name will be considered the donor. The raffle part could be a problem if the proceeds of the raffle don't go with the rest of the donation. Then again office raffles are often a problem as the frequently don't have aglc permits.

Harju · 02-25-2012, 09:45 AM

This would have to be structured properly. It must be a donation of winnings. The person who won would have to win the cash pool, then voluntarily donate the cash to the charity. (I am stealing this from the United Way which has guidelines on when they will issue donation receipts. They will not issue a receipt where a tax receipt is won and cash is donated in the name of the winner)