Charities and Not-for-Profit Newsletter | September 2012 | Receipting for Services

Receipting for Services

Charities are reminded that it is not permissible to issue receipts for donated services. This is based on the common law definition of gift. Charities can only receipt for donations that legally qualify as gifts. A gift is defined as a voluntary transfer of property without consideration. Because services (for example, time, skills, or effort) do not qualify as property, a donation of services does not qualify as a gift and is thus not eligible for a receipt. This is confirmed by CRA Summary Policy CSP-S03 and CRA Policy Commentary CPC-017.

According to CRA policy, where a charity is faced with a donor who wishes to donate his or her services to the charity, it may be possible to issue a receipt under certain circumstances. For instance, where a charity pays a service provider for services rendered, the service provider may choose to donate the payment back to the charity. In such a case, the charity can receipt for the cash gift to the charity. It is essential that the charity actually pays the service provider for the service and that the same service provider makes a voluntary gift back to the charity. The charity should keep a copy of the invoice, the payment to the service provider, and the gift back from the service provider for its records. We recommend that payments in both cases be made by cheque.

The CRA cautions that a charity should not issue a donation receipt to a service provider in exchange for an invoice marked “paid”. The CRA states that this procedure raises questions as to whether any payment has been made from the charity to the service provider and whether any payment has been made back to the charity.

Charities wishing to structure a gift of services in this manner are encouraged to contact us if they have any questions about this policy.

Back to issue

© Miller Thomson LLP, 2013. All Rights Reserved. All Intellectual Property Rights including copyright in this publication are owned by Miller Thomson LLP. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. Any other form of reproduction or distribution requires the prior written consent of Miller Thomson LLP which may be requested from the Editor(s).

This publication is provided as an information service and is a summary of current legal issues. This information is not meant as legal opinion and readers are cautioned not to act on information provided in this publication without seeking specific legal advice with respect to their unique circumstances.

Miller Thomson LLP uses your contact information to send you information on legal topics and firm events that may be of interest to you. It does not share your personal information outside the firm, except with subcontractors who have agreed to abide by its privacy policy and other rules. If you do not wish Miller Thomson to use your contact information in this manner, please notify us at newsletters@millerthomson.com and include "Privacy Request" in the subject line.

Message from the Editor

This is a publication of Miller Thomson's Charities and Not-for-Profit group. We encourage you to forward this email to anyone who might be interested. Complimentary subscriptions to this and other Miller Thomson publications are available by clicking here. Your comments and suggestions are most welcome and should be directed to charitieseditor@millerthomson.com.

Contact Information: www.millerthomson.com 1.888.762.5559

Services

Charities and Not-for-Profit

Subscribe to Our Publications