Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues: Whether a charity established to provide clinical counselling services can issue official tax receipts to individuals who donate food hampers to clients of the charity.
Position: Factual determination.
Reasons: Where a donor makes a voluntary transfer of property to a charity without consideration and is then directed by the charity to deliver the property to a specific recipient on the charity's behalf, there may be a gift for which an official tax receipt may be issued. However, if the donor chooses to make a donation to a client of the charity without being directed to do so by the charity, the donation is not a gift to the charity and the charity cannot issue an official tax receipt in respect of the donation.
XXXXXXXXXX 2001-006542
April 12, 2001
Dear XXXXXXXXXX:
Re: Donation of Food Hampers
This is in reply to your facsimile letter dated January 15, 2001 wherein you asked for our views on whether your organization is required to issue official tax receipts to individuals who donate food hampers to your clients. You advise that your organization is a non-profit social service agency funded by the provincial government to provide clinical counselling services to children and their families.
A registered charity can only issue official tax receipts in respect of gifts made to it. As stated in paragraph 3 of Interpretation Bulletin IT-110R3, a gift, for the purposes of sections 110.1 and 118.1 of the Income Tax Act, is a voluntary transfer of property without valuable consideration. Generally, a gift is made if all three of the following conditions are met:
1. some property - usually cash - is transferred by the donor to a registered charity;
2. the transfer is voluntary; and
3. the transfer is made without expectation of return. No benefit of any kind may be provided to the donor or to anyone designated by the donor, except where the benefit is of nominal value.
It is a question of fact whether a gift has been made to a charity in a particular situation. Where a donor chooses to deliver a food hamper to a client of the charity without being directed to do so by the charity, the donation of the food hamper is, in our view, a gift to the charity's client and not a gift to the charity itself. Accordingly, an official tax receipt cannot be issued by the charity in such circumstances. However, where a donor makes a donation of a food hamper to the charity and the charity then directs the donor to deliver the food hamper to a specified recipient on its behalf, there may be a gift for which an official tax receipt may be issued.
We note that a registered charity should issue official tax receipts for gifts made to it to support its purposes and programs. In the situation described, the delivery of food hampers would appear to be outside the scope of your organization's objects. Accordingly, if your organization intends to undertake programs and activities that are different from those previously described to the Agency, we recommend that your organization notify our Charities Directorate before proceeding to ensure that its registered status would not be jeopardized.
While we hope that our comments will be of assistance to your, they are given in accordance with the practice referred to in paragraph 22 of IC 70-6R4 and are not binding on the Agency in respect of any particular situation.
Yours truly,
Manager
Financial Institutions Team
Financial Industries Division
Income Tax Rulings Directorate
Policy and Legislation Branch
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