Donation Receipt Compliance: What Charities Can (and Can’t) Receipt in Canada

Synopsis

Donation receipt compliance is a legal requirement that every Canadian charity must prioritize, it's more than a thank-you—they’re legal documents regulated by the Canada Revenue Agency (CRA). Missteps in what’s receipted or how it’s receipted can lead to audits, penalties, or even the loss of charitable status.

This article outlines the most misunderstood rules around issuing receipts, clarifies common misconceptions, and provides practical tips for compliant receipting.

What Can Be Receipted (and What Can’t)

Canadian charities can only issue official donation receipts for eligible gifts—voluntary transfers of property for which the donor receives no more than a nominal benefit. This includes:

• Cash donations

• Publicly traded securities

• Certain gifts-in-kind, if their fair market value can be reasonably determined

Charities cannot issue a receipt for:

• Services rendered (time or labor)—even if donated

• Gifts with conditional or contingent value

• Gifts from related businesses without clear separation

• Donations where the donor receives a significant benefit in return (such as event tickets or merchandise, unless properly split receipting is used)

The CRA defines strict eligibility rules, and failing to follow them puts the charity—and its donors—at risk.

How to Receipt Properly: Key Requirements

Even when a donation is eligible, how it’s receipted matters. An official receipt must include:

• The charity’s legal name and registration number

• A unique serial number

• The date of the donation

• The date of the receipt

• The donor’s full name and address

• The eligible amount of the gift (minus any advantage)

• A description of the gift (for non-cash)

• A signed declaration or electronic signature

• The website address of CRA (canada.ca/charities-giving)

For non-cash gifts, charities must determine and document the fair market value (FMV) at the time of donation, using a reasonable valuation method. If the FMV can’t be determined, a receipt should not be issued.

Common Compliance Pitfalls

Most issues arise not from bad intent, but from confusion about:

• Split receipting: When a donor receives something in return (e.g. gala ticket), the amount must be adjusted, and both the donation and the benefit clearly stated.

• Incorrect valuation of gifts-in-kind: Failing to determine FMV through reliable sources (e.g. appraisers, marketplace data) is a common trigger for audits.

• Receipting services: Time, skills, or labor—even if provided for free—are never eligible for receipting. The CRA views them as non-transferrable property.

If in doubt, do not issue a receipt—or consult legal or accounting support familiar with CRA charity rules.

Best Practices for Donation Receipt Compliance

To stay compliant:

• Use standardized templates approved by your board or legal advisor

• Train staff and board members annually on receipting rules

• Conduct internal reviews of all receipts issued (spot checks are better than none)

• Document your valuation sources for all non-cash gifts

• Maintain a receipting policy and make sure it’s understood across the organization

A single inaccurate receipt can lead to significant consequences. Building strong internal habits is your best defense.

FAQs

Can we receipt donated services or volunteer time?

No. Services, labor, or time do not count as eligible gifts under CRA rules—even if they have clear value.

What if we give donors a thank-you gift?

If the value of the gift is more than nominal (usually above 10% of the donation), it must be deducted from the receipt amount using the split receipting method.

Do we need to receipt every donation?

No. Receipts are not mandatory for every donation. However, if you do issue them, they must meet all CRA standards.