Effective: January 29, 2018
Applicable FAM Policies: 645 – Receipt of Donations
Applicability: GNWT Departments and Public Agencies

INTERPRETATION

The majority of donations result in the donor being issued a receipt that can be used for income tax purposes when the value of the donation is measurable.

Before accepting a donation, the responsible Minister must approve the appropriateness of the donation.

If a tax receipt is requested for a non-monetary donation, the donor is responsible for obtaining an independent expert valuation on the value of the donation.   

Donations to the government or public agency must be free of any conditions imposed by the donor. Donors may express a wish as to the preferred program use of the donation, however they are assets that will be utilized as the government/public agency as they see fit. No conditions that restrict use beyond a program level should be accepted.

Any donation of a non-monetary asset that promotes the donor must be assessed for any benefit that may reasonably accrue to the donor as a result.

A non-monetary asset should not be accepted if the public could perceive that the donation is contrary to the Department’s mission, mandate and/or long-term strategy.

Monetary donations to the government or public agency must be deposited as revenue.

Canada Revenue Agency (CRA) prohibits the issuance of a tax receipt when conditions made by the donor extend a benefit on the donor.  CRA's Income Tax Interpretation Bulletin IT-110R3 states the following, which applies to the government or public agency: 

“... donations subject to general direction from the donor that the gift be used in a particular program operated by the charity are acceptable, provided that no benefit accrues to the donor, the directed gift does not benefit any person not dealing at arm's length with the donor, and decisions regarding utilization of the donation within a program rest with a charity."