TAX RECEIPTING AND CHARITIES
- kconsultkimthronds
- Sep 7
- 2 min read
by: Kim Throndson
Sept 7, 2025
One of the benefits of being a charity (see my blog post – Benefits of being a charity) is the ability to issue donors tax receipts. Tax receipting is governed by CRA, and there are very specific regulations for tax receipting. If a Charity breaches the regulations, it could affect their charitable status.
Here are some guidelines for cash donations:
1. Cash Gifts Definition
CRA defines a cash gift as a voluntary giving of the cash to the charity. In other words, the money is not given to purchase anything from the charity or for the charity providing a service to the donor.
2. Tax Receipts are not a requirement
Charities are not required to provide a tax receipt, but they can choose to provide tax receipt. There is a financial and administrative cost to the organization. So why do it?
Benefits of providing tax receipts are:
- Donor stewardship – giving donor a tax break may incentivize them to give or give more
- Donor tracking and data base information – certain information is required on a tax receipt that leads to having a great database the charity can use for future fundraising or membership
3. Do it right
If a charity chooses to tax receipt, CRA requires the receipts to be in a very specific format, and have specific information. See below in references and refer to CRA for sample receipts. As long as your tax receipt template has all the required information, you can use word doc, pdf, or a tax receipting program to create tax receipts.
A tax receipting/donor database program can be useful if the charity receives a large number of donations, and has a dedicated resource to administer and use the software.
4. Reconcile, reconcile, reconcile
As donations are money into the charity, at some point in the year the charity should reconcile the tax receipts and donations with the accounting system. CRA will require reporting on the donations. Reconciling the donations and accounting throughout the year will make the reporting easier.
Summary:
Donation Voluntary |
Tax Receipt pros and cons |
Follow format guidelines |
Reconcile |
Reference:
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