My charity has received a gift of professional services. Can I issue a charitable donation receipt?


Those services might be valuable. Charities benefit from many types of “pro bono” assistance – accounting, legal, grant writing, performing, design… But the Canada Revenue Agency’s rules are clear: charitable donation receipts can be issued only for gifts of property, not for gifts of services.

The fact that there might be a clearly understood and publicized fee (i.e. the fair market value is unambiguous) does not change this ruling.

There is something you can do, though: you can pay your supporter for their services, and they can donate the money back to you. These transactions create a gift of property, which is eligible for a charitable donation receipt.

It’s not good enough to exchange an invoice marked “paid.” Your supporter must invoice you for the services (and you must retain this invoice as part of your accounting records). You must actually pay the service provider, and they must give you the donation of money (and your banking records must show these transactions).

This process requires the donor to receive payment, which must be declared by them as taxable income. The charitable donation receipt confers a tax credit against this income.

The whole process is often referred to as a “cheque exchange.”

Here are a couple of citations from the CRA website: