Donation of Gift Certificates

Reviewed January 2017

Relevant Legislation

Reviewed Feb 1, 2018

Canada Revenue Agency (CRA) guidelines at:

www.cra-arc.gc.ca/tx/chrts/menu-eng.html.

 Intent

LOFT accepts gift certificates for use in acquiring goods or services to be used in its charitable activities, or to be provided to its clients for their personal use. LOFT can also accept gift certificates to be used in fundraising events such as auctions or raffles when such events are official sanctioned by LOFT.

As a Canadian registered charity, LOFT Community Services is authorized to issue official receipts for income tax purposes for the eligible amount of donated gift certificates under specific circumstances.

Please note that, if the donor identifies a specific individual client who is to receive the gift certificate, this is not considered a charitable donation and no tax receipt will be issued.

This policy is intended to cover the issuing of tax receipts only. The use and monitoring of gift certificates is covered under the LOFT Expenses Policy.

Definitions

Gift Certificate: a certificate with a clearly stated monetary value that entitles the recipient to purchase goods and/or services in the issuer’s establishment.

Gift Card: a card that has a clearly ascertainable monetary value that entitles the recipient to purchase goods and/or services in the issuer’s establishment.

Holder: the person who has acquired the gift certificate. The holder cannot be the issuer.

Issuer: the person (individual, retailer, business) that creates a gift certificate or a gift card redeemable for goods and/or services from that person. An issuer cannot be a holder.

For purposes of this policy, “gift certificate” and “gift card” will be referred to collectively as “gift certificate”.

  Policy

LOFT   issues donation receipts in compliance with CRA rules and guidances. In order   to issue an official donation receipt for a gift certificate, Development   must be in possession of proof of value of the certificate. When the gift   certificate is donated by the issuer, Development must also be in possession   of proof of its use. LOFT will issue an official donation receipt for a donated   gift certificate in the following situations:

A Cash Donation for the Purchase of Gift Certificates

When a donor makes a cash donation and indicates that it is to be used for the purchase of gift certificates, the tax receipt is issued in response to the cash donation.

A Gift Certificate is Donated by the Holder

When a donor has purchased a gift certificate (s), the donor then being the holder, and donates the gift certificates to LOFT, the following procedures must be followed in order to issue a tax receipt.

Proof of Value:

When the cash value of the gift certificate is printed on the certificate, Development must receive a photocopy of the front and back of the gift certificate that clearly showing the cash value and the gift certificate registration number.

If the cash value is not printed on the certificate, Development must be provided with a store receipt that clearly shows the certificate registration number and the cash value, as well as a photocopy of the front and back of the gift certificate showing the certificate registration number.

When the holder does not have proof of the value of the gift certificate, this proof must be obtained from the issuer by taking the certificate to the issuing store and obtaining a store receipt showing the certificate registration number and value. This is to be done either by the donor themselves or by the staff member who has received the certificate. This store receipt must be provided to Development along with the photocopy of the front and back of the certificate clearly showing its registration number.

When the donor has indicated that a gift certificate is intended for the personal use of clients, the program must provide Development with a copy of the Gift Certificate Acceptance Sheet signed by the client(s) in accordance with LOFT Expenses Policy.

A Gift Certificate is Donated by the Issuer

LOFT does not provide tax receipts to the issuer of a gift certificate.

Procedures

See Development Manual