Donations received as a result of an obligation or inducement

Charities cannot issue tax receipts for donations when:

  • the donor was required to make the donation (for example, as the result of a court order) or
  • the donor was induced in any way to make a donation that he or she otherwise would not have made.

In these cases, the donation is not considered voluntary, and therefore is not a gift.

Example 1: As part of a settlement in a court case, the loser in the case is required to make a donation to charity. Because the donation did not meet the definition of a gift (it was not voluntary), no tax receipt can be issued.

Example 2: A charity contacts a potential donor and proposes the following: Consistent with its charitable objects, the charity is able to provide relief to farmers, although it has no program set up to do so. The charity knows that the potential donor is interested in helping a specific farming family, so it offers to provide a program for which only this family would qualify if the donor donates to the charity. Although the donor does not receive any personal advantage for his donation, he has been induced to make his gift. Therefore no tax receipt can be issued.


Charity Tax Tools



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