McMASTER UNIVERSITY
University Advancement
Advancement Services
DTC-125, ext. 24576
TO:
FROM:
DATE:
RE:
McMaster Personnel Involved with Fundraising Events
Advancement Services - Donations ext. 24576
February 17, 2016
Information on Events
_______________________________________________________
The attached information provides guidance to McMaster employees running McMaster initiated
fundraising events, when the event admission price includes a charitable donation portion. The Canada
Revenue Agency (CRA) restricts McMaster from issuing tax receipts for events controlled and operated by
external persons or organizations. Blank forms are included to enable event organizers to obtain the
required approvals for Prospect Clearance and the issuance of charitable tax receipts. Also, a sample log
and a blank Donation Log are provided to users to simplify the cheque recording process.
Please review this package as CRA demands a stricter adherence to existing regulations than in the past.
Also, the University has formalized some of its procedures for granting approval of fundraising events.
The electronic Donations Log is an EXCEL spreadsheet, obtainable as an e-mail attachment from
hochrei@mcmaster.ca. When holding an approved event with a donation component, or whenever
submitting several donations at one time, please complete the spreadsheet instead of creating any type of
memo. Please don’t modify the log in any way, as it is part of an electronic data source that enables
Advancement Services to automate the tax receipting process. All field columns must be filled in if
applicable. All instructions in this packet comply with PCI standards for credit card handling, Internal
Audit’s rule that cheques once opened, may not be re-routed through internal mail and McMaster’s UTS
rule that it is best not to send critical personal data via email.
Tickets paid by credit card require that you hand-write their name, address, credit card number, expiry date,
total ticket amount and ticket portion on a pledge card. (Not entered on a computer or on the cheque log).
Cash should not be transported downtown. Therefore, all cash for both event and donation portion of tickets
should be recorded on the log and deposited at the cashier’s office into account 0-71011-2130. When all
data has been entered, total the 3 ticket/donation columns. Print and balance the log using the cheques and
cashier receipts for cash. Save the file using the department’s name, event name and date (i.e. Athletics
Football gala Dec. 30 2012). Copy the file to a flash drive, labelled with the dept name and address, so it
can be returned when processed and wiped clean. In an envelope labelled “Advancement Services
Donations – DTC 125” submit the printed log, flash drive, any credit card pledge cards, all cheques and
cashier receipts. The envelope must be hand delivered to Gilmour Hall Cashier’s office with instructions to
put it in the secure locked bag for delivery to the Downtown Centre – DTC-125. Avoid stockpiling
payments, as the University’s Cash Control Policy requires frequent deposits to ensure the secure handling
of university funds.
Concerns? A list of contacts is provided. If helpful, we can offer training sessions. Contact Carol
Hochreiter at hochrei@mcmaster.ca
For University Advancement staff, the logs can be found on the UA intranet as well as the I: drive at:
Donations Log Sample and Donations Log Blank template on legal paper
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Things to Know When Holding a Fund-raising Event if
Charitable Donation Receipts are Anticipated.
When holding an event, consider whether or not to offer participants or sponsors charitable tax receipts.
Many corporations prefer a business receipt instead of a charitable receipt, as the former can have
greater tax advantages. Business Receipts simply confirm that a university department has received
either cash or a gift in kind from the corporation. Business receipts are generated by the department
hosting the event on Departmental Letterhead and signed by the Chair or Director. The cash for the
transaction is deposited into the department’s university FAS account that is to be the beneficiary of the
fundraising efforts. Advancement Services does not have to become involved in this type of fundraising
revenue.
Type of Qualifying Events
Fundraising dinners and/or dinners with auction, concerts, shows, sporting events and golf tournaments
can sell tickets that offer “split receipting”. In this case, the ticket value has been set at a price that
covers the costs of the event and adds a donation portion. For split receipting to be permitted several
conditions must be met.
As of 2002 CRA changed its view on what types of activities qualify for split receipting. CRA calls this
new approach, the interpretative approach. This approach considers that a gift has been made when
there is “an outright transfer of property for no consideration” and that there is a “clear donative intent to
make a gift.” (Technical news #26) To determine whether or not an outright transfer of property has
been made with a clear donative intent to make that gift, the transaction must meet four key criteria.
1. The transfer must be voluntary, and the property must have a clearly ascertainable value.
Cash has a clear value. However gifts in kind may have an intangible value. Meaning the price is
undeterminable. Event tickets may have a very clear value as the event is offered to the public
regularly at a standard price separate from any fundraising effort. But some events offer an
advantage or benefit to the participant that cannot be valued. Such an example is a day of golf with a
renowned professional golfer. When the value is not determinable, an appropriate deduction from
the ticket price cannot be calculated; hence CRA interprets the value to the participant to be the
entire ticket price, no matter how much the ticket costs.
2. Any advantage received by the donor or a person not dealing with the donor at arm’s length
with respect of the transfer must be clearly identifiable. That advantage must be identified on the
charitable tax receipt and the charity must maintain satisfactory evidence of the value of the
advantage. An independent valuation should be considered.
3. There must be a clear donative intent to enrich the donee. CRA realizes proving that a donative
intent exists is subjective, and difficult to establish in some cases, but it must be accomplished. A
rule of thumb is that the donative portion must be no less that 20% of the total ticket price. Only
some rare cases will meet the donative intent criteria when the donation portion is less than 20%.
4. Charities sometimes provide donors with a token of appreciation. So as not to be construed as
an advantage, with the resulting reduced tax receipt amount, the token must be insignificant.
Administratively, CRA is prepared to provide a de minimis threshold for tokens of insignificant
value. To determine the de minimis threshold, the advantage received by the donor may not exceed
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10% of the property transferred to a maximum of $75. If the token’s value is greater than the
threshold, then an advantage has been received, so the tax receipt amount must be reduced.
Examples:
Event participants go to a football game using game tickets that cost the public $150 for two. The
fundraising organizers sell event tickets for $300. Along with the $150 for two tickets, the
participants receive a party atmosphere at the end zone tent where they are given tokens of the day.
In scenario 1, the participants receive a hotdog, drink and team hat, valued at $15. In scenario 2 the
participants receive the hotdog, drink, team hat and parking, valued at $25.
Scenario 1 – hotdog, drink, team hat
Event Ticket price
Football game ticket
Property Transferred to donee
$300
($150)
$150
de minimis threshold 10% of property transferred
The tokens are classified as insignificant so tax receipt =
$15.
$150
Scenario 2 – hotdog, drink, team hat and parking
The tokens exceed the de minimis threshold so donors are deemed to have received an advantage,
thus:
Event Ticket price
Football game ticket
Event tokens, exceed threshold
Property Transferred to donee and tax receipt =
$300
($150)
($ 25)
$125
Scenario 3 – event ticket price is $200 instead of $300, hotdog, drink, team hat and parking included:
Event Ticket price
Football game ticket
Event tokens, exceed threshold
Property Transferred to donee no tax receipt permitted
$200
($150)
($ 25)
$ 25
Criteria #3 requires a donative intent of at least 20% of the ticket price. 20% of $200 = $40.
Scenario 3 with property transferred to donee at $25 would not reflect a donative intent. Thus no tax
receipt could be issued for any portion of scenario 3.
Type of Non-Qualifying Activities
The purchase of a lottery or raffle ticket cannot have a donation portion. CRA views the price of the
lottery or raffle ticket to be the full price a participant is willing to pay to win the big prize. Thus if
event organizers want to incorporate a raffle into the event, tickets, separate from the event ticket. should
be sold during the event, so as not to jeopardize the event’s split-receipting status.
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Criteria to Evaluate Participants’ Advantage
An event with a standard public ticket cost enables a quick calculation of the three possible scenarios
above. However, events with multiple costs and activities all rolled into one event become more
difficult to value. CRA requires that the charity calculate the event cost based on the concept of fair
market value (FMV). In the case of an up-scale dinner and performance, what would be the FMV of
any other such evening? The charity can base the advantage on the price local restaurants charge to hold
similar events. But for more multi-faceted events, it is wise to cross check your FMV estimate with a
breakdown of each cost incurred when hosting such an event.
For a golf day of breakfast, golf, golf cart rental, cocktails, or wine costs, dinner plate charge, discjockey fee, advertising expenses, and depending on if the prize table is available to all participants, or
requires a separate ticket, and if the total value of all the door prizes and golf prizes meets the de
minimis threshold or not, it becomes more difficult to ascertain the FMV of the day. By adding up all of
the expenses and comparing the total to the FMV method, organizers have a sound basis for the
advantage calculation. Having this documentation offers organizers more assurance that CRA will not
subsequently dispute the valuation of the participants’ advantage. This is important because CRA has
the authority to disqualify the participants from using any portion of a tax receipt if its value is
questionable.
CRA has changed its view on the advantage of a “hole-in-one” prize being offered at a golf day. CRA
concluded that many tournaments do not have a winner of the prize. The chances of making the hole in
one are remote enough that for most golfers the possibility does not exist. So no longer does the
inclusion of a hole-in-one prize disqualify a tournament ticket from split-receipting.
If an event’s cost structure is such that it does not qualify for split-receipting, a way of receiving
donations at the event is to ask for separate donation cheques. As long as the donation is voluntary and
participation at the event is not restricted or limited by the lack of a donation, then the event can have all
the enticements that disqualify it from tax receipting. The organizers’ sense of whether participants
would contribute an additional, separate gift would be of prime consideration if this option is used.
Often event organizers seek corporate sponsorship to offset event costs. Sponsorships come in many
forms. If a person or company offers such things as wine, food, decorations, door prizes or golf prizes
for an event, this should be considered a business expense. The event coordinator should offer the
company a business receipt for the merchandise, thus avoiding the limitations of tax receipting.
Some corporations purchase a complete table of tickets as a form of corporate sponsorship of the event.
If the corporation is given the tickets or can direct their use, then the donation receipt must be the value
of the donation portion excluding the value of the event. Frequently, corporations donate an amount
equivalent to the price of a table and authorize the event-holders to offer the tickets to non-paying
recipients, (individuals who may otherwise be financially unable to attend such an event). In this case,
the corporation’s tax receipt still must equal the value of the donation portion excluding the event
portion of the ticket price. (IT-110R3, Part I, sect. 15(a)) If corporations want tax receipts for the full
value of the price of the table, then tickets may not be distributed to them or distributed in their name.
Another form of sponsorship is a golf-hole sponsor. If the advertising banners and publicity are more
than nominal value, or undeterminable value, then the sponsorship does not qualify for a charitable
receipt. CRA associates the use of corporate logos on the hole sponsor signs to be deemed advertising.
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As no clear valuation can be set for the intangible nature of the power of advertising, no tax receipt can
be issued for logo bearing advertising.
Services-rendered are not tax-receiptable. As an example, if a graphic artist designs an event
promotional piece, the value of those services cannot be donated and tax receipted. However, the artist
can be paid and then the artist may subsequently donate an equivalent amount by cheque to the same
purpose for which the event was raising funds.(IT-110R3, Part I, sect.15(d))
Similarly, “gift certificates” are often given to McMaster to be used as a door prize or an auction item. If
the donor of the certificate purchased the certificate, then gives it to McMaster, that donor can be tax
receipted for the value paid noted on the purchase receipt. If however, a business offers a gift certificate
to perform the services of the business, then no tax receipt is possible. In that case, no property has been
transferred, only a future service is offered. But as in the previous example, the event organizers could
purchase the gift certificate from the business, then the business could donate to the fund-raising cause to
qualify for a tax receipt. (CRA Registered Charities Newsletter No. 10)
Confirmation that Tax Receipts will be issued by Advancement Services
If a campus group wants to fund-raise for a University supported project through an event, then support
for the venture must first be obtained from the appropriate Dean or Vice-President. The event organizer
should consult the relevant De-centralized Advancement Officer or the Associate Director of Annual
Giving. The Prospect Clearance and Fund-Raising Approval form is to be completed including the
signature of the Dean or Vice-President then sent to clear@mcmaster.ca. Staff will circulate copies of
the completed form to the Associate Director of Annual Giving and the Donations staff for their review.
Their approval or concerns are forwarded to the Clearance Committee. The Clearance Committee will
contact the event organizer whether the request for approval is granted or denied.
To enable Donations staff to determine if the fee structure and activities of the event qualify the event as
a split- receipting scenario, the event checklist form must be completed. The signed form will attest that
the organizers have identified all possible benefits to be received by participants. If any benefits are
revealed, Donations staff may be able to suggest a revised event format that would satisfy CRA’s
requirements. Otherwise, event participants will not be eligible to receive tax receipts.
Organizers must obtain Prospect Clearance approval prior to the printing, publishing or distributing any
event literature. Income tax receipts cannot be issued for an event that has not been approved. Failure
to disclose activities may invalidate a previously obtained approval, requiring the offer of tax receipts to
be revoked. CRA insists that the validity of all deductions taken to reduce taxes payable is the
responsibility of the taxpayer. Charitable tax receipts obtained or used inappropriately may result in
penalties and interest to the taxpayer. Our diligence in regards to these matters stems from our aim to
protect donors from the possibility of such financial aggravation.
Sometimes, an organization or group of individuals external to McMaster want to hold a fundraising
event to provide revenues for McMaster. These efforts are welcomed and appreciated; nevertheless we
must ensure that the events are conducted in accordance with all requirements previously mentioned.
Registered Charities Newsletter No.10 states that in such a case, McMaster “should have a written
agreement with the organization....[it] should spell out how any money earned by the event is to be
handled and the procedures for issuing tax receipts.” The Fundraising Approval Form and the Event
Checklist is our attempt to understand how each event is being operated. A university department must
agree to manage such events, as Advancement Services limits its communication regarding donation
processing of events to university personnel, usually a signing authority of the FAS account receiving
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the funds. Therefore, it is the department receiving the donations that needs to ensure that all
information is available to Advancement Services.
Handling of Fund-raising Proceeds
Cheques or credit card payments with a donation component are sent to Advancement Services for
processing. In any particular case in which the event price is significantly larger than the donation
portion and where the tax receipt will be relatively small, Advancement Services may require
compensation for processing such payments. This is due to the fact that credit card companies charge a
percentage service charge on the total transaction amount. Hence, credit card processing and tax
receipting expenses may eliminate or severely reduce the donation value to the university. To ensure
that a processing charge is not necessary, event organizers should ensure that individual receipt values
support the processing efforts required to produce and mail tax receipts. As noted above, there must be
at minimum a 20% donative intent.
Advancement Services accepts Visa, MasterCard and Amex, but we do not process credit card charges
that are strictly for the event expenses. These entries should be processed by the event-holders through
Financial Services cashier’s office.
Weekly, Adv. Services transfers the ticket portion of the payments to the account number identified on
the Fund-raising Approval Form. The donation portion is credited to the specified allocation and
transferred according to the Transfer Policy in McMaster University’s Charitable Giving Policy.
Use of Funds Raised
All funds tax receipted by McMaster University must be used for university approved activities.
Revenues obtained from charitable gifts must remain under the control of university personnel.
These funds cannot be re-directed to any outside group or agency or other countries. Any efforts to
join forces with outside charitable organizations and hold joint fund-raising events must first be
approved by the Vice President of University Advancement (as per McMaster’s Charitable Giving
Policy). Approval to hold such an event will be decided in light of all relevant University and CRA
policies.
Information Contacts
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The Decentralized Advancement Officer within each Faculty should be the first source of
information.
The Associate Director of Annual Giving or designate is available for events run in conjunction with
the central Development Office.
For technical issues or Policy questions, either the Director of Advancement Services or the
Supervisor, Advancement Services can provide assistance.
Interpretation Bulletin - http://www.ccra-adrc.gc.ca/E/pub/tp/i110r3em/it110r3e.htm
Newsletters - http://www.ccra-adrc.gc.ca/tax/charities/newsletters-e.html
Attachments
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Request for Prospect Clearance/ Fund Raising Appeal Form
Event Checklist
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McMaster University
Request for Prospect Clearance
Applicant’s Name (Primary Staff):
Date:
Address and Extension:
Project Title:
Project Summary:
Total Funding Required:
Project Time Line:
Solicitation Strategy: (Fund-raising will be conducted using the following methods)
 Submission of formal proposal by mail
 Direct mailing of fund-raising letter
 Tele  Telephone appeal
 Personal meetings and presentations
 Other__
Please attach on a separate piece of paper a list of Prospects (anticipated sources of private-sector funding) in the
following format:
Prospect Name
ID
Ask Amount
Rationale
Note: Under the rationale section, please indicate the reasons why you believe the prospects that you have selected
are suitable for your project. Any relevant relationships or contact information pertaining to the prospects can also be
included in this section. If you want to clear any associated entities to your prospect i.e. spouse, company,
foundation etc. please specify these in your request.
Project Approval: Dean/Vice-President________________________________ Date________________
( Print Name )
Please complete both sides of this form and return completed request to Prospect Clearance, Advancement
Services, DTC - 125, Tel: (905) 525-9140 Ext. 23513, Fax: (905) 546-5209 (email “clear”).
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
McMaster University – Fund Raising Appeal Form
To ensure that the fund raising initiatives of McMaster University are receipted in accordance with
University and Revenue Canada Charitable Giving Policies, individuals who wish to engage in fund raising
activity on behalf of the University must complete this form. Gift receipts will not be issued for projects that
fail to receive approval and follow the procedure outlined.
“A gift, for the purposes of the Income Tax act, is a voluntary transfer of property for which the donor
expects and receives nothing of value in return.” – quote from McMaster University Charitable Giving
Policy. Please provide details of any potential donor benefit. If holding an event, list all activities in which
participants may engage in while at event.
FAS Account # for Donations:
If tickets are to be
sold please complete
the following:
Please note: Donations are transferred May 1 unless there
is an “immediate need,” in which case please contact the
Donations Supervisor at ext. 24576
Ticket Price
Tax Receipt Amount
FAS acct # for ticket
portion
Are pledge cards required? Y/N
If you are planning to send a letter and/or use customized pledge cards, please include a sample of each
with this form for our review.
Is a word processing merge file required? Y/N
Associate Director, Annual Giving: Please sign and
forward a copy of this form to Donations Co-ordinator,
Advancement Services, for review and codes. Codes will
be emailed back to the Associate Director, Annual
Giving.
Development Approval:_____________________
Date: ___________________________________
Solicitation Code:
Allocation Code:
Once codes have been assigned, the Associate Director, Annual Giving will submit standard
solicitation email form to Reports Specialist requesting pledge cards and merge file. Pledge cards
not required for events.
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Event Checklist
Type of Event (tick each activity occurring at the event)
Golf Auction Concert Dance Dinner Celebrity Reception Run Wine Tour Other
Event Price $____________ +
Donation $____________ +
Ticket Price $____________ =
Activities
Cost/person
Cost/person
 breakfast
_______
 greens fees
_______
 lunch
_______
 golf carts
_______
 dinner
_______
 other
________
 dance
_______
 Tee-off grab bag _______
 Door Prizes
(items included)
_______
 Hole-in-one Prize_______
(or similar prize)
 Lottery
 Other
_______________________________________
_______________________________________
(types of prizes)
______________________________________________
(describe prize)
__________________________________
(describe prize)
__________________________________
(describe other activities)
Describe how auctions, prizes etc. will be handled so as to qualify the event for participant tax
receipts_____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
_____________________________ ____________________
__________________
(Name of group organizing the Event)
(Organizer’s Signature)
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(Name of Organizer)