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POL.COR.13.18
Page 1 of 3
Charitable Donations Receipt Policy
Policy
POL.COR.13.18
Charitable Donations Receipt Policy
Policy Type:
Corporate Policy (Approved by Council)
Date Approved: April 2013
Department:
Finance
Staff Report:
FIT.13.22
By-Law No.:
None
Policy Statement
The Town of The Blue Mountains will issue official receipts to donors for eligible donations with a
net cash value or net fair market value of $20 or more if requested.
Purpose
The policy formalizes the charitable donations receipt program, including accounting for
donations of cash or in-kind made to the Town. This policy also outlines the standards for
evaluating donations in accordance with Canada Revenue Agency (CRA) guidelines. This policy
will serve as the foundation for standard operating procedures for issuing official charitable
donation receipts (official receipts) to donors for income tax purposes.
Application
This policy applies to all departments within the Town and the organizations and individuals
that contribute either financial or in-kind donations to the Town's operations, programs,
services or facilities.
Definitions
Charitable donations - voluntary transfers of tangible property, including cash
Donations in-kind - tangible property, other than cash, that are eligible donations.
Fair Market Value (or Valuation) - The highest dollar value that a property would bring in an
open and unrestricted market, between the willing buyer and the willing seller who are acting
independently of each other. The fair market value of a property does not include taxes paid;
taxes are costs incurred by the purchaser.
POL.COR.13.18
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Charitable Donations Receipt Policy
Net Amount of Donation - The fair market value of the donation less any advantage/benefit
received or to be received as a result of the donation.
Non-Qualifying Donations - donations that cannot be acknowledged with official donation
receipts for income tax purposes, in accordance with CRA guidelines.
Procedures
To be eligible for an official receipt, the donation has to:
Be made payable to the Town, and
Be in cash or in-kind; and
Be voluntary; and
Be supportive of Town's mandate or beneficial to the community of the Town of The Blue
Mountains;
Donations in-kind may be accepted only after the following has been assessed:
Compliance with Town by-laws and/or policies
Compliance with the laws, conventions and treaties of the other levels of government
Consistency with the Town's priorities, mandates and strategic and business plans
Associated risks (e.g. financial risks, political risk, health and safety issues)
Condition of the donation
Value of the donation
Usefulness of the donation to the Town
Cost/benefit analysis, if determined by the Treasurer to be necessary, would consider
installation, storage, maintenance, renewal, replacement and relevant costs;
Written valuation of donations in-kind, done within the last 6 months, shall be submitted with
the requests for official receipt and shall meet the following requirements:
$1,000 or less:
appraisal by knowledgeable internal staff; plus
valuation from online auction and shopping website
Over $1,000:
external appraisal by an independent and arm's length competent individual is
required;
the responsibility and the costs associated with obtaining a qualified appraisal
shall be determined by the departmental director.
Authority for acceptance or denial of donations in-kind with appraised value of:
Under $25,000 requires the Treasurer or Chief Administrative Officer
$25,000 or more requires Council approval
POL.COR.13.18
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Charitable Donations Receipt Policy
Non-Qualifying Donations that cannot be acknowledged with official donation receipts for
income tax purposes, in accordance with CRA guidelines:
Intangibles such as services, time, skills, effort
Donations that are given to the Town intended as a flow through to a specified recipient
who does not have charitable organization status.
Donations of business marketing products such as supplies and merchandise
Sponsorship in the form of cash, goods or services toward an event, project, program or
corporate asset, in return for commercial benefit (i.e. logo placement or presenting
sponsorship). The intent of a sponsorship is to enhance the image and marketing
opportunities of the sponsor in its target market and/or the community. Sponsorships
are reciprocal arrangements benefiting both parties. Usually the cost to the sponsor is
categorized as a business expense.
Exclusions
N/A
References and Related Policies
Under Income Tax Act, 1985, The Corporation of the Town of The Blue Mountains is classified
as a "qualified donee" for charitable donations, and as such is afforded the same privileges as a
charitable organization without a registered charity number.
According to sections 110.1 (1) (a) and 118.1 (1) of the Income Tax Act, Canadian municipalities
are permitted to issue receipts for charitable donations. These donations may come in the form
of cash or in-kind.
Consequences of Non-Compliance
Town could lose its eligible donee status and be prohibited from issuing charitable tax receipts.
Review Cycle
This policy will be reviewed once per term of Council.
__________________________
(Signature)