Watch: What is a charitable tax receipt?

Charitable Impact Founder and CEO, John Bromley, breaks down how tax receipts save money and why they’re an added incentive to participate in charitable giving.

Well, first of all, a charitable tax receipt is really important because it saves the donor money. It acts as a tax credit, so it reduces the amount of tax you pay. 

It’s issued by a registered charity for the fair market value of the donation that you make at the time of the gift. So, for example, if you’re giving cash and it’s $100, your tax receipt is gonna say $100. 

But what if it’s a public security, like a Google share or an Apple share? Then what we would do is, a charity would look and say, “How much is that worth?” And they would issue the tax receipt for the amount of the Google share, for example, that it’s trading on the market. 

So anything can be donated to a registered charity, as long as an independent source can put a value on it, and say “This is what it’s worth.” And then that’s the amount that goes on your tax receipt at the time of donation. 

It’s really important to use your tax receipts because it saves you money. The Canadian government allows registered charities, by law, to issue tax receipts to donors, because the Canadian government wants Canadians to participate in charitable giving, and they have a tax incentive for doing so.