The Government of Canada allows registered charities to issue official tax receipts for charitable giving. This is carefully regulated and every charity is required to file a "charity return" on an annual basis in order to comply with and continue issuing charitable receipts.
While charitable giving is never the motivation for giving, it is helpful to know that the Government of Canada supports charities by allowing charities to issue tax receipts which will then result in approximately 35% of the donation being returned to the donor (by way of a reduction on their annual income tax).
But that leads to the question... what qualifies as a charitable contribution (for tax purposes)? That is the question this post will attempt to answer. This is not a "legal" answer... it is only a summary to the best of my knowledge.
Let's look at some examples of what qualifies and what does not qualify.
A general (unrestricted) donation to the church will always be considered a charitable contribution. This would include any tithes or offerings that are not designated to anyone or anything in particular. Furthermore, donations to our building fund would also be considered a charitable contribution.
A donation to a mission or ministry that the church supports; provided that mission or ministry is also a charity, qualifies as a charitable donation. For example, you might want to send a donation to Wycliffe or to Avant Ministries. You can certainly send it directly to those ministries; or you can send it to the church earmarked for those ministries. Because those ministries are charities themselves, we will process your donation, send it off to the respective organization, and we will be the ones to send you a tax receipt at the end of the year.
Likewise, donations to ministries within the Church of the Nazarene are also charitable contributions. For example, donations to the Thanksgiving Offering (for World Evangelism) or the Alabaster Offering or any other Nazarene offering or missions project are all charitable contributions.
What is NOT a charitable contribution is donations made to a specific individual. For example, let's say you want to bless one of your pastors with a gift of $100. That is very kind of you (and thank you, by the way); but that is not a charitable contribution because it is for an individual who is not a charity themselves. It is not treated any different than, say, you gave that $100 directly to one of the pastors. The benefit of giving it through the church would be that your gift would be anonymous to the pastor involved, but it wouldn't be a charitable contribution.
You might want to give a financial gift to a missionary. That is also not a charitable contribution if you are giving it (even through the church) for the individual's personal use. If on the other hand, you are giving it to that individual's missionary work, or deputation fund (and not to the individual themself) then it is a charitable contribution.
For example, you might want to bless Nora with a $100 gift. You give those funds to us and we send those funds to Nora. That is not a charitable contribution. However, if you earmark a $100 donation to Nora's Wycliffe Ministry (and we send that money, on your behalf, to Wycliffe for Nora's ministry) then it is a charitable contribution.
What about benevolence giving? From time to time there are special needs and we would like to help out people through a difficult situation. Here's how that works. If you are giving a donation to the church's Benevolence Fund, that is definitely a charitable contribution... but do keep in mind that the donation is to the fund, not to any particular individual. If you earmark it for a particular individual, it is no longer a charitable contribution. By giving to the Benevolence Fund you are leaving it up to the discretion of the church board to use the funds to help individuals that the Board determines. If you are directing your funds to a specific person, then that is not a charitable contribution.
What about fundraising events? For example, we sometimes have a baked goods auction. We have seen some cakes auctioned for $100 or more (who can resist Lindsy's cakes?). This is a little more tricky because the cakes definitely have value (you are getting something back for your $100), but the cake doesn't usually sell for $100 either (in other words, you are being generous). In this case, the value of the cake is deducted from your donation.and the balance is considered a charitable contribution. So, for example, the cake might be valued at $40; but you give $100 for it. We would issue you a tax receipt for $60 in this example.
There is also the question about services in lieu of a donation. These are not charitable contributions. For example, we need an electrician to do about $500 of labour for us. Mr. (or Mrs.) Nice Electrician does the work and does not charge us. That is very kind (and appreciated) but we can not issue a charitable receipt for that. If on the other hand, Mr. (or Mrs.) Nice Electrician bills us $500 (and we pay them $500), then they can give us back $500 (because, after all, they are nice), then we can give them a chartiable receipt for that $500.
Finally, I should mention "gifts in kind". These are usually physical items that have a value and are donated to the church. Gifts in kind are charitable contributions.... but only to the actual value they have (at the time of donation) and only if the church is actually looking for and wanting that item. For example, the church might be looking for a video camera and you just bought a video camera two months ago and decided to donate it to the church. You can give it to the church and we can issue you a tax receipt for the value of that camera. On the other hand, you might have a computer that you paid $2,000 for about two years ago. We are not looking for a computer, and that computer is definitely not valued at $2,000 anymore; so we would not issue you a charitable contribution receipt for that gift.
The rules for a charitable contribution are very specific and are there to safeguard the system so that it is not misued and continues to benefit charities. I do hope this helps clarify questions you may have. If you need any more information, please do contact the church office.
While charitable giving is never the motivation for giving, it is helpful to know that the Government of Canada supports charities by allowing charities to issue tax receipts which will then result in approximately 35% of the donation being returned to the donor (by way of a reduction on their annual income tax).
But that leads to the question... what qualifies as a charitable contribution (for tax purposes)? That is the question this post will attempt to answer. This is not a "legal" answer... it is only a summary to the best of my knowledge.
Let's look at some examples of what qualifies and what does not qualify.
A general (unrestricted) donation to the church will always be considered a charitable contribution. This would include any tithes or offerings that are not designated to anyone or anything in particular. Furthermore, donations to our building fund would also be considered a charitable contribution.
A donation to a mission or ministry that the church supports; provided that mission or ministry is also a charity, qualifies as a charitable donation. For example, you might want to send a donation to Wycliffe or to Avant Ministries. You can certainly send it directly to those ministries; or you can send it to the church earmarked for those ministries. Because those ministries are charities themselves, we will process your donation, send it off to the respective organization, and we will be the ones to send you a tax receipt at the end of the year.
Likewise, donations to ministries within the Church of the Nazarene are also charitable contributions. For example, donations to the Thanksgiving Offering (for World Evangelism) or the Alabaster Offering or any other Nazarene offering or missions project are all charitable contributions.
What is NOT a charitable contribution is donations made to a specific individual. For example, let's say you want to bless one of your pastors with a gift of $100. That is very kind of you (and thank you, by the way); but that is not a charitable contribution because it is for an individual who is not a charity themselves. It is not treated any different than, say, you gave that $100 directly to one of the pastors. The benefit of giving it through the church would be that your gift would be anonymous to the pastor involved, but it wouldn't be a charitable contribution.
You might want to give a financial gift to a missionary. That is also not a charitable contribution if you are giving it (even through the church) for the individual's personal use. If on the other hand, you are giving it to that individual's missionary work, or deputation fund (and not to the individual themself) then it is a charitable contribution.
For example, you might want to bless Nora with a $100 gift. You give those funds to us and we send those funds to Nora. That is not a charitable contribution. However, if you earmark a $100 donation to Nora's Wycliffe Ministry (and we send that money, on your behalf, to Wycliffe for Nora's ministry) then it is a charitable contribution.
What about benevolence giving? From time to time there are special needs and we would like to help out people through a difficult situation. Here's how that works. If you are giving a donation to the church's Benevolence Fund, that is definitely a charitable contribution... but do keep in mind that the donation is to the fund, not to any particular individual. If you earmark it for a particular individual, it is no longer a charitable contribution. By giving to the Benevolence Fund you are leaving it up to the discretion of the church board to use the funds to help individuals that the Board determines. If you are directing your funds to a specific person, then that is not a charitable contribution.
What about fundraising events? For example, we sometimes have a baked goods auction. We have seen some cakes auctioned for $100 or more (who can resist Lindsy's cakes?). This is a little more tricky because the cakes definitely have value (you are getting something back for your $100), but the cake doesn't usually sell for $100 either (in other words, you are being generous). In this case, the value of the cake is deducted from your donation.and the balance is considered a charitable contribution. So, for example, the cake might be valued at $40; but you give $100 for it. We would issue you a tax receipt for $60 in this example.
There is also the question about services in lieu of a donation. These are not charitable contributions. For example, we need an electrician to do about $500 of labour for us. Mr. (or Mrs.) Nice Electrician does the work and does not charge us. That is very kind (and appreciated) but we can not issue a charitable receipt for that. If on the other hand, Mr. (or Mrs.) Nice Electrician bills us $500 (and we pay them $500), then they can give us back $500 (because, after all, they are nice), then we can give them a chartiable receipt for that $500.
Finally, I should mention "gifts in kind". These are usually physical items that have a value and are donated to the church. Gifts in kind are charitable contributions.... but only to the actual value they have (at the time of donation) and only if the church is actually looking for and wanting that item. For example, the church might be looking for a video camera and you just bought a video camera two months ago and decided to donate it to the church. You can give it to the church and we can issue you a tax receipt for the value of that camera. On the other hand, you might have a computer that you paid $2,000 for about two years ago. We are not looking for a computer, and that computer is definitely not valued at $2,000 anymore; so we would not issue you a charitable contribution receipt for that gift.
The rules for a charitable contribution are very specific and are there to safeguard the system so that it is not misued and continues to benefit charities. I do hope this helps clarify questions you may have. If you need any more information, please do contact the church office.
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