Meet Dana. She is made up, and so is her tournament, but I have watched real organizers walk the same fairway. Dana volunteers for a small, registered charity, and this year she put her hand up to run the golf day. She did what most of us would do: She called the course, got a price for the round and a cart, added a dinner, and settled on $175 a golfer. It felt right. It covered the costs and left $20 a head for the cause. She sent the announcement and felt, for about a week, like a genius.
Then a golfer emailed. “Will I get a tax receipt for this?”
Dana had assumed so. It’s a charity, it’s a fundraiser, and receipts are what charities do. But when she went looking, she found that the CRA’s rules run in a particular order, and she had done everything in the opposite one.
While golf season is coming to a close in most of Canada, it means you have a considerable lead up period to organize a golf fundraiser for next spring. That requires a lead up time and the knowledge to ensure everything goes to plan and that the beneficiaries, the participants and the organizers have all their tees crossed and their fairways dotted.
The rules she found
The first rule is simple enough. The receipt can only cover the gift part of the payment, which is what the golfer paid minus the fair market value of what they got back. The second rule is the one that bites. If the advantages are worth more than 80 percent of the payment, the CRA generally considers that there is no true intention to make a gift, and the charity can’t issue a receipt at all. Not a small one. None.
Dana’s next surprise was how the CRA counts the advantages. It uses ordinary prices, not what the event happens to pay. The green fee is the rate normally charged to non-members at the time of the event, group or individual (members of a host club who normally pay nothing count as $0). The cart is its regular cost. Meals are what the restaurant or caterer charges, excluding tips. Complimentary items go in at retail. Door and achievement prizes are counted at retail, totalled and spread across the tickets sold. A hole-in-one prize can be left out, because the CRA accepts the chance of winning is nominal.
To see how it works on a good day, Dana read the CRA’s own example. A $200 ticket includes a $50 green fee, a $20 cart, $30 of food and $35 of complimentary items. That is $135 of advantages, which is 67.5 percent of the fee. It passes, and the receipt for a non-member is $200 minus $135, or $65. There is a small-item exception: advantages worth no more than the lesser of $75 or 10 percent of the gift need not be subtracted. Ten percent of $200 is $20, and $35 is over that, so the CRA counts the whole $35. The exception also doesn’t reach the heart of the event, which is the round, the cart and the meal.
The scramble
Now Dana ran her own numbers. (These are mine, invented for illustration.) A $95 green fee, a $20 cart and a $40 dinner come to $155. Against a $175 fee, that is 88.6 percent. Over the line. No receipts, even though $20 a golfer really was going to the cause.
The fee was already public. Dana swore quietly, made tea and looked for the honest ways out.
The first was to raise the fee to $200. Advantages would then be 77.5 percent of the fee, and each golfer’s receipt would be for $45. The second was to take the dinner out of the fee and sell it separately. Advantages fall to $115, or 65.7 percent, and the receipt is $60. That second route is my own reading of how the numbers work, not a CRA statement, so she was wise to check it with an accountant before touching the page.
Either way, she had to write to golfers who had already registered and explain the change. Nobody enjoys that email.
What Dana would do the second time
She would start with the receipt and work backwards. Before announcing a fee, she would write down everything a golfer gets for it: the round, the cart, the meal, the prizes, the gifts. She would ask the course for its regular prices and keep the rate sheet or a dated email (a habit I recommend, not something the CRA requires). She would add up the advantages, divide by the fee, and change the price or the inclusions if the answer came out over 0.8. She would check any small extras against the lesser of $75 or 10 percent. She would show the proper receipt amount on the registration page, keep her calculation on file, and ask an accountant to look over the final numbers.
That is an hour of arithmetic before the announcement, and a lot cheaper than a scramble after it.
If you’re running a golf fundraiser, the order is the whole lesson. Don’t pick a fee that feels right and sort out the receipts afterward. The price and what it includes decide whether a receipt is even possible. Settle that first, and you can spend the rest of your time on the part that is actually fun, which is getting people out on the course for your cause.
Carl Zuzart runs TourneyCommand, a golf tournament platform in Milton, Ontario. He previously owned an indoor golf facility. A free golf tournament fee and receipt calculator is at https://tourneycommand.com/golf-tournament-fee-calculator/
Please keep in mind this article summarizes the CRA’s published guidance for general information. It is not tax advice. If you want to delve more deeply, we recommend:
Sources (Canada Revenue Agency):
– Fundraising events, issuing receipts: https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/operating-a-registered-charity/issuing-receipts/fundraising-events-issuing-receipts.html
– Split receipting: https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/operating-a-registered-charity/issuing-receipts/split-receipting.html
