(Pssst event volunteers) Running a charity auction could get you into a whole lotta tax trouble


Are you are a volunteer for a fundraising event?

Did you know that running a charity auction at your event can get you into a lot, (and I do mean a lot) of tax trouble?Why?

  1. Donated goods transactions, particularly in Canada, are rife with fraud. This makes CRA understandably grumpy. This leads to point #2
  2. It is really hard to tax receipt that donated bottle of wine (or donated anything) properly under Canada Revenue Agency (CRA) guidelines.
  3. Many charities tax receipt donated goods wrong just out of plain pig ignorance. This also makes CRA legitimately cranky.
  4. Some donors think that the amount they spend on a charity auction item is tax receiptable. They are wrong. It is not.
  5. Some charities will incorrectly issue a tax receipt rather than annoy a donor. Just because someone is complaining doesn’t mean they know tax law. This is a bad idea. See Points #1, 3, & 4.

Bottom line is an item that raises $1000 at your auction may lead to an audit, or worse, by Canada Revenue Agency.


If you still want to do a charity auction, you absolutely should. Just be sure you avoid tax receipting trouble spots.


Fine print. I am not a lawyer or accountant, certainly not a charity tax lawyer or charity tax accountant. Check with a charity tax lawyer or charity tax accountant (and not just your friend who happens to be a lawyer but specializes in mergers and acquisitions) for actual advice.

I learned much of this from Mark Blumberg. Any errors are mine, not his.

Leave a Reply

Your email address will not be published. Required fields are marked *