> Financial Services Department > Guide to Financial Management > Fundraising and Donations > Gifts-in-Kind (Non-Monetary Donations)
Gifts-in-Kind (Non-Monetary Donations)

Gifts-in-Kind are gifts of property other than cash and marketable securities. This includes gifts of supplies, equipment, books and artwork. This section provides an overview of the following:

Definitions

Appraisals

Processing Gifts-in-Kind

Completing the GIFT IN KIND Processing Form

What Happens Once the GIFT IN KIND Processing Form is Distributed?


Definitions

Gifts-In-Kind
These are gifts of property other than cash (i.e. cheques and credit card payments) and marketable securities. Gifts-in-Kind include gifts of supplies, equipment, books and artwork. For donations of cash and marketable securities, refer to the section Monetary Donations.

Gifts-In-Kind eligible for tax receipt
The following requirements must be met:

  • the gift is of value to the University
  • an independent appraisal has been made of the fair market value of the gift
  • gift certificates should be reviewed with Gift Planning prior to acceptance as the terms of the certificate, and whether or not the donor is the issuer, determine the ability and timing of a receipt being issued.

Gifts-In-Kind NOT ELIGIBLE for tax receipt:
The following Gifts-In-Kind do not qualify as charitable donations under the Income Tax Act:

  • gifts of professional or personal services of an individual,
  • gifts by a company of its principal product or service. Such gifts are considered promotional expenses rather than charitable donations under the Income Tax Act.
  • donations of old clothes, furniture, home baking, etc.
  • a payment for a lottery ticket or other chance to win a prize is not a gift.

Gifts of Cultural Property under the Income Tax Act
Special incentives have also been created to encourage Canadians to keep significant cultural property (for example, paintings, sculptures, books, or manuscripts) in Canada.

A donor can claim gifts of cultural property up to 100% of his/her net income that have been certified by the Canadian Cultural Property Export Review Board as being of outstanding significance and national importance. In addition, the donor does not have to pay any tax on capital gains resulting from the gift. However, he/she can deduct any capital loss on the property within the usual limits.

This incentive applies when a donor gives the property to Canadian institutions and public authorities that have been designated by the Minister of Canadian Heritage. This designation ensures that institutions receiving cultural property have the appropriate measures in place to collect and preserve it, and make it accessible to the public for research or display purposes.

For more information about gifts of cultural property, please refer to the guide “ Applications for Certification of Cultural Property for Income Tax Purposes”. For additional information, please contact the Canadian Cultural Property Export Review Board's Secretariat by calling (819) 997-7761, by fax at (819) 997-7757, or by the web, at:

http://www.pch.gc.ca/pc-ch/cntct/index-eng.cfm

In summary:

  • any capital gains triggered by the gift are not be included in income,
  • the claim ceiling for the value of the tax receipt is 100% of donor's net income.

Other forms of Monetary Gifts and Gifts-in-Kind
University donors have various options of giving monetary gifts and gifts-in-kind such as bequests, registered retirement funds, charitable remainder trusts, gifts of residual interest, and life insurance. A brief description of these vehicles can be found at http://boundless.utoronto.ca/how-to-give/.

Consult with Gift Planning as required.


Date of Donation
The date that legal ownership of the property is transferred from the donor to the University, which in the majority of cases is the date of physical delivery of the gift-in-kind.

An example of an exception: an object on loan before the date of donation.


Appraisals

Appraisals for income tax purposes should be made by a qualified appraiser not associated with the donor or the University. It is the department’s responsibility to ensure the gift-in-kind is appraised.

Determining the fair market value (FMV) is not a simple process. Numerous facts regarding the property must be considered. One or more appraisals to establish the FMV may be required. Consideration must be given to numerous facts regarding the property. The appraised FMV can be used to calculate the eligible amount of the gift unless the deemed FMV rules apply. See CRA publication P113(E) Rev. 07 or consult with Gift Planning.

Where the value of the gift is $1,000 or less, CRA (Canada Revenue Agency) will generally accept a valuation made by a University staff member, providing the staff member is knowledgeable in the field and is qualified to establish the value of the gift. To meet the requirement for independence and avoid potential conflict of interest situations, the staff member should not be a member of the department receiving the gift.

If it is difficult to find an independent appraiser or if it would involve unwarranted expense, CRA will accept a valuation done by a University staff member, even though that value might exceed $1,000 if the circumstances are very unusual and if the FMV is just over $1,000.However, such persons must be qualified to establish the value of the gift. Consult with Gift Planning prior to processing the gift.

Consult with Gift Planning, Division of University Advancement as required.


Processing Gifts-in-Kind

Once a department becomes aware of a donor’s intension to make a non-monetary gift to the University, the department will need to do the following PRIOR to submitting the GIFT IN KIND Processing Form to Gift Planning:

  • Gifts of Cultural Property - If the donor is requesting a designation of Cultural Property, an application must be made to the Canadian Cultural Property Export Review Board before the gift is accepted. Refer to the Gifts of Cultural Property under the Income Tax Act (above). The Board requires written professional appraisals. The approval process generally takes several months. The Executive Director, Gift Planning is available to answer any questions you may have on the tax consequences of donating cultural property.
  • Written appraisal – The department must obtain a written appraisal of the value of the gift. Refer to the section Appraisals (above) for detailed requirements.
  • Deed of Gift – The department completes a Deed of Gift if the value of the gift-in-kind is $1,000 or greater. Deeds of Gift are created by each Division based on templates available from the Director, Gift Planning, Division of University Advancement.
  • Gift in Kind from an estate or facilitated by a donor’s Power of Attorney should be reviewed with Gift Planning prior to processing.

Consult with Gift Planning, Division of University Advancement as required.


Completing the GIFT IN KIND Processing Form

The GIFT IN KIND Processing Form is used to process Gifts-in-Kind. Once the written appraisal is received (and the approved designation of Cultural Property, if applicable), the department should complete all parts of the GIFT IN KIND Processing Form except those sections to be completed by Division of University Advancement. If assistance is required to complete the form, please contact Gift Planning, Division of University Advancement.

Send the GIFT IN KIND Processing Form (*) to:

Director, Gift Planning
Division of University Advancement
21 King's College Circle

* attaching the following supporting documentation, where applicable:

  • original of the written appraisal,
  • the designation of the gift as Cultural Property,
  • Deed of Gift.

A copy of the form and any supporting documentation, including the written appraisal, should be retained in the department.

If the gift-in-kind is a capital asset, the department must update the departmental capital asset records in accordance with Capital Asset guidelines. Generally, this will include tangible items (e.g. paintings, rare books, etc.) with an appraised value exceeding the University’s threshold for capital assets (currently $5,000).


What Happens Once the GIFT IN KIND Processing Form is Distributed?

Division of University Advancement
Once received, Gift Planning (DUA) reviews the information contained in the GIFT IN KIND Processing Form and the supporting documentation for completeness.

If the gift is not eligible for a tax receipt, Gift Planning will advise the department, and update the donor’s record in DIS to ensure no tax receipt is issued.

If the gift is eligible for a tax receipt, Gift Planning will indicate their approval on the form and update the donor’s record in DIS. A tax receipt will be issued when approval has been indicated.

The written appraisal is then attached to the copy of the tax receipt, and is kept on file in DUA for audit purposes.

Note that with “Gifts in Kind”, no funds are made available for spending by the department as these types of gifts generate no cash flow. The benefits are indirect, by providing the University with, for example, increased aesthetics (i.e. a painting), or varied learning opportunity (i.e. a rare set of books).

Financial Services Department
The Financial Services Department will report the Gift-In-Kind to the Director, Risk Management and Insurance for consideration of insurance implications, if any.



Last revision: February 28, 2012

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