On February 9, 2017, CRA published guidance on their website addressing cause-related marketing, which is where a registered charity works with a for-profit entity to promote the sale of the for-profit’s items on the basis that part of the revenues will go to the charity.
CRA noted that the benefit that the for-profit receives from this type of arrangement is considered an advantage. As such, the charity must quantify this advantage and reduce it from the amount of the donation to calculate the eligible donation. Where the total value of the advantage cannot be calculated, the charity cannot issue a receipt. That said, CRA noted it may be possible to claim the donation as an advertising expense.
For further information see Video Tax News Monthly Tax Update Newsletter, Issue No. 428