It is common for volunteers to donate money, goods and time to not-for-profit organisations.
You may be asked by your not-for-profit organisation's volunteers whether their expenses or donations by them are tax deductible.
While the income tax law contains no specific deductions for voluntary work expenses, donations by volunteers to your not-for-profit organisation may be tax deductible.
Tax-deductible donations are called gifts.To be tax deductible, a donation must comply with relevant gift conditions, and be:
- made voluntarily
- made to a deductible gift recipient (DGR)
- in the form of money ($2 or more) or certain types of property.
A donation of a service, including a volunteer’s time, is not tax deductible as no money or property is transferred to the DGR.
Payments that are not tax-deductible donations include:
- payments to school building funds as an alternative to an increase in school fees
- purchases of raffle or art union tickets, chocolates and pens.
Example: Not a gift
Chamith buys a clock at a charity auction for $200. This is not a gift even if Chamith has paid a lot more than the value of the clock.
End of exampleA token of acknowledgement from a DGR can be consistent with a payment being a gift.
Example: Gift
Sheifa receives a lapel badge for her donation to a DGR. The lapel badge is a token of acknowledgment and not a material benefit and the donation is a gift.
End of exampleSee also:
As voluntary work is usually unpaid, most expenses incurred in voluntary work are not tax deductible. However, volunteers often donate money, goods and time to not-for-profit organisations. To be tax deductible, a donation must meet several requirements.