Principal Issues: Eligible amount of the participation fee paid by a sponsor in a fundraising event.
Position: Determined in the same manner as it would be for a participant - fee less advantages
Reasons: Sponsor is entitled to the advantages as a consequence of paying the fee. It doesn't make a difference whether he/she enjoys them personally or they are given to a third party.
June 17, 2009
Headquarters Income Tax Rulings Directorate Charities Directorate Lee Workman
Attention: Danie Huppe-Cranford 2009-032110
Sponsors - Fundraising Events
You have requested our views with regard to the determination of the eligible amount of a donation made by a sponsor with regard to a golf fundraising event. Income Tax Technical News No. 26 ("ITTN #26") provides an example with regard to the calculation of the advantage and eligible amount of the donation for a participant in a golf fundraising event but does not deal specifically with sponsors.
It is our view that the eligible amount of the donation made by the sponsor would be determined in the same manner as it would be for donors that attend the event. With regard to the example in ITTN #26 the eligible amount of the sponsor's donation would be $65 ($200 - 135). The sponsor is entitled to all of the benefits or consideration that a participant is entitled to independent of whether the sponsor decides to take advantage of them or transfer them to another person.
F. Lee Workman
Manager
Charitable and Financial Institutions Sectors
Income Tax Rulings Directorate
Legislation Policy and Regulatory Affairs Branch