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Transcript of Video on What to Keep in Mind when Accepting Contributions

In this module, we discuss some important points to keep in mind when accepting contributions and issuing receipts. We'll look at contributions from joint accounts, partnerships or sole proprietors, and online contributions with a processing fee.

As a best practice, it is recommended that you only accept contributions made by way of a traceable instrument, such as an e-transfer, cheque or money order, as these methods link the contributor to the contribution.

A contribution receipt must be issued for each monetary or non-monetary contribution over $20.

In the event that you receive a contribution in the form of a cheque from a joint bank account, the contribution is generally reported under the name of the individual who signed the cheque.

However, if the cheque is accompanied by written instructions signed by both account holders indicating how to allocate the contribution to the contributors, the contributions are reported in accordance with that agreement.

In the event that you receive a cheque from a partnership, the partnership has to provide the following information in writing: the name and home address of each contributor, the voluntary nature of each contribution, who it is intended for, and the amount of each contribution.

The instructions must then be signed and dated by each contributor. Each contributing partner's share of a partnership draw should also be reduced by the amount of that partner's contribution.

As you already know, only individuals can make contributions.

A contribution from an unincorporated sole proprietor can be accepted, but it has to be recorded in the individual's name, and not in the business name.

When a contribution is received through an online payment service, a processing fee might apply. The full contribution amount has to be recorded as a contribution, and the processing fee has to be recorded as an expense.

For example, if a candidate receives a $500 contribution through an online payment service and the net deposit to the bank account is $490, the official agent has to record and issue a receipt for a contribution of $500 and record an expense of $10.

To learn more, please take a look at our other modules and resources.

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