Are donations to crowdfunding campaigns tax deductible?
Tax deductibility rules vary by country, but generally speaking, the rules governing tax deductibility are the same regardless of whether you're giving to online via a crowdfunding campaign or offline. In most countries, donations to crowdfunding campaigns are only tax deductible if:
- they're given to an organisation with the correct tax status; and
- they're given with receiving nothing in return (that is, as a gift); and
- they're given by a tax resident in the same country as the organisation, who would have otherwise paid tax in that tax year
Below, are the country specific rules. They should be taken as general advice and you should do further research to see if this guide aligns with your personal situation.
In Australia, donations to crowdfunding campaigns on Chuffed.org are only tax-deductible, if:
- they're given to an organisation with deductible gift recipient (DGR) status - note that only a subset of charities/non-profits have this status;
- they're given as a gift, without receiving any perks or rewards that have a market value; and
- they're given by a tax resident of Australia
There are more clarifying rules over at the Australian Tax Office website.
For DGR-organisations running campaigns on Chuffed.org, we can issue receipts on your behalf.
Note that donations to campaigns run by individuals are generally not tax deductible.
In the UK, charitable giving works differently and the charity receives the benefit, not the donor. When a donor gives to a charity or a registered community amateur sports clubs ( CASCs), the charity can claim an extra 25p for every £1 you give.
In order to do this, the charity must:
- Be recognised as a charity or CASC for tax purposes;
- Be receiving a donations which complies with this list of the types of donations you can claim Gift Aid on;
The donor must:
- have paid at least as much in Income Tax or Capital Gains Tax in that tax year as they want to claim in Gift Aid
- make a Gift Aid declaration that gives the charity permission to claim it
To make this simple, Chuffed.org can collect Gift Aid Declarations on your behalf which you can then submit to HMRC to claim your Gift Aid.
In Canada, donors receive tax credits, not tax deductions. When they file their income tax return, they will need their receipts to be able to claim these credits. For an organisation to be eligible to offer the correct receipts to their donors, you must be a registered charity or registered Canadian amateur athletic association (RCAAA) .
To set this up , the charity will need:
- Their Charitable Registration Number
- Their Charity or Qualified Donee Address
- An Authorized Signature from the individual who has been authorized to sign donation receipts. This can be uploaded to our platform.
You can find more information on the website for the Government of Canada.
For the U.S. , donations will only be tax deductible if the organisation is a 501(c)3 nonprofit organization that is eligible in US to issue tax deductible receipts.
You can find more information on becoming a tax exempt organisation in the U.S. here .
To set this up on our platform, the organisation will need:
- Their EIN (Employer Identification Number)
- Their Non-Profit Organization Address
Donors will need to itemize their deductions as well as keep the right records. You can view this handy video the IRS have put together which explains this in more detail.
Alternatively visit their website to find out more.
Please note that for all regions, whilst the donation may be tax deductible, the processing fees and optional donation won't be.