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CRA Credit for a Donation

Answered by: 
Rebekah Leonard | CRCM

Question: 
I'm somewhat new to identifying CRA qualifying donations and am looking for opinions on whether I should or could try to include a contracted annual donation to our County Economic Development Group. This CEDG is a non-profit and their mission statement lines up with the Revitalize and Stabilize category. Our marketing director indicated that the funds are considered a sponsorship and doesn't think it would count. We do get an acknowledgement on their website as being a sponsor so to that affect I'm assuming she is viewing it more as advertising for her reasoning to not include it. Our name being included on the website is in acknowledgement of our level of donation and the funds are a general investment into the organization. It is not a specific advertising expense. We have included one off donations to this group throughout the years but apparently have never considered adding this sponsorship donation to the list of qualified donations. Would it qualify as described or could it qualify if we had any stipulations as to funds use?
Answer: 

Receiving a published "thank you ABC Bank for your support" does not disqualify a donation. Rather, look at what the donation is doing. If it is directly benefitting the qualified group's programs and services, you should get CRA credit for it. In contrast, event sponsorships (like dinners and galas) are problematic. Examiners often reject those donation dollars because they are spent on catering, venues, table rentals, etc.

Confirm that the bank's donated funds are directly going in support of the group's program / services: either by obtaining a letter from them; or by you sending them a letter stating that funds are to be used directly for programs and services only.

First published on 10/15/2023

Filed under: 
Lending
Filed under lending as: 
CRA

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