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Silent auction fundraiser? 5 things to work out before bidding starts

Short answer

Set and display the fair market value of every item before bidding opens; without that no receipt can be issued. The winning bidder's receipt is only for the amount paid above the item's value. And only if the bid is high enough that the item is not more than 80% of it. That means a bid of at least 125% of the value. Donated goods can earn the donor a receipt at their value; donated services cannot.

Rex Tax Inc. · Information checked against official sources. Last updated October 2, 2026 · Published October 2, 2026

Who this is for

Registered charities running silent or live auctions, and the committees that collect the items. Nonprofits that are not registered charities can run auctions but cannot issue donation receipts; the record-keeping still applies.

The five things

  1. Value every item in advance. The fair market value must be established and made known to bidders before the auction. If it is not, the CRA says the charity cannot issue a receipt to the winning bidder, whatever they paid.

  2. Know the receipt arithmetic. Receipt = winning bid minus fair market value, and only when the value is not more than 80% of the bid. A $400 item needs a $500 bid for any receipt; at $600 the receipt is $200.

  3. Treat donated goods and donated services differently. A business that donates a product can receive a receipt for its fair market value, as a gift in kind. That applies when a registered charity receives it. A person who donates a service, such as a photography session or a haircut, cannot receive a receipt for it. Services are not property. A gift certificate issued by the business itself has its own rules; ask before promising a receipt.

  4. Record the winning bids by person. Name, item, amount paid, date. The bid sheet is the record for the receipts and for the books.

  5. Keep the valuation evidence. How each value was set: the retail price, a quote, an appraisal for anything significant. The CRA expects it to be defensible.

One thing many people do not realize

An item worth $400 needs a winning bid of at least $500 before any receipt can be issued. At $500 the $400 item is exactly 80% of the payment. A $450 bid on that item gets no receipt at all, not a receipt for $50. The 80% rule applies to each item separately, and the value has to have been disclosed to bidders before they bid.

What to prepare

  • An item list with donor, description, fair market value and the evidence for it
  • Bid sheets with a line for the bidder’s full name and contact details
  • The receipting calculation per item, prepared before the event
  • Confirmation that the organization is a registered charity if receipts are planned

When professional help may make sense

High-value items, items donated by businesses expecting recognition, and auctions run alongside a ticketed dinner. Each piece has its own rule and they interact.

How Rex Tax may be able to help

Event bookkeeping and the receipting calculation for charities and nonprofits, prepared before the event so the treasurer’s job afterwards is a reconciliation, not a reconstruction.

Official sources

Related guides

This guide is general information, not advice about your situation. It reflects the rules for the 2026 tax year. It has not yet been reviewed by a practitioner. The information was checked against the official sources listed above on the date shown. Rules change. Check the official sources above or ask us. How we prepare these guides.

Running an auction for your organization?

We set up the item list with values, the bid records and the receipting calculation so the treasurer is not reconstructing it afterwards. Help is available in English and Punjabi.

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