The Cost Of Manual Tax Receipting

As a charity, it can be hard to walk the line between reducing overhead costs to please donors and ensuring that your practices are sustainable and efficient. Some smaller organizations may choose to stick to the way they have always done things because, let’s face it, change is hard. Either way, we know that many charities stick to manually issuing donation receipts, particularly for their offline donors, walking in with cash in-hand or cheques.

But, there’s a real cost to manually issuing donation tax receipts. Sometimes this cost is explicit, as with the cost of printing and mailing tax receipts or the hours staff spend living in an Excel spreadsheet. Other times, this cost is implicit, with time spent chasing up on receipts that donors have lost when it could be better used on program delivery.

In this blog, learn how relying on a manual process costs your charity and how you can better manage that process with a purpose-built system.  

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Table of Contents

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Missing Details & Mistakes

With 13 pieces of information you have to include on donation receipts, it’s easy to miss something. On some systems and, especially, if you are recording these details on an Excel spreadsheet, it can be easy to leave out details because the fields are not set as mandatory. Any receipts that are missing information can be challenged by the CRA. 

Aside from leaving information out, It’s also easy to add mistakes in. You may input the wrong number manually or you may enter text into a number field or make a typo. This not only creates mistakes on the donation receipt but makes it hard for you to leverage your data into meaningful reports. For example, if you were looking for donors that donated in a specific time period but one of your data entry volunteers entered 21st January, 2025 for several records instead of formatting it under “dd/mm/yyyy” as 21/01/2025, you will not be able to see them in your report.

Even after the data is entered, if it is not locked, it only takes a slip of the hand to accidentally delete or overwrite information without noticing and auto-save over it because there are no 

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Keeping Track

Are you able to keep track of whether a receipt has been sent or not? If you don’t have a system you may issue receipts twice or forget to issue them at all with staff turnover. Neither of these scenarios are ideal. 

Make sure you have a field that confirms whether or not it was sent, the date it was issued and a place where you can retrieve the receipt. This will come in handy if a donor comes back with an inquiry, which they inevitably do, often close to the recommended tax filing deadline!

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Collaboration Issues

Our 2022 Giving Report found that 90% of Canada’s 86,000 charities are small operations, meaning they employ less than 10 full-time staff. Many therefore, rely on staff wearing multiple hats and addressing donor inquiries on the fly, even if that is not their role.

If you are working on several static documents that are on your local network or even worse, on individual computers, you may find it difficult to manage your donors and know whether receipts have been issued. You could end up handling multiple versions of the same records and cause reconcilement issues at a later date. The alternative of not responding to donor inquiries promptly is also not ideal. 

A step up from static Excel documents are cloud based productivity tools - this should be one of the key digital tools for charities. Both Google and Microsoft offer discounts or free licenses for charities which allows collaboration in real-time.

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Cost Prohibitive

On the financial side, sending donation receipts manually as many charities do is costly. There is the tangible cost to print, purchase envelopes and pay for postage, a process that can also be disrupted by unstable delivery services such as postal strikes and supply chain issues. Many charities experienced this first-hand during the Canada Post Strike where it is estimated Canadian charities missed out on $266 million in lost donations. Although the federal government chose to extend the 2024 tax deadline, it is clear that diversification of fundraising and ownership of your donor data is key to ensuring reliable funding for your mission.

Sending receipts by mail also becomes increasingly costly as your charity hopefully grows and scales. It may be a stop-gap but is it sustainable for your charity? Supporters can move without informing your charity and while email addresses can also change, most people do not change email addresses frequently.

Email can be more cost-effective but coordinating tax receipt delivery to supporters is still difficult without some kind of communications or marketing tool.

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Delays in Sending Receipts and Thank You Messages

Working on donation receipts manually, often means you are also sending thank you messages at the same time and batching your work.

However, this can lead to a delay in your thank you message. These two things should be sent separately as thank you messages are best sent immediately following a donation while tax receipts are less time-sensitive and may require a little more vetting. Some charity experts suggest waiting until February/March of the following year to issue tax receipts because some donors may have issues with their donations and canceling a tax receipt is not so easy once you have issued it. 

Whatever approach you take, you should make sure that you are following the cadence that is preferred by your donors and that you are in fact, taking the time to thank them for their donation!

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Issuing Aggregate Receipts

Sometimes donors give multiple times in a year. Monthly giving is a rising trend among Canadian donors with the value of monthly donations on the CanadaHelps platform growing by 11% in 2023 despite an affordability crisis (The Giving Report, 2024). This is great news for charities as it provides sustainable funding that can help you plan ahead and also, more deeply engage with your donors. However, this can add administrative complexity as some donors that give multiple times a year may want just one aggregated receipt at the end of the year for their taxes. This can be difficult, if not impossible when done manually.

Issuing aggregate tax receipts would involve compiling a list of all donations made by the donor each year, including the date, amount and benefits received. In the cases charities can offer them they take a significant amount of time to manage and there is a high risk for manual error.

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Storage Issues & Difficulty of Finding Past Receipts

Receipts must be kept for a minimum of 2 years from the end of the calendar year in which the donations were made. However, it is prudent to keep them for up to 6 years from the end of the last tax year they relate to.

If you’re using receipt books and storing receipts in paper form, they need to be stored securely in a locked cabinet or drawer. Physical copies take up space, can be easily damaged and require extra work if you need to scan receipts. Choosing to store them physically also limits your staff from working collaboratively or remotely. 

And, while storing your receipts is one thing, being able to track down the receipt you need when one needs to be reissued is another.

Ok, so you read to the end and are still looking for a measurable “cost” of manually tax receipting? The answer definitely depends on several factors but here’s a rough calculation of how much money and time it could be costing your organization.

‍Staff Time

To gather the required information, check compliance, manually enter data, verify and authorize the donation receipt and store the information, it is reasonable to estimate that manually preparing a single donation receipt would take between 5-15 minutes depending on the charity’s process and the staff member’s experience. 

‍Monetary Cost

Roughly, the cost to print and mail each donation receipt would be $1.34 - $1.49. (assuming the donation receipt is printed in black and white $0.10 - $0.25 and postage costs $1.24). 

We can also factor in the average base salary of a fundraiser in Canada which is $21.57/hour (as of February 17, 2025 according to Indeed).

However, there are also additional costs for storage, retrieval and reissuing beyond the initial cost of sending the receipt. Most of all, there are lost opportunities as your resources are directed into this time intensive solution rather than your mission, programs, and stewarding donors.

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Software that is purpose-built for charities, helps you with all of the above -  so you’re not having to constantly cross-reference and copy data from sheets to templates. It allows you to centralize your donor information into one place so you can work collaboratively with your team to:

• Issue One-Time or Aggregate Tax Receipts with the click of a button
• Send personalized and branded CRA compliant Tax Receipts 
• Send Tax Receipts by Email or Generate them for Mail
• Track which donations have been receipted and which have not
• Send an additional thank you message as part of generating your tax receipt
• Void and resend receipts with the click of a button
• Find all of your receipt data stored on secure cloud servers, hosted in Canada