I believe that even if you call it other income, you would have to back out the HST and record it. i.e. receive a donation for $10,000, you record other income of $8,849.56 and HST of $1,150.44 (assuming a 13% HST rate).
If your client is not a non-profit charitable corporation, then it is just income, like any other income, albeit they have not exchanged a good or a service for that income. They would also have to make it clear to their donors that they are not eligible to give a charitable receipt so the donor will not be able to claim it as a charitable donation.
Try as I might, I can't confirm this anywhere. All I can confirm is that charitable donations are only considered so when giving to a legit non-profit, charitable corporation that can legally issue a charitable receipt. So I am drawing the conclusion that in this situation, the donation received by your client is just income and as such, tax must be remitted.
Just to be sure, I would contact your external accountant and verify.
Obviously, a receipt from the company would have to be issued to the donor as cash received, just for good bookkeeping. But it should be stipulated that this is a non-charitable donation.
