Hi - I'm in the process of setting up a small business (retail, predominantly online) and would like to donate a % of each sale to a registered charity. Are there any pitfalls to keep in mind? How would the donation amount be treated in terms of taxable earnings? Many thanks

donations need to be made to a deductible gift recipient to be claimed as a tax deduction. In general a registered charity means the same as a DGR.
SPONSORSHIP is a different thing....if you are unable to claim a "donation" then perhaps you might be able to become a "sponsor" to the charity, this is a normal business expense and hence deductible.
regards
Brendan