canada revenue agency registered charities

A registered charity that engages in unacceptable fundraising is liable to sanctions or the revocation of its registration.In recent blogs, we’ve noted a growing trend among philanthropists in Canada: greater strategic engagement with the charities and non-profits they support. fundraising initiatives or arrangements that are not well documented Ĭharities that engage in unacceptable fundraising cannot be registered under the Income Tax Act because they are not constituted and operated exclusively for charitable purposes and devoting their resources to charitable activities.misrepresentations in fundraising solicitations or in disclosure about fundraising costs, revenues or practices.commission-based fundraiser remuneration or payment of fundraisers based on the amount or number of donations.activities where most of the gross revenues go to contracted non-charitable parties.sole source or not-at-arm’s length contracts with suppliers or service providers.paying more than fair market value for fundraising merchandise or services, and.purchases of fundraising merchandise or services that do not increase fundraising revenue,.inappropriate purchasing or staffing practices, including:.the charity’s fundraising expenses to fundraising revenue ratio.

fundraising without an identifiable use or need for the proceeds.resources devoted to fundraising relative to resources devoted to charitable programs.When evaluating a charity’s fundraising activities, the CRA will consider a range of indicators and factors, including the following:

delivering a more than incidental private benefit (a benefit that is not necessary, reasonable, or proportionate in relation to the resulting public benefit).

a purpose of the charity (a collateral, non-charitable purpose).

Fundraising is acceptable provided it is not: Although a charity can use some of its resources for fundraising to support the charitable activities that further its charitable purposes, it is the CRA’s position that fundraising is not a charitable purpose in itself or a charitable activity that directly furthers a charitable purpose.Īs a general rule, fundraising is any activity that includes a solicitation of present or future donations of cash or gifts in kind, whether the solicitation is explicit or implied.įundraising by registered charities must be conducted within legal parameters. All charities registered under the Income Tax Act are required by law to devote their resources to exclusively charitable purposes and activities.

Canada revenue agency registered charities