F3. We’re a newly organized registered charity. We heard that there are tax requirements for fundraising. What do we need to know about fundraising?

F3. We’re a newly organized registered charity. We heard that under the Income Tax Act there are certain requirements that apply to our fundraising. What do we need to know about fundraising?


Short answer

Two things must be remembered to keep your registered charity’s status:

1. fundraising must not be your primary activity

and

2. you must devote certain portions of your resources to charitable programs or services (including gifts to qualified donees) rather than fundraising expenditures.

While the Canada Revenue Agency accepts that you will encounter costs in your efforts to raise funds for your charitable purpose, it expects that these expenses will be reasonable.

Long answer

When you registered your charity, you declared your charitable purpose. That purpose must always be the focus of your time and resources.
The CRA does not view fundraising as a charitable activity. Spending excessive amounts on fundraising could also result in the charity not meeting its disbursement quota (DQ), that is, its spending requirement.

More…

For further discussion on fundraising, see the checklist of allowable activities .
See guidelines for fundraising events and charitable activities at General guidelines for issuing receipts applicable to all fundraising events or activities