F23. We don't want to jeopardize our registered charity status. How do I determine if our charity is spending too much on fundraising?

F23. We don't want to jeopardize our registered charity status. How do I determine if our charity is spending too much on fundraising?


Short answer

Anything you spend on fundraising-both direct expenditures and amounts spent or held by another party to do fundraising on your behalf-must be tracked and reported on your annual T3010B filing.

At the end of each fiscal year, you need to calculate your disbursement quota (see F15) to know how much must be spent on charitable activities. In the coming year, you need to spend at least 80 per cent of receipted donations on your charitable purpose, leaving no more than 20 per cent for fundraising and administrative and other purposes.

Long answer

Registered charities should regularly review their fundraising activities and the associated costs in relation to their other activities and costs. When amounts spent on fundraising become disproportionate or unreasonable compared to the charity's other work, there is a risk that the registered charity is not satisfying its regulatory obligations.

The CRA watches for two ways that a charity may not be properly focused: if the charity appears to be spending too much time or too much money on fundraising. Fundraising must not be the centre of attention of the charity nor should a charity's time, effort, and other resources be devoted to fundraising rather than to carrying out its charitable purpose.