Fundraising Ratios

Introduction

This module identifies the ratio of fundraising costs to fundraising revenue as stated in the CRA Guidance.

This ratio is one of the factors that the CRA will look at in assessing a charity’s compliance with the CRA guidelines.

Other Factors

Other factors that the CRA considers are:

Ratios

If the ratio of its fundraising costs to its fundraising revenue is:

Note that these fundraising ratios aren’t sufficient by themselves to determine whether a charity complies with the requirements of the Act. They provide a way to generally gauge a charity’s fundraising performance and understand the circumstances when the CRA is likely be to be concerned.

For more information, see Guidance CG-013, Fundraising by registered charities.

Size of Charity

The CRA will look at the size of a registered charity to determine whether its fundraising costs are reasonable.

and

Causes with Limited Appeal

For registered charities working on causes that have limited appeal, the CRA may be prepared to accept higher fundraising costs as long as:

Note: Charities working on causes with limited appeal may include those charities researching relatively unknown diseases or those working with causes that are less popular with the public.

Donor Acquisition & Planned Giving Campaigns

Donor acquisition and development and planned giving campaigns are longer-term strategies. They generally do not produce major results in the year the expenses are incurred. So, the CRA may be prepared to consider higher fundraising costs in the initial years of these activities.

The charity needs to show that it is using the recommended best practices for fundraising to control and reduce costs.

The CRA does expect the costs of donor development to decline over time as the donor base and fundraising activity become more established.

Notice

Information in this module is provided for general educational purposes and not as legal or accounting advice. Consult a lawyer or accountant for professional advice.

Information is accurate as of 2019.

For changes after this date, consult Canada Revenue Agency.