F20. Why does a charity have to make a distinction between its fundraising activities and its charitable program activities?
A charity is constituted to pursue certain charitable objectives. These may include: to relieve poverty; to advance education; to advance religion; or to benefit the community (as defined by the courts). Fundraising activity is usually necessary to finance such charitable objectives. Fundraising is allowed as long as it complies with the CRA’s guidelines. CRA guidelines were developed to help charity’s understand what fundraising conduct is permissible and what is impermissible. Broadly, CRA wants to ensure that the charity is spending substantially all its resources on programming, rather than administration and/or fundraising.
Registered Charities are required to report fundraising expenses separately from charitable program and other expenses on its annual T3010 form. In order to do so, what constitutes fundraising activity has to be well-defined, and the expenses associated with such activity have to be distinguishable from other costs.
The Charities File for more information on T3010 form- Info Sheet #1