Engaging in allowable activities
Important notice
On June 23, 2022, Budget Implementation Act, 2022, No. 1, received Royal Assent. This change in legislation includes new rules that allow charities to make grants to non-qualified donees. As a result, some of the information on this page could change.
On December 19, 2023, following a public feedback period, the Canada Revenue Agency (CRA) posted the guidance document CG-032, Registered charities making grants to non-qualified donees. This document explains how the CRA will administer the recent changes to the Income Tax Act.
The CRA is in the process of reviewing and updating all related guidance products and web pages to ensure they are consistent with the new rules.
A registered charity must be created for charitable purposes and must devote its resources (funds, personnel, and property) to charitable activities. A registered charity is permitted to carry out its charitable purposes, both inside and outside Canada, in only two ways: by carrying on its own charitable activities, and by gifting to qualified donees.
Checklist
Is the charity aware of the following requirements:
- Contact the Charities Directorate if the charity plans to engage in new activities that were not identified in its application for registration, to ensure they qualify as charitable.
- If working through intermediaries such as a consultant, a contractor, or any other non-qualified donee, the charity must be able to demonstrate that it retains direction and control over the use of it resources. (For example, the charity could enter into a formal written agreement with the intermediary body.)
- Do not engage in any activities that may directly or indirectly support or facilitate an act of terrorism.
- Do not engage in any activities that support or oppose a political party or candidate for public office.
- Gift only to qualified donees (for example, other registered charities).
- Engage in only related business activities that accomplish or promote the charity's purposes, if the charity is designated as a charitable organization or a public foundation.
- Do not engage in any business activities if the charity is designated as a private foundation.
Related topics
References
- CG-027, Public policy dialogue and development activities by charities
- CPS-019, What is a related business?
- CG-002, Canadian registered charities carrying on activities outside Canada
This checklist is for the charity's use only. Do not mail to the CRA or file with the return.