Charitable 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.

The Income Tax Act allows a registered charity to use its resources (funds, personnel, and property) inside or outside Canada in two ways:

1. On its own charitable activities

A charity can carry on its own charitable activities through its staff, including volunteers, directors, and employees, or through an intermediary (for example, a consultant or contractor) acting on its behalf. Whether it works through its own staff or through an intermediary, a charity must direct and control the use of its resources, although it may delegate day-to-day decisions to its intermediary.

Working through intermediaries

When a charity transfers resources to an intermediary to carry on an activity, the charity must direct and control how the resources are used. This means the charity must make decisions and set parameters on significant issues and it must maintain books and records to show this.

For more information on working with intermediaries, see Guidance CG-002, Canadian registered charities carrying on activities outside Canada and Guidance CG-004, Using an intermediary to carry on a charity’s activities within Canada.

2. On making gifts to qualified donees

In addition to carrying on its own activities, a charity can make gifts to qualified donees (usually other registered charities). For more information, see Guidance CG-010, Qualified donees.

To verify that an organization is a registered charity, use the "Search" feature on the List of charities web page.

Public policy dialogue and development activities

Charitable activities include public policy dialogue and development activities (PPDDA) that further a charity’s stated charitable purposes. PPDDAs generally involve seeking to influence the laws, policies, or decision of a government, whether in Canada or a foreign country.

As long as a charity’s PPDDAs are carried on in furtherance of its stated charitable purposes, the Income Tax Act places no limits on the amount of PPDDAs a charity can engage in.

For more information, see Guidance CG-027, Public policy dialogue and development activities.

Registered charities during an election period: election advertising and third party registration with Elections Canada

General guidelines

The Income Tax Act allows registered charities to fully engage in public policy dialogue and development activities that further their stated charitable purposes and provide a public benefit.

However, it prohibits registered charities from devoting any part of their resources to the direct or indirect support of, or opposition to, any political party or candidate for public office (see Guidance CG-027, Public policy dialogue and development activities by charities).

These Income Tax Act measures apply to registered charities at all times. Other legislation, such as the Canada Elections Act, may also apply to registered charities.

Canada Elections Act

Election advertising is a regulated activity under the Canada Elections Act.

Election advertising is an advertisement transmitted during an election period that promotes or opposes a registered party or candidate, including by taking a position on an issue clearly associated with a registered party or candidate. The election period starts on the day the election is called, and it ends when the polls close on election day.

Registered charities or other organizations that spend $500 or more on election advertising during an election period must register as third parties with Elections Canada. Third parties under the Canada Elections Act are subject to spending limits and reporting requirements.

Income Tax Act and registering as a third party

Under the Income Tax Act, registered charities may carry out election advertising activities that focuses on policy issues associated with a political party or candidate, as long as they do not explicitly support or oppose the political party or candidate.

Registered charities will not put their charitable status at risk merely by registering as third parties with Elections Canada.

More information

For more information on the requirements of the Canada Elections Act or the third party registration, including information on other regulated activities, see the Political Financing Handbook for Third Parties, Financial Agents and Auditors or call Elections Canada’s Political Entities Support Network at 1-800-486-6563.

For questions about public policy dialogue and development activities of charities, contact the Charities Directorate.

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