CRA released a letter which discusses whether an organization that is exempt from income tax can receive donations from its members and businesses affiliated with its members to fund a capital project. CRA ruled that this was acceptable provided that the capital project is funded with member contributions and gifts. An increase in services to its members will not indicate that income has been made available to its members if the donation is made through a member contribution or gift.
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.