In the fundraising guidance it talks about registered charities cannot have fundraising as a main purpose. Some people are confused by this. What about a hospital foundation, university foundation or other foundatioon that spends almost all of its time fundraising and then gifting over the funds to a Canadian registered charity.
The main purpose of such foundation is to provide funds to another registered charity, not fundraising, even though it may take up almost all the time and efforts of the Parallel Foundation.
CRA’s fundraising guidance provides:
“Registered charities can only raise funds that are necessary to fulfill their mandate. Fundraising activities are sometimes undertaken by registered charities in hopes of generating extra resources, without first determining what charitable work needs to be achieved and what resources are needed to do that work. Foundations are generally established to fund qualified donees, which includes charitable organizations. The Income Tax Act’s definition of charitable purposes includes the disbursement of funds to qualified donees. Thus, whereas charitable organizations engage directly in the delivery of charitable activities, foundations whose purposes include funding qualified donees also engage in charitable activities by disbursing funds to qualified donees. “
To review the CRA Fundraising Guidance see “How do I find the CRA Guidance on Fundraising for Canadian charities?” at
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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.