Can Canadian Charities Operate Outside of Canada?

Canadian charities can operate legally outside of Canada. Thousands of Canadian charities are currently doing just that. Canadian charities can choose from one of three options to execute their charitable activities. 

The first option is to conduct their activities directly. This means that the charity will physically carry out the charitable work, such as building a school or providing medical aid. 

The second option is to send funds or assets to another registered charity, a "Qualified Donee" under the Income Tax Act. This is a standard option for Canadian charities who want to support work in other countries but may need more resources to carry out the work themselves. 

The third option is to use intermediaries, such as agents and partners, to implement the charity's mandate. However, a charity must show "direction and control" over its funds and assets if it uses an agent. It is important to note that Canadian charities cannot send funds to non-charities except in certain agreements that show "direction and control." 

There are generally six types of agreements that a Canadian charity can use to send money to a non-charity: 

1. An Agency Agreement - This type of agreement allows the charity to control how the agent spends the funds. 

2. A Contractor Agreement - This type of agreement is similar to an agency agreement but focuses on specific tasks or deliverables. 

3. A Joint Venture Agreement - This type of agreement is used when two or more organizations come together to achieve a common goal.

4. An Employment Agreement - This type of agreement is used when the charity employs someone to do the charitable work. 

5. A Volunteer Agreement -  This type of agreement is used when individuals volunteer their time to carry out charitable work. 

6. A Cooperative Partnership Agreement: This type of agreement is used when two or more organizations work together to achieve a common goal, with each organization contributing resources.

Canadian charities must carefully consider which option best suits their needs and goals to ensure that their charitable activities are carried out safely and effectively. Regardless of which option they choose, it is clear that Canadian charities can make a positive impact both within and outside of Canada.

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