How Can Registered Charities Safely Navigate Fundraising Activities? A Guide to Compliance and Best Practices.

Fundraising is an essential aspect of sustaining the charitable endeavors of registered charities. However, the Canada Revenue Agency (CRA) emphasizes the importance of conducting fundraising activities in a reasonable manner to ensure that the primary focus remains on charitable purposes. In this blog post, we will explore the key considerations and guidelines provided by the CRA regarding fundraising activities and delve into the specifics of engaging in lotteries, bingos, charity casinos, and similar initiatives.

Fundraising and Charitable Activities
While fundraising is a necessary component of a charity's financial strategy, the CRA is clear that it should not become the primary emphasis of the charity. The essence of a registered charity lies in its commitment to exclusively charitable purposes. If fundraising activities take precedence over these purposes or a substantial portion of revenue is directed towards them, the charity risks jeopardizing its registered status.

The CRA's Expectations
The CRA acknowledges that charities may incur costs in their fundraising efforts, but these expenses must be reasonable. Excessive spending on fundraising could lead to a failure to meet the disbursement quota, the mandatory spending requirement for registered charities. Therefore, it is crucial for charities to strike a balance, ensuring that fundraising activities complement their charitable objectives rather than overshadowing them.

Guidance for Fundraising Activities
For comprehensive information on fundraising activities, registered charities are encouraged to refer to Guidance CG-013, Fundraising by registered charities. This resource provides valuable insights into best practices, ensuring that charities are well-informed and equipped to navigate the complexities of fundraising within the confines of their registered status.

Lotteries, Bingos, Charity Casinos, and More
In addition to traditional fundraising methods, charities may opt to raise funds through lotteries, bingos, charity casinos, and similar activities. However, there are additional considerations to bear in mind. Charities must reach out to relevant provincial, territorial, and municipal government departments before engaging in these initiatives to obtain any necessary permissions, permits, or licenses.

Striking a Balance
While these alternative fundraising methods can be lucrative, charities must strike a balance between generating funds and adhering to regulatory requirements. Seeking proper authorization ensures that charities operate within the legal framework, mitigating risks to their registered status.

Fundraising is a vital lifeline for registered charities, but it comes with responsibilities. Striving for a harmonious balance between fundraising activities and charitable purposes is key to maintaining a charity's registered status. By following the guidelines provided by the CRA and seeking the necessary permissions for specific fundraising methods, charities can navigate the complex landscape of fundraising successfully, ensuring the sustainability of their noble causes.