Fundraising 101: Key Insights for Canadian Charities

Canadians donated over $17 billion to registered charities in the most recently reported year — but the rules around how that money is raised matter just as much as the amounts. In 2026, the Canada Revenue Agency (CRA) has introduced several significant changes that affect how charities interact with the Charities Directorate: the fax line for charity submissions has been permanently retired as of April 1, 2026, T3010 online filing is now the expected standard, and the CRA has ended pre-approval reviews for charitable purpose changes. Against this backdrop of increased digitization and heightened compliance scrutiny, Canadian charities need to understand not just the fundamentals of fundraising — but how the rules are being applied right now.

This guide covers everything Canadian charities need to know about fundraising in 2026, from the CRA's definition and cost ratio thresholds to digital fundraising rules and compliance red flags.

What Changed for Canadian Charity Fundraising in 2026

The CRA has made several significant changes to how it administers and oversees registered charities in 2026. While these changes are not limited to fundraising specifically, they affect every charity's compliance infrastructure — including how fundraising revenues and costs are submitted and reviewed.

CRA fax line retired (April 1, 2026)

As of April 1, 2026, the CRA's Charities Directorate fax line is permanently closed. Charities that previously submitted T3010 returns, written inquiries, or supporting documentation by fax must now use My Business Account or other CRA online services. This affects how fundraising cost information is reported and submitted after each fiscal year.

T3010 online filing is now the expected standard

Beginning in 2027, the CRA aims to have all charities and registered national arts service organizations file their T3010 information return online. Charities that have not yet migrated to CRA online services should do so now — before compliance issues arise at filing time. The CRA's Digital Concierge service (available by calling 1-800-267-2384) provides one-on-one support for charities setting up online access.

Enhanced T3010 data fields for Disbursement Quota enforcement

As of 2026, the CRA has introduced enhanced T3010 data fields to more effectively identify foundations that are consistently under-disbursing the required 5% of investment assets. While this primarily affects private foundations, it signals the CRA's broader direction: more data, more scrutiny, and less tolerance for inconsistent T3010 reporting. Charities of all types should ensure their fundraising revenues and expenditures are recorded accurately and consistently year over year.

Charitable sector framework modernization announced

On April 28, 2026, the Minister of Finance and National Revenue presented the Canada Strong for All — Spring Economic Update 2026, which announced the government's intention to modernize the framework for the charitable sector in 2026-2027, including leveraging advances in technology and digitization. The full implications of this modernization for fundraising compliance are still developing. B.I.G. Charity Law Group will continue to monitor and report on changes as they are released.

No more CRA pre-approval for purpose changes

Effective early 2026, the CRA no longer pre-approves changes to a charity's purposes or activities. Charities are now solely responsible for ensuring that any updated purposes remain exclusively charitable under Canadian law. If your charity is planning a new fundraising program that falls outside your current registered purposes, you cannot obtain CRA sign-off in advance — making legal review of your proposed changes more important than ever before launching the campaign.

What Is Fundraising?

At its core, fundraising means raising money to support a charitable cause or mission. It could involve asking individuals, businesses, or governments to donate, or organizing events or campaigns to generate funds.

In simple terms, what is the meaning of raise funds? It means collecting money to support a goal—in this case, helping a cause that matters.

Fundraising can include:

• Writing donation appeals
• Hosting events like walk-a-thons or silent auctions
• Applying for grants
• Selling merchandise
• Running digital campaigns

What Qualifies as Fundraising?

At its core, fundraising involves asking individuals or organizations for financial support. The CRA's definition casts a wide net, covering various direct and indirect activities.

For instance, a direct fundraising effort might involve volunteers going door-to-door in a neighbourhood and asking residents for donations.

Conversely, an indirect activity could include the research and planning that precedes such a campaign, like analyzing neighbourhood demographics to target the most promising areas.

Even though planning doesn't directly generate funds, it's a crucial part of the fundraising process, highlighting the interconnected nature of fundraising activities.

Each step, from planning to execution, plays a vital role in the fundraising campaign's success, underscoring the charity's unity and collaboration.

The CRA's Position on Fundraising

One of the challenges of fundraising for charities is the lack of clear guidelines in the Income Tax Act about what activities are allowed.

While the Act doesn't list specific fundraising activities, it does impose restrictions on how charities can utilize their resources. Charities must adhere to these regulations when conducting fundraising efforts.

The CRA's guidance clarifies compliance, emphasizing that all fundraising activities must align with the requirements outlined in the Income Tax Act. This ensures that charities maintain accountability and transparency in their fundraising practices.

What Does NOT Count as Fundraising Under the CRA?

Understanding what falls outside the CRA's fundraising definition matters just as much as knowing what's included. Several revenue streams are not classified as fundraising and are therefore reported differently on your T3010 return.

The following are generally not considered fundraising under CRA guidance:

Misclassifying these revenue streams as fundraising — or vice versa — is a common T3010 reporting error that can attract CRA scrutiny. If you are unsure how to categorize a specific revenue source, consult a charity lawyer before filing.

Key Messages from the CRA Guidance

The CRA guidance on fundraising highlights several important points for charities:

1. Compliance with the Income Tax Act: Charities must ensure that their use of resources in fundraising activities adheres to the regulations outlined in the Act.
2. Identifying Unacceptable Fundraising Practices: Section F of the guidance details ways charities can inadvertently violate the Income Tax Act through fundraising efforts. Section G outlines indicators of unacceptable practices.
3. Reporting Requirements: Appendix B provides guidance on reporting fundraising costs on Form T3010, the Registered Charity Information Return. Accurate reporting is essential for maintaining transparency and compliance.
4. Best Practices: Appendix C suggests best practices for charities to minimize the risk of engaging in unacceptable fundraising activities. While these practices are recommendations rather than strict requirements, they can significantly enhance a charity's fundraising strategy.

CRA Fundraising Cost Ratios: What Thresholds Matter?

One of the most practical compliance questions Canadian charities ask is: how much is too much to spend on fundraising? The CRA evaluates fundraising cost ratios when reviewing your T3010 return and may investigate if your ratio raises concerns.

Your fundraising cost ratio is calculated by dividing your total fundraising costs by your total fundraising revenue. The CRA uses general thresholds as follows:

Important: These thresholds are not absolute rules. The CRA considers context, including:

• Stage of development: Newer charities often have higher costs in early fundraising years as they build their donor base. This is generally understood by CRA if documented.
• Fundraising method: Some methods, such as direct mail acquisition campaigns, inherently carry higher costs than renewal campaigns.
• Charity size: Smaller charities may face proportionally higher costs for the same activities.

The ratio alone will not determine CRA's response. What matters is whether your charity can demonstrate that its fundraising activities are appropriate, cost-effective over time, and aligned with its charitable purposes.

If your ratio is above 35%, document the reasons clearly and be prepared to explain them if CRA makes an enquiry following your T3010 filing.

What If Your Charity Relies Heavily on Volunteers?

A purely financial review of a charity's fundraising cost ratio can misrepresent reality for organizations that depend heavily on volunteer labour rather than paid staff. The CRA acknowledges this limitation.

If your charity uses volunteers extensively in its fundraising activities — for example, volunteers who coordinate fundraising events, make personal solicitation calls, or run donation tables — the dollar costs reported on your T3010 may appear low relative to your actual organizational capacity. This is generally acceptable, provided you document your volunteer contributions.

Best practice is to maintain records of:

• The number of volunteers involved in fundraising activities
• The hours contributed by those volunteers
• The specific tasks performed

This documentation supports your T3010 filings and demonstrates to the CRA that your charity is actively fundraising even if the reported dollar costs are modest.

Conversely, if a significant portion of your paid staff time is spent on fundraising, that cost should be allocated and reported as a fundraising expense on your T3010 — even if those staff members also carry out program-related work. Pro-rating is acceptable, but must be done on a reasonable and consistent basis year over year.

What Is the Main Purpose of Fundraising?

The main purpose of fundraising is to help your charity continue doing its work. Most charities rely on fundraising to pay for services, staff, programs, supplies, and outreach. Without fundraising, many charities would not survive.

But it's not just about money; fundraising also spreads awareness, builds a community of supporters, and gets people involved.

What Is a Fundraising Campaign?

A fundraising campaign is a focused effort to raise money for a specific goal over a certain period of time. Think of it like a mission with a clear target.

For example:

• A campaign to raise $50,000 for new school computers
• A holiday food drive to collect donations before December 31
• A month-long challenge where supporters donate for every kilometre walked

Good campaigns include a clear message, a plan to reach donors, and updates along the way.

Tips for a Strong Campaign:

• Set a clear goal
• Share a compelling story
• Use social media, email, and community events
• Thank donors publicly and privately

What Is Peer-to-Peer Fundraising?

Peer-to-peer fundraising (sometimes called P2P) is when your supporters raise money for your cause by asking their friends, family, or coworkers to donate.

Example: A student runs a 5K and asks people to sponsor them by donating to your charity. That student becomes a mini-ambassador for your cause.

So, what is peer to peer fundraising? It’s when your community helps you fundraise by reaching out to their networks. It’s powerful because it spreads your message further and builds trust—people are more likely to give when someone they know asks.

Digital and Online Fundraising Rules for Canadian Charities in 2026

Most Canadian charities now raise a significant portion of their funds online. While digital fundraising opens up a wider donor base, it also comes with CRA compliance obligations that many charities overlook.

Fundraising Platforms (CanadaHelps and Similar)

Platforms like CanadaHelps are popular because they handle receipting on behalf of charities. When a donor gives through CanadaHelps, CanadaHelps issues the official donation receipt — not the charity directly. This is CRA-compliant but means the charity receives net funds after the platform fee. Charities should confirm any platform they use is set up to issue CRA-compliant receipts before running a campaign.

Social Media Fundraising Tools

Facebook Fundraisers and Instagram donation stickers route donations through Meta's payment systems. Official CRA-compliant donation receipts are generally not issued through these tools. Donors who give through Facebook Fundraisers for Canadian charities typically do not receive a receipt they can use for their tax return. This is an important disclosure to make to potential donors before they give.

E-Transfer Donations

Charities can accept donations by e-transfer. Once received, the charity must issue an official donation receipt if the gift meets the threshold. The receipt must include all required CRA information regardless of how the gift was received.

Cryptocurrency Donations

The CRA treats cryptocurrency as a commodity, not currency. A donation of cryptocurrency is treated as a disposition of property. The charity should issue a receipt for the fair market value of the cryptocurrency at the time of the gift. Charities accepting crypto should have a clear policy and should convert to Canadian dollars promptly.

Electronic Official Donation Receipts

The CRA accepts official donation receipts issued by email or through a donor portal. Electronic receipts must contain the same required information as paper receipts, including:

• The charity's legal name and CRA registration number
• The date the donation was received
• The amount of the gift (or a description and fair market value for non-cash gifts)
• A statement that it is an official receipt for income tax purposes
• The name and address of the donor

Third-Party Fundraising Platforms

Before using any third-party platform to fundraise, verify the following:

• Does the platform issue CRA-compliant receipts?
• Who retains donor data — the platform or your charity?
• What fees are charged, and how does this affect your fundraising cost ratio?
• Does the platform's agreement expose your charity to any liability?

If the platform controls receipting, confirm this arrangement is reflected correctly in your T3010 reporting.

AI-Powered Fundraising Tools: CRA Considerations

Canadian charities are increasingly using AI-powered tools for donor outreach, campaign personalization, and fundraising automation. These tools do not change a charity's CRA obligations, but they do introduce compliance considerations that boards and executive directors should be aware of.

If an AI tool generates donor solicitation materials, those materials must still meet CRA's accuracy and truthfulness standards. Automated solicitations that misrepresent the charity's purposes, the use of funds, or the impact of donations are subject to the same compliance risks as manually produced materials — the fact that a communication was AI-generated is not a defence.

If AI tools collect or process donor personal information, PIPEDA and applicable provincial privacy legislation apply. Charities should review their data handling practices when implementing any new donor-facing technology, and should ensure that donor consent is obtained and documented appropriately.

What Is a Case for Support in Fundraising?

Your case for support is one of the most important tools in fundraising. It’s the main message you use to show potential donors:

• What your organization does
• Why it matters
• What impact will a donation make
• Why you need funds now

A strong case for support makes people want to give. It should be emotional, clear, and honest.

What is a case for support in fundraising? It’s the “why” behind your ask. It gives donors the information and inspiration they need to take action.

What Is Stewardship in Fundraising?

Stewardship is how you take care of your donors after they give. It includes:

• Saying thank you promptly
• Sending updates on how their gift is being used
• Inviting them to events or volunteer opportunities
• Making them feel part of the mission

What is stewardship in fundraising? It’s the ongoing relationship with donors, showing them their gifts matter. Good stewardship builds loyalty and increases the chances that they will give again.

Unacceptable Fundraising Practices: What the CRA Flags

The CRA's fundraising guidance (Sections F and G) identifies specific practices that can put a charity's registration at risk. Many of these violations happen unintentionally, particularly in charities that use third-party fundraising firms or run high-volume campaigns.

The CRA considers the following to be indicators of unacceptable fundraising:

1. Fundraising that primarily benefits the fundraiser. If a professional fundraiser retains the majority of funds raised — or if the arrangement is structured so that little net revenue reaches the charity — this is a red flag. The CRA may view this as using charitable resources for a non-charitable purpose.

2. Misleading or deceptive representations. Fundraising materials must be truthful. Overstating the impact of donations, misrepresenting how funds will be used, or implying CRA endorsement are all problematic.

3. Coercive or high-pressure tactics. Aggressive solicitation, particularly targeting vulnerable donors, is considered unacceptable and may also attract scrutiny from provincial consumer protection authorities.

4. Using charitable resources for non-charitable fundraising If a charity's staff time, property, or other resources are used to fundraise for activities that do not further the charity's purposes, this violates the requirement that all charitable resources be used for charitable activities.

5. Acting as a conduit. If a charity raises funds through fundraising campaigns but simply passes the money to another organization without actually directing or controlling how it is used, CRA may treat this as an improper conduit arrangement.

Consequences of unacceptable fundraising practices can include CRA compliance action, mandatory repayment of tax advantages, suspension of receipting privileges, or — in serious cases — revocation of charitable status.

If you are unsure whether a planned fundraising activity or a contract with a professional fundraiser meets CRA's standards, seek legal advice before proceeding.

Provincial Fundraising Rules: What Canadian Charities Also Need to Know

CRA's fundraising guidance applies at the federal level, but several provinces have their own rules around charitable solicitation that registered charities must also follow. Federal charitable registration does not exempt your charity from provincial requirements.

Ontario

Ontario's Charities Accounting Act governs charitable fundraising in the province. Ontario requires charities to ensure that fundraising arrangements — particularly those involving professional fundraisers — are structured so that a reasonable portion of funds raised reaches the charity. Fundraising agreements with external firms may need to be reviewed against Ontario's standards as well as CRA's guidance.

British Columbia

BC does not currently have a separate charitable solicitation registration regime, but the Society Act and general consumer protection legislation may apply to fundraising activities in the province. Charities incorporated in BC should also ensure their fundraising activities align with their stated purposes under their constitution.

Quebec

Quebec has distinct rules under the Act respecting fundraising (Loi sur les entreprises de collecte de fonds), which requires certain organizations conducting fundraising activities in Quebec to comply with specific provincial standards. Charities operating nationally should confirm their Quebec fundraising activities are reviewed for provincial compliance.

Across all provinces

Regardless of province, consumer protection legislation generally applies to fundraising solicitations. High-pressure tactics, misleading representations, or deceptive practices can attract provincial regulatory scrutiny in addition to CRA compliance action.

If your charity fundraises in multiple provinces or uses national campaigns, legal review of both federal CRA obligations and relevant provincial rules is strongly recommended before launching.

What Makes Fundraising in Canada Unique?

Fundraising in Canada comes with responsibilities. Unlike some other countries, registered charities in Canada must follow CRA rules closely. Some unique points include:

• Tax receipting: Only registered charities can issue official donation receipts for tax purposes.
• Transparency: CRA may review your fundraising spending, especially if your costs are high.
• Public trust: Canadians expect honesty and accountability. Being open about how donations are used builds long-term trust.

Best Practices for Successful Fundraising

1. Start with a plan: Don’t wing it. Set goals, budgets, and timelines.
2. Know your audience: Speak directly to the people most likely to care.
3. Tell a good story: Use emotion and real examples to connect.
4. Make it easy to give: Offer online donation options and clear instructions.
5. Track everything: Use spreadsheets or software to stay organized.
6. Say thank you: This is a must. Every donor should feel appreciated.
7. Follow up: Share results and updates so people know their gift made a difference.

Fundraising Compliance Checklist for Canadian Charities (2026)

Use this checklist before launching any fundraising campaign or filing your annual T3010 return:

1. ☐ Are all fundraising activities aligned with your registered charitable purposes?
2. ☐ Is your fundraising cost ratio below 35%? If not, can you document the reasons?
3. ☐ Are you issuing official donation receipts with all required CRA information?
4. ☐ Are fundraising costs reported separately and accurately on your T3010 return?
5. ☐ Have you reviewed and documented any contracts with third-party professional fundraisers?
6. ☐ Are your digital fundraising platforms issuing CRA-compliant receipts?
7. ☐ Do all fundraising materials make truthful and accurate representations to donors?
8. ☐ Have you assessed whether any peer-to-peer or social media campaigns create receipting gaps?
9. ☐ Are donations of non-cash gifts (including crypto) being receipted at fair market value?
10. ☐ Is your board reviewing fundraising activity and costs at least annually?

If you answered "no" or "unsure" to any of the above, consult a charity lawyer before your next campaign or filing deadline.

Summary

Fundraising is essential for Canadian charities — but doing it right under CRA rules requires more than just raising money. From understanding which activities qualify as fundraising to managing cost ratios, avoiding unacceptable practices, and navigating digital platforms, compliance must be part of every fundraising decision your organization makes.

In 2026, the stakes are higher as CRA continues to apply increased scrutiny to charity compliance and T3010 reporting. Charities that stay informed, document their decisions, and seek legal advice when needed are best positioned to fundraise sustainably and maintain their registered status.

If your charity has questions about its fundraising practices or CRA obligations, B.I.G. Charity Law Group is here to help.

Frequently Asked Questions About Fundraising for Canadian Charities

Can a Canadian charity pay a fundraiser a commission?

The CRA strongly discourages commission-based compensation for professional fundraisers. While it is not absolutely prohibited, arrangements where a fundraiser is paid a percentage of funds raised are considered a red flag and may indicate that the fundraising primarily benefits the fundraiser rather than the charity. Fixed-fee arrangements are preferred and carry far less compliance risk.

What is the difference between a fundraising expense and a program expense?

A fundraising expense is a cost incurred to solicit donations or generate fundraising revenue — such as printing appeal letters, running a fundraising gala, or paying a fundraising consultant. A program expense is a cost incurred to actually carry out your charitable activities. The distinction matters because they are reported in different sections of the T3010, and misclassifying program costs as fundraising costs (or vice versa) can distort your reported fundraising cost ratio.

Does a charity need CRA approval before launching a fundraising campaign?

No. Registered charities do not need prior CRA approval to run a fundraising campaign. However, the campaign must comply with CRA's fundraising guidance, and any revenues and costs must be accurately reported on your T3010 return. Some provinces also have their own rules around charitable solicitation — Ontario, for example, has requirements under the Charities Accounting Act.

What must be included on an official donation receipt in Canada?

A CRA-compliant official donation receipt must include: a statement that it is an official receipt for income tax purposes; the charity's full legal name and CRA registration number; the receipt's serial number; the place and date of issue; the date the donation was received; the donor's full name and address; and the eligible amount of the gift. For non-cash gifts, the receipt must include a brief description of the property and its fair market value. Missing any of these elements makes the receipt non-compliant.

Can a non-registered organization issue tax receipts for fundraising?

No. Only organizations registered as charities with the CRA are permitted to issue official donation receipts for income tax purposes. Non-registered nonprofits, community groups, and social enterprises cannot issue charitable tax receipts, even if they carry out activities that benefit the public.

What is the CRA's acceptable fundraising cost ratio for a registered charity?

The CRA does not set a single hard-and-fast threshold, but generally views a fundraising cost ratio below 20% as clearly acceptable. Ratios between 20% and 35% may be acceptable depending on context. Ratios above 35% are likely to attract scrutiny, and ratios above 70% are a strong indicator of unacceptable fundraising. New charities or charities building a new donor base may justify higher ratios in early years if they can document the circumstances.

Can a Canadian charity fundraise outside Canada — including in the United States?

A Canadian registered charity can accept donations from foreign donors, including Americans. However, donations from US-based donors are not eligible for Canadian tax receipts for US tax purposes — those are governed by US law. If your charity wants to issue tax-deductible receipts to American donors, it would need to be registered as a public charity with the IRS or partner with a registered US entity. Cross-border fundraising arrangements have additional legal considerations and should be reviewed by a charity lawyer.

How does a charity report fundraising on its T3010 return?

The T3010 requires charities to report total fundraising revenues and total fundraising expenditures in the financial information section. These figures should reflect only the costs and revenues directly related to soliciting donations, not program costs or general administration. CRA uses these figures to calculate your fundraising cost ratio as part of its compliance review. Accurate, consistent reporting year over year is the best way to avoid triggering a CRA enquiry.

What changed for Canadian charities in 2026 that affects fundraising compliance?

Several significant changes took effect in 2026. As of April 1, 2026, the CRA's Charities Directorate fax line is permanently retired — all submissions, including T3010 returns and written inquiries, must now be made through CRA online services such as My Business Account. The CRA has also ended its pre-approval process for changes to a charity's purposes or activities, meaning charities are now solely responsible for ensuring any updated purposes remain exclusively charitable under Canadian law. Additionally, the CRA has introduced enhanced T3010 data fields to increase enforcement of the 5% Disbursement Quota. None of these changes alter the core rules around fundraising cost ratios or receipt issuance, but they affect how charities interact with the CRA administratively.

Does using AI tools for fundraising affect a charity's CRA compliance obligations?

No, using AI tools does not create new CRA obligations, but it does not remove existing ones either. Any donor solicitation generated using AI must still meet CRA's requirements for truthfulness and accuracy. If AI tools are used to process donor data, PIPEDA and applicable provincial privacy legislation apply. Charities should ensure that automated communications do not misrepresent how funds will be used, overstate impact, or imply CRA endorsement — all of which are unacceptable practices under CRA's fundraising guidance regardless of how the communication was produced.

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