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  • Writer's pictureSebastian Elawny

Fundraising Strategies for Canadian Charities

Updated: Jul 4


someone putting coins in a jar to signify fundraising efforts by charities and non-profits

In many cases, the charitable sector relies on donations from the public for sustainability, and the Canada Revenue Agency (CRA) recognize this. In Canada, all charities must be registered under the Income Tax Act, which requires that all purposes and activities of the organization be exclusively charitable. While the CRA does not consider fundraising itself to be a charitable activity, it acknowledges that fundraising is necessary for charities to ensure they have the means required to carry out their charitable activities. Therefore, charities are permitted to fundraise. However, they must obey certain rules and maintain transparency. 


Fundraising and the legal parameters around it 

Fundraising is the solicitation of donations, which can be received through cash donations or non-cash gifts. This can include funds raised through the sale of goods and services when those sales generate net revenue. Acceptable fundraising activities can include direct activities, and indirect or related activities. 


Direct activities include: 


  • Going door to door, telemarketing, and direct mail, 

  • Internet or media campaigns, 

  • Advertisements or publications, 

  • Events, 

  • Sales of goods or services, 

  • Donor stewardship, and membership or corporate sponsorship programs. 


Indirect or related activities include: 


  • Researching and developing fundraising strategies and plans, 

  • Researching prospective donors, 

  • Recruiting and training development officers, 

  • Hiring fundraisers, 

  • Donor recognition programs. 


While registered charities can fundraise, fundraising cannot itself be a charitable purpose; it is merely an activity that can enable a registered charity to pursue its charitable purposes. 

A charity that undertakes fundraising must follow the CRA’s guidelines. This means that it may not undertake fundraising activities that: 


  • provide a private benefit to any person who is not a charitable beneficiary; 

  • is conducted in a way that is illegal or contrary to public policy; 

  • is deceptive; or 

  • is for an “unrelated business”, meaning a business activity that is not either (a) run by volunteers, or (b) subordinate to the charity’s charitable purposes. 


If a registered charity conducts its fundraising in an unacceptable manner, they may be liable to sanctions or could have their registration revoked. Therefore, it is important that registered charities understand these legal parameters and set their fundraising activities up in a way that aligns with the CRA guidelines. For further information on unacceptable activities, visit the CRA website here


Organizations hoping to obtain charitable status must outline their fundraising strategies while preparing their application. Proper planning during the organization stage of an application allows charities to choose strategies suited to their purposes. In most cases, it is advisable to seek legal counsel to ensure applications meet all requirements and that the fundraising activities chosen will effectively further the charity's purpose. 


Best fundraising strategies for Canadian Charities 

Effective fundraising starts with effective planning. In the charitable sector, fundraising should only be conducted if the funds are necessary to fulfill the charity's purpose. So, knowing your organization's funding needs, and planning how it will raise funds, is the place to start your planning. Having clear direction allows each charity to utilize strategies that will effectively further their purposes, without conflicting with the CRA guidelines. 

Fundraising can be done through many means; some specific examples include: 


  • Hosting a gala, 

  • Prize raffles, 

  • Bottle drives, 

  • Movie nights, 

  • Silent auctions or virtual auctions, 

  • Holding a food, clothing, or book drive, 

  • Conducting door to door canvassing, 

  • Runs and walks, 

  • Shows and tournaments, 

  • Themed celebrations. 


Additionally, it can be beneficial for organizations to get creative with their fundraising activities. For example, hosting holiday themed fundraisers can help get people excited about your charitable purpose and increase the support received. 


Conclusion 

There are important guidelines that must be followed when conducting fundraising in the charity sector. Registered charities, or those seeking charitable status, must ensure they have planned their fundraising activities accordingly to make sure they do not conflict with the CRA guidelines. It is also important that the fundraising activities align with the charity's purpose and do not provide a private benefit to third parties. Fundraising also must be done through legal means and cannot be conducted in a deceitful manner. 


At Outsiders Law, we have extensive knowledge of the charity application process. We help organizations properly develop their fundraising, marketing, and promotions strategies to ensure each application has the highest chance of success. Book a consultation with one of our lawyers or give our firm a call! We will be happy to discuss your charitable endeavors and see how we can help. 


Disclaimer

The information provided in this article is for educational purposes only. Nothing contained herein should be considered as legal, professional, or tax advice. Please contact us directly if you require legal assistance.

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