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Canada Revenue Agency Releases the New Guidance, CPS-028 Fundraising by Registered Charities

June 23, 2009

Canada Revenue Agency (CRA) has released the new guidance on charitable fundraising.  Although formerly known as "policy," CRA will now refer to administrative development as "guidance."  The final version of CPS-028, Fundraising by Registered Charities, is very much as anticipated.  The new guidance will apply to every charity registered in Canada.  The guidance defines fundraising as any activity involving a solicitation of support.  A solicitation of support is a statement or representation made for the purpose of seeking cash or in-kind donations whether or not receipts are issued.  CRA has included an evaluation grid which will be used to assess the annual fundraising performance of each charity.  The grid compares fundraising expenditure as a percentage of fundraising revenue:
  • Under 35%    This level is unlikely to generate questions or concerns.
  • 35 to 70%    CRA will examine the average ratio in recent years to determine if there is a trend toward high fundraising costs.  The higher the ratio, the more likely are the concerns.
  • Above 70%    This level will raise concerns and is rarely acceptable.  The charity must be able to provide an explanation and rationale for this level of expenditure to show compliance.
A comprehensive review of CPS-028 will be included in the next issue of the CCCC Bulletin.  To access the guidance, go to: http://www.cra-arc.gc.ca/tx/chrts/plcy/cps/cps-028-eng.html.
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