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As many charities begin their final fundraising efforts for the year, please consider the following tips to ensure compliance with the Charitable Fund-raising Act (the “Act”) and the Regulation. The following is a list of reminders when soliciting donations:
- If soliciting donations by telephone, calls can be made to potential donors between the hours of 8:00 am and 9:00 pm.
- If soliciting donations in person, the following information needs to be provided to the potential donor:
- the name of the charitable organization for which the donation is being solicited;
- the charitable purpose for which the donation will be used;
- the charity’s estimated cost for soliciting the donations and the estimated contributions the charity expects to receive as a result of the solicitations;
- the activities directly related to making the solicitations;
- address of the charity and place of incorporation if the charity has been incorporated;
- name of contact person employed by the charity and their contact information; and
- if the charity is using a fund-raising business, the full legal name of the business along with how their remuneration for the fund-raising business is being determined. This may be a percentage of the amount raised by the fund-raising business or a specific dollar amount.
In addition to the above, the charity or fund-raising business also must provide the following if requested by the potential donor:
- a copy of the organization’s most recent financial statement;
- details regarding where and how the donations will be spent; and
- of the gross contributions, the percentage spent on the charitable purpose.
Compliance with the above is very important. Pursuant to this Act, the provincial government may appoint inspectors who have the authority to enter the charity’s or fund-raising business’ premises to ensure the organization is in compliance with the Act and Regulations. Failure to be in compliance could result in the cancellation or suspension of the charitable organization’s registration under the Act or potentially prosecution under the Act.
If a donor requests a receipt, it must be provided to the donor. In addition to the Act, there are specific requirements for charities when issuing receipts to donors. These are set forth in Income Tax Reg. 3501. For specific cash donations, the following needs to be included on the official receipt from the charitable organization:
- a statement that the receipt is an official receipt for income tax purposes;
- the charity’s name and address in Canada as recorded with the Canada Revenue Agency (“CRA”);
- the charity’s registration number assigned by the CRA;
- the unique serial number of the receipt;
- the location where the receipt was issued;
- the day on which or the year during which the donation was received;
- the full name, including middle initial, and address of the donor;
- the amount of the gift;
- the signature of an individual authorized by the charity to acknowledge gifts; and
- the name and website address for CRA (cra-arc.gc.ca/charities).
The above is a basic overview of the items to consider when soliciting and receiving donations; it is not an exhaustive list of the requirements under the Act or the Regulations. Should you require any further assistance or have any further questions, the Social Impact group at Miller Thomson LLP would be pleased to assist your organization.