Q&A

Must a registered charity in Canada only be allowed to make donations to another registered charity with the Charities Directorate, otherwise known also as “qualified donees”?

Yes, donations can only be donated to another registered charity within Canada, otherwise known as “qualified donees”. The Charities Directorate search engine provides an online access website to search out if a registered charity is indeed registered with the Charities Directorate and if the registered charity is still an active entity or if its charitable status has been revoked, because of past offences. The search engine is here: https://www.canada.ca/en/revenue-agency/services/charities-giving/charities-listings.html

Can a registered charity then support overseas mission work of another organization, that is not registered with the Charities Directorate in Canada?

No, such financial support is deemed unlawful for the registered charity in Canada, if the donations are sent to “non-qualified donees”.

How does the registered charity mitigate in such a case when there is activity involved with a non-qualified donee?

In such a case, the registered charity can deploy its own staff to work on the grounds in the mission field in discussion or an intermediary can be established, commonly known as a third-party arrangement. The establishment of an intermediary will require a signed Agency Agreement with the mission agency directly working overseas.

Can an Agency Agreement be used to deal with a “non-qualified donee” in Canada?

Yes, it is possible to establish an intermediary with the organization in Canada by using the proper Agency Agreement, under special circumstances. It is recommended that the registered charity must review such arrangements in greater details to abide with the written rules of the ITA in this case.

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