CRA's Report on the Charities Program 2024-2025 Insights

The Canada Revenue Agency's Charities Directorate released its Report on the Charities Program 2024-2025. This report offers insights into how the charitable sector performed during a transformative year.

The report reveals that registered charities managed $272 billion in expenditures on charitable activities in 2023. Government funding remained the primary revenue source, making up 64% of all charity income.

The Charities Directorate improved its operations this fiscal year. There was a 29% increase in registration decisions and better service delivery through modernization.

The report shows that 85% of charity applicants now use online platforms for registration. The CRA processed 2,720 new charity applications and completed 220 compliance audits.

These numbers reflect the growing digitization of charity services. They also show a continued focus on maintaining sector integrity through risk-based oversight.

This analysis of the report examines data trends affecting Canada's 86,000 registered charities. It also explores changes in registration approval rates and assesses how new policy guidance impacts charitable operations.

This article will look at what these developments mean for charity leaders, donors, and the broader nonprofit sector. This information will guide stakeholders as they move into the 2025-2026 fiscal year.

The Charitable Sector by the Numbers

The charitable sector in Canada managed $393 billion in total revenue during 2023. Government funding accounted for 64% of all charity income.

Over 86,000 registered charities operate across the country. They spent $272 billion on charitable activities and maintained steady growth over the past decade.

Sector Size and Composition

Canada's charitable sector included about 86,000 registered charities in 2023. The sector covers four main categories of charitable purposes.

Other purposes beneficial to the community is the largest segment at 42% of all registered charities. This category includes organizations focused on community development, environmental protection, and social services.

Advancement of religion makes up 30% of registered charities. These organizations include churches, religious societies, and faith-based service groups.

Advancement of education represents 14% of the sector. Universities, schools, research institutions, and educational foundations belong to this category.

Relief of poverty also comprises 14% of registered charities. Food banks, homeless shelters, and poverty reduction organizations serve this mission.

The CRA also regulates other qualified donees. These include registered Canadian amateur athletic associations, journalism organizations, and national arts service organizations.

Financial Overview

Registered charities reported $393 billion in total revenue in 2023. Government funding dominated charity income at $252 billion, representing 64% of all revenue.

Revenue from the sale of goods and services generated $31 billion, or 8% of total revenue. Tax-receipted gifts contributed $23 billion, making up 6% of charity income.

Non-tax-receipted revenue brought in $14 billion, or 4% of total funds. Revenue from other registered charities added $11 billion, or 3% to the sector's income.

The remaining 15% came from various other sources, totaling $62 billion. Charities allocated 77% of their spending to charitable activities, which accounted for most of their $393 billion in resources.

Gifts to qualified donees made up 4% of expenditures. The remaining 19% went to management, administration, professional fees, and operational costs.

Ten-Year Trends

Tax-receipted gifts grew from $16 billion in 2014 to $23 billion in 2023. This 44% increase shows continued support from Canadian donors.

Government funding to charities rose from $166 billion in 2014 to $252 billion in 2023. This represents a 52% increase in government support over ten years.

Total expenditures on charitable activities increased from $184 billion in 2014 to $272 billion in 2023. This 48% rise demonstrates the sector's growing capacity to serve communities.

Charitable donations and government funding continued to increase, even during challenging periods. The data shows consistent year-over-year growth across all metrics.

International Activities

Canadian registered charities spent about $5.3 billion on activities outside Canada in 2023. This funding supports international development work, disaster relief, and cross-border charitable programs.

These expenditures demonstrate the global reach of Canada's charitable sector. Organizations engage in humanitarian work, educational programs, and development projects worldwide.

International activities require careful compliance with Canadian regulations. Charities must maintain direction and control over resources used outside Canada.

The $5.3 billion in international spending shows significant Canadian charitable investment in global causes. This funding supports everything from emergency relief to long-term development projects.

Registration Process Updates

The 2024-2025 fiscal year saw significant improvements in charity registration processing. There was a 29% increase in decisions made, and digital adoption reached 85% of all applications.

Application Statistics

The CRA received 2,782 total applications during the 2024-2025 fiscal year. This included 2,720 applications for charitable registration and 62 applications for other qualified donee categories.

The agency improved its processing efficiency and made 2,599 decisions on registration applications. This represented a 29% increase compared to the previous year.

Digital adoption reached 85% of applicants using the CRA's online platforms. This shift helped streamline the process for both applicants and the CRA team.

The increase in online submissions reduced processing delays. Applicants could submit documents and correspondence more efficiently through the digital channels.

Application Outcomes

Registration approval was the most common outcome for the fiscal year. The CRA approved 81.9% of charitable registration applications, showing that most organizations met the requirements.

Denial rates remained below 1% of all application outcomes. Most applicants understand the basic requirements before applying.

Other qualified donees experienced higher denial rates due to distinct eligibility criteria. Each qualified donee category has specific requirements that differ from standard charitable registration.

The main reasons for denying the 23 charitable applications included lack of information about proposed activities, conducting non-charitable activities, and acting as a conduit without proper oversight.

Modernization Impact

The CRA focused its modernization efforts on streamlining processes and upgrading technical tools. These improvements led to faster processing times and more consistent decision outcomes.

The agency enhanced its internal application handling procedures. Staff received better tools to review applications efficiently while maintaining quality standards.

The modernization initiative emphasized educational support for applicants. The CRA clarified post-registration responsibilities to help new charities understand their ongoing obligations.

Technical upgrades to the systems improved consistency in application reviews. Applicants now experience more predictable timelines when awaiting decisions.

Application Breakdown by Purpose

Organizations seeking registration under "other purposes beneficial to the community" made up 42% of completed applications. These organizations serve diverse community needs.

Religious organizations comprised 30% of applications. This shows continued interest in establishing faith-based charitable organizations across Canada.

Educational advancement and poverty relief each represented 14% of applications. These remain important areas for new organization development.

The distribution shows balanced interest across all four charitable purposes. Each category serves distinct community needs and attracts different types of organizations.

Compliance and Enforcement

The Charities Directorate uses a risk-based approach to monitor compliance. The agency focuses on education for most charities and conducts targeted audits for serious violations.

In 2024-2025, the CRA completed 220 audits and carried out 6,595 non-audit interventions. The most common issues involved T3010 returns, donation receipts, and record-keeping.

Risk-Based Approach

The CRA focuses its compliance efforts on areas that pose the greatest risk to the charitable sector's integrity. This risk-based approach helps the agency use resources efficiently while addressing the most serious concerns.

During 2024-2025, the top three high-risk areas were aggressive tax planning, offshore activities, and ineligible individuals. This targeted approach helps the agency identify charities that may be inappropriately accessing tax benefits or failing to protect against terrorist abuse risks.

Most charities are compliant and only need guidance occasionally. The CRA provides education through letters, telephone calls, and information requests to correct minor errors.

Audit Results

The CRA completed 220 audits during the 2024-2025 fiscal year. These audits focused on charities whose activities may compromise the sector's integrity or those lacking proper controls against clear risks.

Before imposing any compliance measures, the agency issues an administrative fairness letter. This letter gives charities the chance to respond to audit concerns and provide more information.

Audit outcomes range from education letters for minor issues to stronger measures like sanctions or revocations for serious non-compliance. The specific outcome depends on the severity and nature of the violations found.

Common Non-Compliance Issues

CRA audits consistently identify three main problem areas for charities.

Books and Records are a significant compliance challenge. Many charities fail to maintain adequate documentation of their activities and financial transactions.

Official Donation Receipts often cause violations. Charities sometimes issue incomplete or incorrect receipts that do not meet regulatory requirements.

Form T3010 Issues are the most common problem. Many charities submit incomplete or incorrect annual information returns, missing required details about their activities and finances.

Compliance Outcomes

When the CRA finds non-compliance issues, it uses progressive measures based on the severity of the violations.

Non-audit interventions handled 6,595 cases in 2024-2025. These include education letters, phone calls, and information requests to promote voluntary compliance.

Education is the primary tool for addressing minor compliance issues. The agency sends targeted letters explaining how to fix common mistakes, especially with T3010 returns.

Sanctions may be imposed for more serious violations that require formal compliance measures beyond education.

Revocations

Revocation is the most serious compliance outcome the CRA can impose on registered charities. The agency uses this measure only when other compliance tools have failed or when violations are severe enough to threaten the sector's integrity.

The revocation process includes multiple steps to ensure fairness. Charities receive notice of proposed revocation and have opportunities to respond before the CRA makes final decisions.

Once revoked, organizations lose their charitable status immediately. They can no longer issue tax receipts or claim tax exemptions on income.

Former charities may face significant financial consequences through revocation tax obligations. The organization must wind up its affairs and distribute remaining assets appropriately.

Revocation Tax

Revoked charities face a special tax equal to 100% of the value of their remaining property. This tax applies to assets held when revocation becomes effective.

The revocation tax serves as both a penalty and a way to recover tax benefits that were inappropriately claimed. It ensures that assets originally intended for charitable purposes do not benefit private interests.

Organizations can avoid or reduce revocation tax by transferring assets to other qualified donees before revocation takes effect. These transfers must be completed properly and documented according to regulatory requirements.

The CRA may reduce or waive revocation tax in specific cases where charities show good faith efforts to comply or face genuine hardship.

Policy and Guidance Updates

The Charities Directorate updated key guidance documents during 2024-2025. These updates clarified policy positions and provided clearer direction to the charitable sector.

The updates focused on poverty relief criteria and enhanced educational materials. This helps charities understand their obligations under the Income Tax Act.

Major Policy Revisions

The most significant policy update was the revision of Guidance CG-029, Relief of poverty and charitable registration.

This guidance document received substantial updates to reflect current policy and provide clearer direction to organizations seeking charitable registration under the poverty relief category.

The updated guidance includes new grant rules that affect how charities can distribute funds.

These changes help organizations understand what activities qualify as poverty relief for registration purposes.

The revision also incorporates affordable housing examples to show how housing-related activities can meet charitable registration requirements.

This addition gives practical scenarios for organizations working in housing and community development.

These updates clarify the CRA's policy position and reduce uncertainty for applicants.

The guidance helps organizations structure their activities to meet Income Tax Act requirements for charitable registration.

Legislative Changes

The CRA supported various reviews of the Charities program throughout the fiscal year.

These ongoing reviews examine how current legislation serves the charitable sector and identify areas for improvement.

The reviews focus on ensuring that Income Tax Act provisions remain relevant and effective for modern charitable activities.

The agency provided input on how legislative frameworks impact the daily operations of registered charities.

This support included data analysis and policy recommendations based on regulatory experience.

This work helps inform potential future changes to charity legislation and regulations.

The collaborative approach ensures that any legislative updates will better serve both the charitable sector and Canadian taxpayers.

Educational Resources

The CRA published new web pages to educate charities about risks of terrorist abuse.

These resources help charities identify and prevent misuse of their organizations for harmful purposes.

The educational materials provide practical guidance on establishing proper controls and oversight procedures.

Charities can use these resources to protect themselves and maintain compliance with anti-terrorism requirements.

The agency also prioritized knowledge-sharing and capacity-building internally through training initiatives.

This investment in staff ensures more informed decision-making across all program areas.

The educational approach helps charities understand their post-registration obligations.

This proactive method aims to prevent compliance issues before they occur.

Stakeholder Engagement

The Charities Directorate strengthened relationships across multiple platforms during 2024-2025.

The agency worked with sector representatives, government partners, and international colleagues to build trust through regular dialogue and collaborative problem-solving.

Advisory Committee on the Charitable Sector (ACCS)

The CRA launched the 2024 Call for Applications for Canadians to join the Advisory Committee on the Charitable Sector.

This committee serves as the main way for the agency to receive input from sector representatives.

The ACCS published Report #4 during this fiscal year, providing recommendations on key policy areas affecting registered charities.

The CRA used committee feedback to inform its regulatory decisions.

The diverse membership ensures the agency hears from charities of different sizes and focus areas.

Committee members bring expertise from various charitable subsectors and help the CRA understand how policy changes affect day-to-day operations.

Technical Issues Working Group (TIWG)

The Technical Issues Working Group addresses complex regulatory questions that arise in charitable registration and compliance.

The CRA convenes this group when it needs specialized input on technical matters.

Members include lawyers, accountants, and other professionals who work closely with charities.

Their expertise helps the agency develop practical solutions to regulatory challenges.

The CRA relies on TIWG input when updating guidance documents.

The group reviews proposed changes before the agency publishes them publicly.

This working group helps bridge the gap between regulatory requirements and practical implementation.

The agency values their real-world perspective on how policies affect charitable operations.

NPO Sector Dialogues on Illicit Financing

The CRA participated in dialogues focused on protecting the nonprofit sector from illicit financing risks.

These discussions help the agency balance security concerns with charitable operations.

The agency published new web pages to educate charities about terrorist abuse risks.

These resources came directly from stakeholder feedback about needed guidance.

The dialogues include representatives from various nonprofit organizations.

Participants work together to identify practical approaches to risk management.

These conversations inform CRA compliance activities.

The agency uses stakeholder input to focus its efforts on genuine risk areas.

Federal/Provincial/Territorial Network

The CRA maintained its network with other levels of government that regulate aspects of charitable activity.

This collaboration prevents regulatory gaps and duplication.

Provincial and territorial governments handle charity incorporation in most jurisdictions.

The CRA coordinates with them on registration matters that affect both levels of regulation.

Municipal governments often partner with charities on service delivery.

The network helps ensure consistent approaches across government levels.

The agencies share information about emerging trends and compliance issues.

This coordination helps them respond more effectively to sector-wide challenges.

International Engagement

The CRA participated in international forums focused on charity regulation and anti-money laundering measures.

These connections help the agency learn from other jurisdictions' experiences.

The CRA's international work focuses on preventing terrorist financing through charitable organizations.

The agency shares best practices with regulatory counterparts in other countries.

The CRA contributes to global standards development for charity oversight.

The agency's input helps ensure international standards work for the Canadian context.

International engagement helps the CRA stay current with emerging threats and regulatory innovations.

The agency adapts successful approaches from other jurisdictions when appropriate for Canada.

Client Service and Education

The Charities Directorate exceeded service targets for telephone accessibility and response times while managing increased call volumes.

Online platforms became the preferred method for applications, with 85% of applicants using digital services for submissions and correspondence.

Service Statistics

The directorate handled a significant increase in telephone inquiries during the 2024-2025 fiscal year.

The agency responded to more calls than the previous year while maintaining high service quality.

The team supported applicants and their representatives throughout the registration process.

This included technical advice on operating a charity and general guidance on regulatory requirements.

The shift toward digital services proved successful.

The agency encouraged applicants to use online platforms for submitting applications, documents, and correspondence.

Service Standards Performance

The CRA exceeded its service standard targets for both telephone enquiries and accessibility by callers.

This achievement came despite receiving more calls than in previous years.

The performance improvements resulted from internal process enhancements.

The agency streamlined application handling procedures to reduce processing times.

Upgrades to internal technical tools ensured more consistent treatment of applications.

These improvements contributed to better decision outcomes and faster service delivery.

Webinars and Education

The CRA provided regulatory updates and education at key events throughout the fiscal year.

These sessions strengthened relationships with stakeholders in the charitable sector.

The educational approach emphasized post-registration responsibilities.

The agency focused on helping charities understand the regulatory framework they must follow after registration.

Training initiatives prioritized knowledge-sharing and capacity-building internally.

This approach created a stronger foundation for informed decision-making across the team.

The agency gained valuable insights from its engagement activities.

These interactions helped the CRA better understand the needs of the charitable sector.

Website Optimization

The CRA published new web pages to educate charities about terrorist abuse risks.

These resources help organizations understand compliance requirements and protect themselves from potential threats.

The online content clarified regulatory obligations.

The agency aimed to provide clear guidance that charities can easily understand and implement.

The website improvements supported the goal of promoting voluntary compliance.

Educational resources help prevent common mistakes before they occur.

Electronic Communications

The CRA sent education letters to inform charities about common and avoidable mistakes.

These communications focused on correcting errors in T3010 annual information returns.

The electronic mailing list keeps subscribers informed about important news and events.

Charities can sign up to receive updates directly from the Charities Directorate.

The agency carried out 6,595 non-audit interventions during the fiscal year.

These included education letters, telephone calls, and requests for information aimed at promoting voluntary compliance.

Public Information Requests

The CRA continued to share more information with the public and charitable sector.

This transparency helps build trust and understanding of the regulatory role.

The guidance documents received updates during the fiscal year.

The agency revised Guidance CG-029 on relief of poverty and charitable registration to clarify its policy position.

The CRA provided technical advice and general information to both charities and the public.

This service helps ensure organizations understand their obligations under the Income Tax Act.

The data-driven approach helps the agency make better decisions and improve operations.

The CRA uses this information to enhance its services and support the charitable sector more effectively.

External Reviews and Oversight

The Charities Directorate participated in several external reviews during 2024-2025.

Evaluations by the Financial Action Task Force and national oversight agencies examined regulatory processes and provided recommendations for strengthening charity oversight.

Financial Action Task Force (FATF) Evaluation

The FATF conducted its evaluation of Canada's anti-money laundering and counter-terrorist financing framework during the 2024-2025 period.

The CRA provided extensive documentation and participated in interviews to demonstrate compliance efforts within the charitable sector.

The evaluation examined risk assessment procedures for charity registration applications.

FATF reviewers analyzed how the agency identifies and mitigates risks of terrorist financing abuse in registered charities.

The CRA demonstrated its enhanced due diligence processes for high-risk charity applications.

The evaluation covered screening procedures for charity directors and monitoring of international activities.

The new web pages educating charities about terrorist abuse risks were highlighted during the review process.

These resources help charities understand their obligations and implement appropriate safeguards.

National Security Intelligence Review Agency (NSIRA)

NSIRA continued its review of information sharing between security agencies and the Charities Directorate during 2024-2025.

The CRA provided detailed briefings on its processes for handling sensitive information in charity audits.

The review examined how the agency balances national security concerns with administrative fairness in compliance activities.

NSIRA assessed procedures for protecting classified information while maintaining transparency with charities under audit.

The CRA collaborated with NSIRA to ensure staff receive appropriate training on handling security-related matters.

The review process helped strengthen protocols for managing sensitive cases.

Office of the Taxpayers' Ombudsperson Follow-up

The Office of the Taxpayers' Ombudsperson conducted follow-up activities on previous recommendations related to charity services.

The CRA implemented several improvements to address concerns about communication and processing times.

Enhanced client service standards resulted from recommendations made in earlier ombudsperson reports.

The agency exceeded its service targets for telephone accessibility and response times during 2024-2025.

The ombudsperson's office reviewed complaint handling procedures for charity applicants and registrants.

The CRA streamlined its internal processes to provide more consistent and timely responses to taxpayer concerns.

Critical Analysis and Sector Implications

The CRA's 2024-2025 report reveals significant shifts in how the Charities Directorate operates and regulates Canada's charitable sector.

The modernization efforts show promise but raise questions about implementation timelines.

The sector's heavy reliance on government funding creates both stability and vulnerability for charitable organizations.

Modernization Initiatives

The Charities Directorate's modernization efforts mark a turning point for sector regulation.

The report emphasizes enhancing operational processes and promoting compliance through updated systems and procedures.

The data shows a 29% increase in registration decisions compared to the previous year.

This improvement stems from streamlined application handling and upgraded internal technical tools.

The focus on consistency in decision-making addresses concerns about unpredictable outcomes.

However, the report lacks specific timelines for modernization completion.

Charities don't know when they will see the full benefits of these changes.

The emphasis on "laying a strong foundation for the future" suggests this is a multi-year process.

Key modernization areas include:

• Enhanced operational processes
• Improved internal technical tools
• Streamlined application review procedures
• Better consistency in decision outcomes

The 85% online application usage rate shows strong sector adoption of digital services.

This shift reduces processing delays and improves communication between applicants and the CRA.

Compliance Philosophy

The CRA's risk-based compliance approach continues to evolve with clearer distinctions between education and enforcement actions.

The agency shows a preference for corrective education over punitive measures for most compliance issues.

During 2024-2025, only 23 applications were denied for charitable registration, down from 33 the previous year.

This decline suggests either improved application quality or more flexible interpretation of eligibility criteria.

The top three high-risk areas remain aggressive tax planning, offshore activities, and ineligible individuals.

These focus areas indicate where the CRA sees the greatest threats to sector integrity.

Non-audit interventions totalled 6,595 activities, significantly outnumbering the 220 completed audits.

This ratio demonstrates the preference for voluntary compliance over formal enforcement action.

Common non-compliance findings centre on basic administrative requirements:

• Books and records maintenance
• Official donation receipt procedures
• T3010 annual return completion

Government Funding Dependency

The charitable sector now relies more on government funding, with 64% of all charity revenue coming from government sources in 2023.

This equals $252 billion out of $393 billion in total sector revenue.

Government funding trends show consistent growth:

• 2014: $166 billion
• 2019: $199 billion
• 2023: $252 billion

This dependency creates vulnerability for charities if government priorities change.

Charities show limited diversification in funding, with tax-receipted gifts making up only 6% of total revenue.

The Government of Canada invests heavily, recognizing charities' essential role in social service delivery.

This concentration of funding raises questions about sector autonomy and sustainability.

Provincial and municipal governments also contribute, making the charitable sector a key delivery mechanism for public services at all levels.

Declining Public Foundations

The report does not explicitly discuss public foundation trends, but registration data indicates ongoing challenges in this area.

Traditional fundraising models now face pressure from digital platforms and evolving donor preferences.

Shifts in charitable purposes show "other purposes beneficial to the community" making up 42% of new registrations.

This broad category often includes organizations that might have registered as public foundations in the past.

Registration by charitable purpose:

• Other purposes beneficial: 42%
• Advancement of religion: 30%
• Advancement of education: 14%
• Relief of poverty: 14%

The low percentage of poverty relief organizations suggests established charities dominate this space, limiting new registrations.

International Activities Oversight

Charities spent $5.3 billion on activities outside Canada in 2023.

This amount represents about 1.3% of total sector expenditures but requires careful oversight to prevent abuse.

The CRA focuses on offshore activities as a high-risk compliance area, showing growing concerns about accountability and control over international operations.

The agency now applies enhanced scrutiny of direction and control requirements for overseas activities.

Lack of direction and control over resources remains a common reason for registration denial.

This shows the CRA's emphasis on maintaining Canadian oversight of charitable funds spent internationally.

The report mentions new web pages to educate charities about terrorist abuse risks.

This step shows the CRA's proactive approach to protecting the sector's reputation and preventing exploitation.

Service Standards Under Pressure

Despite meeting telephone service targets, the system faces strain from increased call volumes in 2024-2025.

The agency exceeded service standards for telephone enquiries and accessibility, but rising demand suggests resource constraints.

The focus on online services aims to reduce telephone demand and improve efficiency.

Not all charities have equal ability to use digital platforms effectively.

Processing improvements led to faster registration decisions, but the report does not provide specific data on average processing times.

The 29% increase in decisions may reflect improved efficiency or clearing of backlogs.

Staff training initiatives received priority, showing the need to develop human resources to support modernization.

Private Benefit and Tax Planning Concerns

Private benefit remains a main reason for registration denial, showing ongoing challenges in separating legitimate charitable activities from private advantage schemes.

The CRA's continued vigilance protects sector integrity.

Aggressive tax planning is one of three high-risk compliance focus areas.

Sophisticated schemes attempt to exploit charitable status for tax advantages instead of genuine charitable purposes.

The report does not quantify these issues, but their prominence in enforcement priorities suggests significant resource allocation.

Acting as a conduit also appears often in denial reasons.

These concerns highlight challenges in maintaining public trust while allowing legitimate innovation in charitable structures and activities.

Transparency Progress

The CRA has improved sector transparency through regular reporting and stakeholder communication.

The annual report fulfills commitments made by the Minister of National Revenue in 2016.

The agency has expanded educational resources, including updated guidance on relief of poverty (CG-029) and new materials on terrorist abuse risks.

These publications offer clearer policy positions for sector participants.

The Advisory Committee on the Charitable Sector published its fourth report, showing ongoing dialogue between regulators and sector representatives.

The 2024 call for new committee members shows a commitment to fresh perspectives.

Some transparency gaps remain, especially around detailed processing times and specific modernization timelines.

Stakeholder Engagement Depth

The report highlights regulatory updates and education at key sector events, but provides few details about the depth and frequency of these engagements.

Strengthening stakeholder relationships appears central to the modernization strategy.

Umbrella organizations, accountants, lawyers, and other professionals play a role in this process.

Looking Ahead to 2025-2026

The Charities Directorate plans significant modernization and improved service delivery in the coming fiscal year.

Key focus areas include operational improvements, technology upgrades, and stronger stakeholder engagement to better serve Canada's charitable sector.

Expected Priorities

The Charities Directorate will continue its modernization initiatives to enhance operational processes and procedures.

These efforts aim to make the program more efficient and support registered charities across Canada.

Compliance and trust remain central priorities.

The directorate will focus more on risk-based compliance, especially in the three high-risk areas: aggressive tax planning, offshore activities, and ineligible individuals.

Enhanced education and outreach activities will expand.

The directorate plans to strengthen stakeholder relationships through more regulatory updates at key events and improved guidance documents.

Technology improvements will continue.

With 85% of applicants using online services in 2024-2025, further digital platform enhancements are likely priorities.

Training initiatives for internal staff will expand to build capacity and ensure informed decision-making across all directorate functions.

Challenges on the Horizon

Efficiently processing application volumes remains a key challenge.

With 2,720 charity applications and 62 other qualified donee applications received in 2024-2025, maintaining service standards while improving processing times requires ongoing attention.

Compliance enforcement complexity continues to grow.

Balancing education with necessary audits for the small percentage of non-compliant charities requires careful resource allocation and planning.

The directorate must address incomplete applications, which slow processing times.

Common issues include missing governing documents, incomplete financial information, and inadequate activity descriptions.

Technological modernization presents implementation challenges.

Upgrading internal tools and systems while maintaining service continuity requires careful project management and staff training.

Managing stakeholder expectations during modernization efforts will be critical.

Charities expect improved services while the directorate balances efficiency gains with thorough regulatory oversight.

Opportunities

Digital transformation offers significant opportunities for improvement.

The high adoption rate of online services creates possibilities for further streamlining and automation of application processes.

Data-driven decision making can expand.

The directorate's commitment to being a data-driven regulator opens opportunities for better risk assessment and resource allocation.

Stakeholder collaboration can deepen.

Enhanced engagement with umbrella organizations, legal professionals, and the charitable sector can improve compliance outcomes and reduce regulatory burden.

Process improvements show promise.

The 29% increase in decisions made in 2024-2025 demonstrates that operational enhancements can deliver measurable results.

Educational initiatives can expand reach.

New web pages on terrorist abuse risks and updated guidance documents show potential for broader educational impact across the sector.

Sector Recommendations

Charities should embrace digital platforms for all interactions with the CRA.

With 85% of applicants using online services successfully, organizations benefit from faster processing and better tracking capabilities.

Application preparation requires attention.

Organizations should ensure complete submissions by including all governing documents, comprehensive activity descriptions, and required financial information before submitting applications.

Compliance awareness needs strengthening.

Charities should focus on common non-compliance areas: proper books and records maintenance, correct official donation receipt practices, and accurate Form T3010 completion.

Stay informed through official channels.

Organizations should subscribe to the Charities Directorate's electronic mailing list for timely updates on policy changes and regulatory developments.

Engage proactively with educational resources.

Attending CRA events and reviewing updated guidance documents helps organizations understand their obligations and avoid common compliance issues.

Conclusion

The CRA's Report on the Charities Program 2024-2025 shows significant progress in modernizing charity regulation in Canada.

The 29% increase in application decisions and 85% online application adoption demonstrate improved efficiency and service delivery.

Charities continue to play a vital role in Canadian communities, with $23 billion in tax-receipted donations and $272 billion spent on charitable activities in 2023.

The CRA now focuses more on education than enforcement, with 6,595 non-audit interventions compared to 220 audits, showing a collaborative approach to compliance.

For charities navigating registration requirements or compliance obligations, professional guidance ensures success.

Contact B.I.G. Charity Law Group at 416-488-5888 or dov.goldberg@charitylawgroup.ca for expert assistance with charity law matters.

Visit CharityLawGroup.ca to learn more about services and schedule a free consultation.

Frequently Asked Questions

The CRA's Report on the Charities Program 2024-2025 answers common questions about charity operations, reporting requirements, and regulatory changes.

These questions cover finding charity information, understanding reporting obligations, sector growth, and recent updates to CRA processes.

How do I find the annual report of a charity?

Anyone can access charity annual reports through the CRA's online charity listings.

Each registered charity must file Form T3010, which serves as their annual information return.

This form contains financial information, activities, and governance details.

The CRA makes these returns available to the public through their website.

Anyone can search by charity name or registration number.

The database shows current and historical filings for transparency.

What is the end of year report for charities?

The end of year report for charities is Form T3010, the Registered Charity Information Return.

Charities must file this within six months of their fiscal year end.

This report includes revenue sources, expenditures on charitable activities, and compliance with the disbursement quota.

It also covers governance information and director details.

The form helps the CRA track how charities use their resources.

It ensures they meet their obligations under the Income Tax Act.

Which sectors saw the most significant growth in charitable organizations according to the latest report?

According to the 2024-2025 report, "other purposes beneficial to the community" represented 42% of completed applications.

This category showed the strongest growth in new registrations.

Religious advancement accounted for 30% of applications, while education and poverty relief each represented 14%.

The community benefit sector continues to attract the most new organizations.

Government funding remains the largest revenue source at 64% of total charity revenue.

This shows continued public sector support for charitable work.

What updates to the CRA's audit process for charities were presented in their latest program report?

The CRA completed 220 audits during fiscal year 2024-2025.

The top three high-risk areas were aggressive tax planning, offshore activities, and ineligible individuals.

The audit process now uses more risk-based approaches.

The agency focuses on charities that compromise sector integrity or do not protect against terrorist abuse risks.

The CRA also increased non-audit interventions to 6,595 cases.

This approach promotes voluntary compliance through education instead of formal audits.

How has the reporting on political activities by charities evolved in the 2024-2025 findings?

The 2024-2025 report does not detail changes to political activity reporting requirements.

The CRA continues to monitor compliance with existing restrictions on political activities.

Charities must limit political activities so they are