Fundraising 101: Key Insights for Canadian Charities

Canadians donated over $17 billion to registered charities in the most recently reported year, according to Statistics Canada. But for the charities receiving those funds, the rules around how money is raised matter just as much as the amounts. The Canada Revenue Agency (CRA) has detailed expectations around fundraising costs, reporting, acceptable practices, and donor receipting — and failing to meet them can put your registration at risk.

This guide covers everything Canadian charities need to know about fundraising in 2026, from the CRA's definition and cost ratio thresholds to digital fundraising rules and compliance red flags.

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What Is Fundraising?

At its core, fundraising means raising money to support a charitable cause or mission. It could involve asking individuals, businesses, or governments to donate, or organizing events or campaigns to generate funds.

In simple terms, what is the meaning of raise funds? It means collecting money to support a goal—in this case, helping a cause that matters.

Fundraising can include:

• Writing donation appeals
• Hosting events like walk-a-thons or silent auctions
• Applying for grants
• Selling merchandise
• Running digital campaigns

What Qualifies as Fundraising?

At its core, fundraising involves asking individuals or organizations for financial support. The CRA's definition casts a wide net, covering various direct and indirect activities.

For instance, a direct fundraising effort might involve volunteers going door-to-door in a neighbourhood and asking residents for donations.

Conversely, an indirect activity could include the research and planning that precedes such a campaign, like analyzing neighbourhood demographics to target the most promising areas.

Even though planning doesn't directly generate funds, it's a crucial part of the fundraising process, highlighting the interconnected nature of fundraising activities.

Each step, from planning to execution, plays a vital role in the fundraising campaign's success, underscoring the charity's unity and collaboration.

The CRA's Position on Fundraising

One of the challenges of fundraising for charities is the lack of clear guidelines in the Income Tax Act about what activities are allowed.

While the Act doesn't list specific fundraising activities, it does impose restrictions on how charities can utilize their resources. Charities must adhere to these regulations when conducting fundraising efforts.

The CRA's guidance clarifies compliance, emphasizing that all fundraising activities must align with the requirements outlined in the Income Tax Act. This ensures that charities maintain accountability and transparency in their fundraising practices.

What Does NOT Count as Fundraising Under the CRA?

Understanding what falls outside the CRA's fundraising definition matters just as much as knowing what's included. Several revenue streams are not classified as fundraising and are therefore reported differently on your T3010 return.

The following are generally not considered fundraising under CRA guidance:

Misclassifying these revenue streams as fundraising — or vice versa — is a common T3010 reporting error that can attract CRA scrutiny. If you are unsure how to categorize a specific revenue source, consult a charity lawyer before filing.

Key Messages from the CRA Guidance

The CRA guidance on fundraising highlights several important points for charities:

1. Compliance with the Income Tax Act: Charities must ensure that their use of resources in fundraising activities adheres to the regulations outlined in the Act.
2. Identifying Unacceptable Fundraising Practices: Section F of the guidance details ways charities can inadvertently violate the Income Tax Act through fundraising efforts. Section G outlines indicators of unacceptable practices.
3. Reporting Requirements: Appendix B provides guidance on reporting fundraising costs on Form T3010, the Registered Charity Information Return. Accurate reporting is essential for maintaining transparency and compliance.
4. Best Practices: Appendix C suggests best practices for charities to minimize the risk of engaging in unacceptable fundraising activities. While these practices are recommendations rather than strict requirements, they can significantly enhance a charity's fundraising strategy.

CRA Fundraising Cost Ratios: What Thresholds Matter?

One of the most practical compliance questions Canadian charities ask is: how much is too much to spend on fundraising? The CRA evaluates fundraising cost ratios when reviewing your T3010 return and may investigate if your ratio raises concerns.

Your fundraising cost ratio is calculated by dividing your total fundraising costs by your total fundraising revenue. The CRA uses general thresholds as follows:

Important: These thresholds are not absolute rules. The CRA considers context, including:

• Stage of development: Newer charities often have higher costs in early fundraising years as they build their donor base. This is generally understood by CRA if documented.
• Fundraising method: Some methods, such as direct mail acquisition campaigns, inherently carry higher costs than renewal campaigns.
• Charity size: Smaller charities may face proportionally higher costs for the same activities.

The ratio alone will not determine CRA's response. What matters is whether your charity can demonstrate that its fundraising activities are appropriate, cost-effective over time, and aligned with its charitable purposes.

If your ratio is above 35%, document the reasons clearly and be prepared to explain them if CRA makes an enquiry following your T3010 filing.

What Is the Main Purpose of Fundraising?

The main purpose of fundraising is to help your charity continue doing its work. Most charities rely on fundraising to pay for services, staff, programs, supplies, and outreach. Without fundraising, many charities would not survive.

But it's not just about money; fundraising also spreads awareness, builds a community of supporters, and gets people involved.

What Is a Fundraising Campaign?

A fundraising campaign is a focused effort to raise money for a specific goal over a certain period of time. Think of it like a mission with a clear target.

For example:

• A campaign to raise $50,000 for new school computers
• A holiday food drive to collect donations before December 31
• A month-long challenge where supporters donate for every kilometre walked

Good campaigns include a clear message, a plan to reach donors, and updates along the way.

Tips for a Strong Campaign:

• Set a clear goal
• Share a compelling story
• Use social media, email, and community events
• Thank donors publicly and privately

What Is Peer-to-Peer Fundraising?

Peer-to-peer fundraising (sometimes called P2P) is when your supporters raise money for your cause by asking their friends, family, or coworkers to donate.

Example: A student runs a 5K and asks people to sponsor them by donating to your charity. That student becomes a mini-ambassador for your cause.

So, what is peer to peer fundraising? It’s when your community helps you fundraise by reaching out to their networks. It’s powerful because it spreads your message further and builds trust—people are more likely to give when someone they know asks.

Digital and Online Fundraising Rules for Canadian Charities in 2026

Most Canadian charities now raise a significant portion of their funds online. While digital fundraising opens up a wider donor base, it also comes with CRA compliance obligations that many charities overlook.

Fundraising Platforms (CanadaHelps and Similar)

Platforms like CanadaHelps are popular because they handle receipting on behalf of charities. When a donor gives through CanadaHelps, CanadaHelps issues the official donation receipt — not the charity directly. This is CRA-compliant but means the charity receives net funds after the platform fee. Charities should confirm any platform they use is set up to issue CRA-compliant receipts before running a campaign.

Social Media Fundraising Tools

Facebook Fundraisers and Instagram donation stickers route donations through Meta's payment systems. Official CRA-compliant donation receipts are generally not issued through these tools. Donors who give through Facebook Fundraisers for Canadian charities typically do not receive a receipt they can use for their tax return. This is an important disclosure to make to potential donors before they give.

E-Transfer Donations

Charities can accept donations by e-transfer. Once received, the charity must issue an official donation receipt if the gift meets the threshold. The receipt must include all required CRA information regardless of how the gift was received.

Cryptocurrency Donations

The CRA treats cryptocurrency as a commodity, not currency. A donation of cryptocurrency is treated as a disposition of property. The charity should issue a receipt for the fair market value of the cryptocurrency at the time of the gift. Charities accepting crypto should have a clear policy and should convert to Canadian dollars promptly.

Electronic Official Donation Receipts

The CRA accepts official donation receipts issued by email or through a donor portal. Electronic receipts must contain the same required information as paper receipts, including:

• The charity's legal name and CRA registration number
• The date the donation was received
• The amount of the gift (or a description and fair market value for non-cash gifts)
• A statement that it is an official receipt for income tax purposes
• The name and address of the donor

Third-Party Fundraising Platforms

Before using any third-party platform to fundraise, verify the following:

• Does the platform issue CRA-compliant receipts?
• Who retains donor data — the platform or your charity?
• What fees are charged, and how does this affect your fundraising cost ratio?
• Does the platform's agreement expose your charity to any liability?

If the platform controls receipting, confirm this arrangement is reflected correctly in your T3010 reporting.

What Is a Case for Support in Fundraising?

Your case for support is one of the most important tools in fundraising. It’s the main message you use to show potential donors:

• What your organization does
• Why it matters
• What impact will a donation make
• Why you need funds now

A strong case for support makes people want to give. It should be emotional, clear, and honest.

What is a case for support in fundraising? It’s the “why” behind your ask. It gives donors the information and inspiration they need to take action.

What Is Stewardship in Fundraising?

Stewardship is how you take care of your donors after they give. It includes:

• Saying thank you promptly
• Sending updates on how their gift is being used
• Inviting them to events or volunteer opportunities
• Making them feel part of the mission

What is stewardship in fundraising? It’s the ongoing relationship with donors, showing them their gifts matter. Good stewardship builds loyalty and increases the chances that they will give again.

Unacceptable Fundraising Practices: What the CRA Flags

The CRA's fundraising guidance (Sections F and G) identifies specific practices that can put a charity's registration at risk. Many of these violations happen unintentionally, particularly in charities that use third-party fundraising firms or run high-volume campaigns.

The CRA considers the following to be indicators of unacceptable fundraising:

1. Fundraising that primarily benefits the fundraiser. If a professional fundraiser retains the majority of funds raised — or if the arrangement is structured so that little net revenue reaches the charity — this is a red flag. The CRA may view this as using charitable resources for a non-charitable purpose.

2. Misleading or deceptive representations. Fundraising materials must be truthful. Overstating the impact of donations, misrepresenting how funds will be used, or implying CRA endorsement are all problematic.

3. Coercive or high-pressure tactics. Aggressive solicitation, particularly targeting vulnerable donors, is considered unacceptable and may also attract scrutiny from provincial consumer protection authorities.

4. Using charitable resources for non-charitable fundraising If a charity's staff time, property, or other resources are used to fundraise for activities that do not further the charity's purposes, this violates the requirement that all charitable resources be used for charitable activities.

5. Acting as a conduit. If a charity raises funds through fundraising campaigns but simply passes the money to another organization without actually directing or controlling how it is used, CRA may treat this as an improper conduit arrangement.

Consequences of unacceptable fundraising practices can include CRA compliance action, mandatory repayment of tax advantages, suspension of receipting privileges, or — in serious cases — revocation of charitable status.

If you are unsure whether a planned fundraising activity or a contract with a professional fundraiser meets CRA's standards, seek legal advice before proceeding.

What Makes Fundraising in Canada Unique?

Fundraising in Canada comes with responsibilities. Unlike some other countries, registered charities in Canada must follow CRA rules closely. Some unique points include:

• Tax receipting: Only registered charities can issue official donation receipts for tax purposes.
• Transparency: CRA may review your fundraising spending, especially if your costs are high.
• Public trust: Canadians expect honesty and accountability. Being open about how donations are used builds long-term trust.

Best Practices for Successful Fundraising

1. Start with a plan: Don’t wing it. Set goals, budgets, and timelines.
2. Know your audience: Speak directly to the people most likely to care.
3. Tell a good story: Use emotion and real examples to connect.
4. Make it easy to give: Offer online donation options and clear instructions.
5. Track everything: Use spreadsheets or software to stay organized.
6. Say thank you: This is a must. Every donor should feel appreciated.
7. Follow up: Share results and updates so people know their gift made a difference.

Fundraising Compliance Checklist for Canadian Charities (2026)

Use this checklist before launching any fundraising campaign or filing your annual T3010 return:

1. ☐ Are all fundraising activities aligned with your registered charitable purposes?
2. ☐ Is your fundraising cost ratio below 35%? If not, can you document the reasons?
3. ☐ Are you issuing official donation receipts with all required CRA information?
4. ☐ Are fundraising costs reported separately and accurately on your T3010 return?
5. ☐ Have you reviewed and documented any contracts with third-party professional fundraisers?
6. ☐ Are your digital fundraising platforms issuing CRA-compliant receipts?
7. ☐ Do all fundraising materials make truthful and accurate representations to donors?
8. ☐ Have you assessed whether any peer-to-peer or social media campaigns create receipting gaps?
9. ☐ Are donations of non-cash gifts (including crypto) being receipted at fair market value?
10. ☐ Is your board reviewing fundraising activity and costs at least annually?

If you answered "no" or "unsure" to any of the above, consult a charity lawyer before your next campaign or filing deadline.

Summary

Fundraising is essential for Canadian charities — but doing it right under CRA rules requires more than just raising money. From understanding which activities qualify as fundraising to managing cost ratios, avoiding unacceptable practices, and navigating digital platforms, compliance must be part of every fundraising decision your organization makes.

In 2026, the stakes are higher as CRA continues to apply increased scrutiny to charity compliance and T3010 reporting. Charities that stay informed, document their decisions, and seek legal advice when needed are best positioned to fundraise sustainably and maintain their registered status.

If your charity has questions about its fundraising practices or CRA obligations, B.I.G. Charity Law Group is here to help.

Frequently Asked Questions About Fundraising for Canadian Charities

Can a Canadian charity pay a fundraiser a commission?

The CRA strongly discourages commission-based compensation for professional fundraisers. While it is not absolutely prohibited, arrangements where a fundraiser is paid a percentage of funds raised are considered a red flag and may indicate that the fundraising primarily benefits the fundraiser rather than the charity. Fixed-fee arrangements are preferred and carry far less compliance risk.

What is the difference between a fundraising expense and a program expense?

A fundraising expense is a cost incurred to solicit donations or generate fundraising revenue — such as printing appeal letters, running a fundraising gala, or paying a fundraising consultant. A program expense is a cost incurred to actually carry out your charitable activities. The distinction matters because they are reported in different sections of the T3010, and misclassifying program costs as fundraising costs (or vice versa) can distort your reported fundraising cost ratio.

Does a charity need CRA approval before launching a fundraising campaign?

No. Registered charities do not need prior CRA approval to run a fundraising campaign. However, the campaign must comply with CRA's fundraising guidance, and any revenues and costs must be accurately reported on your T3010 return. Some provinces also have their own rules around charitable solicitation — Ontario, for example, has requirements under the Charities Accounting Act.

What must be included on an official donation receipt in Canada?

A CRA-compliant official donation receipt must include: a statement that it is an official receipt for income tax purposes; the charity's full legal name and CRA registration number; the receipt's serial number; the place and date of issue; the date the donation was received; the donor's full name and address; and the eligible amount of the gift. For non-cash gifts, the receipt must include a brief description of the property and its fair market value. Missing any of these elements makes the receipt non-compliant.

Can a non-registered organization issue tax receipts for fundraising?

No. Only organizations registered as charities with the CRA are permitted to issue official donation receipts for income tax purposes. Non-registered nonprofits, community groups, and social enterprises cannot issue charitable tax receipts, even if they carry out activities that benefit the public.

What is the CRA's acceptable fundraising cost ratio for a registered charity?

The CRA does not set a single hard-and-fast threshold, but generally views a fundraising cost ratio below 20% as clearly acceptable. Ratios between 20% and 35% may be acceptable depending on context. Ratios above 35% are likely to attract scrutiny, and ratios above 70% are a strong indicator of unacceptable fundraising. New charities or charities building a new donor base may justify higher ratios in early years if they can document the circumstances.

Can a Canadian charity fundraise outside Canada — including in the United States?

A Canadian registered charity can accept donations from foreign donors, including Americans. However, donations from US-based donors are not eligible for Canadian tax receipts for US tax purposes — those are governed by US law. If your charity wants to issue tax-deductible receipts to American donors, it would need to be registered as a public charity with the IRS or partner with a registered US entity. Cross-border fundraising arrangements have additional legal considerations and should be reviewed by a charity lawyer.

How does a charity report fundraising on its T3010 return?

The T3010 requires charities to report total fundraising revenues and total fundraising expenditures in the financial information section. These figures should reflect only the costs and revenues directly related to soliciting donations, not program costs or general administration. CRA uses these figures to calculate your fundraising cost ratio as part of its compliance review. Accurate, consistent reporting year over year is the best way to avoid triggering a CRA enquiry.

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