CRA news, information, and events for registered charities
Charities Connection is an electronic publication that gives registered charities information on technical issues, new guidance and policy changes, CRA initiatives, and reminders.
No. 11 - January 2012 - Special Edition: Budget 2011
Budget 2011 - Changes for charities, registered Canadian amateur athletic associations, and qualified donees
- Budget 2011 - Changes for qualified donees could affect your charity
- What is a qualified donee?
- Other significant impacts - New requirements for other qualified donees
- New lists on the Charities and giving webpages
- Changes for registered Canadian amateur athletic associations (RCAAA)
- More information coming soon!
If your charity gives to a qualified donee, it will be affected by these changes.
On June 6, 2011, the Minister of Finance presented the federal budget announcing measures that affect registered charities, registered Canadian amateur athletic associations (RCAAA), and other qualified donees. The new measures will enhance the accountability and transparency of all qualified donees. For detailed information, see Budget 2011 - Strengthening the Charitable Sector.
The following is an introduction to some of the changes.
Under the Income Tax Act, a qualified donee is an organization that can issue official donation receipts for gifts that individuals and corporations make to it, and that can receive gifts from registered charities. As of January 1, 2012, most qualified donees have to be listed and are subject to some new requirements.
The following groups of organizations are qualified donees:
- registered charities;
- registered Canadian amateur athletic associations;
- Her Majesty in right of Canada or a province;
- the United Nations and its agencies;
- listed Canadian municipalities;
- listed municipal and public bodies performing a function of government in Canada;
- listed prescribed universities outside Canada;
- listed charitable organizations outside Canada that have received a gift from Her Majesty in right of Canada; and
- listed low-cost housing corporations for the aged.
When a qualified donee issues an official donation receipt for a gift received, the donee must ensure that the gift meets all the requirements set out in the Income Tax Act and its regulations. If a qualified donee issues a receipt for property that is not a gift, the CRA may suspend the receipting privileges of the qualified donee or revoke its status.
All qualified donees must keep proper books and records that allow the CRA to verify donations, and make these books and records available to the CRA on request. The CRA has the authority to impose sanctions when a qualified donee fails to keep proper books and records.
In 2000, the CRA introduced the Charities Listings, a list of all current and previously registered charities that includes all public information submitted in their annual Form T3010, Registered Charity Information Return.
On January 3, 2012, we added Other qualified donee listings to our webpages. The lists of qualified donees are:
- registered Canadian amateur athletic associations;
- Canadian municipalities;
- municipal and public bodies performing a function of government in Canada;
- prescribed universities outside Canada;
- charitable organizations outside Canada that have received a gift from Her Majesty in right of Canada; and
- low-cost housing corporations for the aged.
Each entry, where applicable, shows where the qualified donee is located, its current status, and the effective date of its status.
New provisions affecting RCAAAs came into force on January 1, 2012.
An RCAAA must now be established for the exclusive purpose and exclusive function of promoting amateur athletics in Canada on a nation-wide basis. For more information about the requirements of registration, go to Canadian amateur athletic associations.
As well, many of the existing rules for registered charities now apply to RCAAAs. For example, RCAAAs are now included on a publicly available list. As a result, potential donors can easily confirm that their gifts are eligible for an official donation receipt.
The public can now request more information about an RCAAA, such as a copy of its governing documents, application for registration, notification of registration, and the names of its directors.
Before January 1, 2012, only registered charities were subject to regulatory sanctions, such as penalties and suspensions. Now RCAAAs are subject to sanctions as well. Generally, sanctions are imposed when serious non-compliance has been identified in an audit conducted by the CRA. For a list of sanctions that apply to registered charities and RCAAAs, go to Penalties and suspensions.
RCAAAs federally incorporated under Part II of the Canada Corporations Act have until October 17, 2014, to apply for articles of continuance under the new Canada Not-for-Profit Corporations Act. If a federally incorporated RCAAA needs to amend its purposes to meet the new requirements, this may be a good time to make those changes. For more information on continuance under the Canada Not-for-Profit Corporations Act, see Charities Connection No. 9.
Budget 2011 also introduced measures that affect:
- safeguarding charitable assets through good governance;
- recovering tax assistance for returned gifts; and
- granting of options to qualified donees.
As new information explaining these and other measures becomes available, it will be posted on our webpages and in future issues of Charities Connection.
- Charities Webinars are free, interactive, internet-based presentations.
- Charities Information Sessions are free face-to-face sessions offered to registered charities across Canada. Online registration for this year's sessions is now open online.
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