In the June 2008 edition of the Miller Thomson LLP Charities and Not-for-Profit Newsletter, we reported on the CRA’s draft sport policy. The CRA still maintains that promotion of sport in itself is not a recognizable charitable purpose. Unless sports are an activity that furthers an organization’s charitable purposes, they may only be used in a purely incidental way.

The types of factors relevant in determining whether a charitable purpose is furthered by sports activities are: the effectiveness of particular sports in achieving a charitable purpose, public accessibility to the sports activities, and participation levels. To view CRA’s “Sports and Charitable Purposes”, please refer to the CRA’s website at

Research as a Charitable Activity

In the February 2008 edition of the Miller Thomson LLP Charities and Not-for-Profit Newsletter, we reported on the CRA’s policy on research as a charitable activity. This policy was revised on April 30, 2009. The updated policy continues to recognize research as a charitable purpose under the heads of advancement of education and other purposes beneficial to the community.

Generally speaking, the criteria governing charitable research specified in our February 2008 Newsletter still hold valid under the revised policy. The CRA stated that dissemination of charitable research does not have to be made available to the public free of charge. Any costs charged should be based on cost-recovery associated with dissemination of the research findings. The costs should still allow most people to have access to the research.

The revised policy expressly states that depending on an organization’s charitable purpose and the relevant facts, failure to fulfill all five requirements will not automatically lead to the conclusion that the organization’s research is not charitable, or recognizable as such by the CRA.

The guidance “Research as a Charitable Activity” is available on CRA’s website at

Expenses Incurred by Volunteers

On April 28, 2009, the CRA released a revised policy commentary on expenses incurred by volunteers on behalf of registered charities. This commentary is intended to clarify the Charities Directorate’s views on whether these expenses can constitute donations for the purpose of charitable receipts.

The CRA proposes that registered charities should have a policy with respect to reimbursing volunteers who incur expenses on behalf of charities. Generally, these policies should dictate both the type of expenses that are reimbursable and the proper procedure for processing reimbursement.

Instead of issuing charitable donation receipts directly for expenses incurred by volunteers, charities are encouraged to proceed under an exchange of cheques so that proper financial records are created. Therefore, where a volunteer incurs an expense on behalf of a charity, the charity should issue a cheque to the volunteer reimbursing all proper expenses. Thereafter, the volunteer may choose to write a cheque back to the charity for an equal or lesser value as a donation.

Where a charity seeks to issue an official donation receipt to a volunteer in lieu of reimbursing that volunteer’s expenses, the charity should have written authorization from the volunteer. The CRA provides the following as an example of acceptable wording for such authorization:

I (name of volunteer) direct that the funds to which I am entitled by way of reimbursement for (explanation of expense incurred), and would otherwise be forwarded to me by cash or cheque, be transferred to (name of charity) as my gift.

Where charitable receipts are issued for income tax purposes in lieu of reimbursement, the amount of the gift should be reported as both revenue and an expenditure on the Registered Charity Information Return (Form T3010).

To view CRA’s “Expenses Incurred by Volunteers”, please refer to the CRA’s website at

Applying for Registration:

The CRA has recently added new topics and sub-topics to its online information repository entitled “Applying for Registration” as a charity. These topics include:

  • • How to apply
  • • What is charitable?
  • • Describing your activities
  • • The application review process
  • • What is a governing document?
  • • Incorporation documents
  • • Constitutions
  • • Trusts
  • • Make an informed decision
  • • Advantages of registration
  • • Obligations of registration
  • • Consequences of terminating registration
  • • Types of registered charities (designations)
  • • Forms and publications
  • • Factors that will prevent an organization from being registered
  • • Other organizations that can be registered
  • • Questions and answers

To view the full content of these additions, please refer to the CRA’s website at