Submission to the Government of Canada RE: ‘Registered charities making grants to non-qualified donees’

The 2022 Federal Budget introduced a new framework for partnerships in the charitable sector called “qualifying disbursements.” It allows registered charities to make “qualifying disbursements” to both qualified donees and non-qualified donees (NQDs), provided certain requirements are met. The Canada Revenue Agency released their draft guidelines for grants to NQDs on November 30, 2022 for feedback by January 31, 2023.

The amended legislation, which these guidelines are for, represent historic and important efforts by civil society to create a level playing field between charities and nonprofits that provide public benefit and often serve communities inadequately supported by philanthropy. It is critical that the guidelines reflect these efforts and advance our shared intentions. We are at a defining moment to ensure the realization of fairness, equity and equality of opportunity in the regime governing the activities of charities and their work to advance the common good.

PFC has reviewed the guidelines and we have engaged our network to understand them and solicit feedback.

Summary of Recommendations:

RECOMMENDATION 1 – Amend problematic language vis-a-vis risk, public benefit, grant versus gift, and monitoring and reporting.

RECOMMENDATION 2 – Limit recommendations and focus on requirements (that funds are applied to charitable activities in furtherance of a charitable purpose, and reasonable documentation is maintained).

RECOMMENDATION 3 – Clarify uncertain requirements (related to charitable objects, disbursement quota, non-monetary resources, and PRI).