Standard B13 Explained

What are considered fundraising activities? The CRA considers any activity that involves asking for support to be fundraising, unless it satisfies The Substantially All Test.1

The Substantially All Test: If substantially all (90% or more) of an activity is not asking for support, the CRA recognizes that this activity would have occurred regardless of asking for support. Costs for these activities do not need to be considered fundraising costs.

Example: The Substantially All Test is Met:2 The executive director of a charity gives a speech about a charity's research findings to a group of stakeholders with an interest in the research. The speech concludes with contact information and a brief invitation to learn more about the charity's work, or if audience members choose, make a donation. In this case, the substantially all test has been met and none of the costs of the speech (for example, the executive director's time and travel) have to be treated as fundraising expenditures.

Example: The Substantially All Test is Not Met: A charity’s initial or home page on its Web site is used extensively to solicit donations or provide information on giving opportunities. Program and other information about the charity only appear after this material. The prominence of the fundraising materials relative to the other content means it will be considered to represent more than 10% of the activity. In this situation the “substantially all test” is not met.2

Pro-rated allocation of costs to fundraising and other expenditures: The CRA recognizes that some activities represent both fundraising and other costs, for instance management/administration expenses. In order for expenses to be pro-rated, the charity must be able to demonstrate that less that 90% of the activity in question advances the organization’s fundraising goals.2 To decide whether it is possible to pro-rate expenses, CRA advises charities to separate fundraising from other content and consider:2

  • the proportion of charitable, fundraising, management/administrative, or political content within the activity;
  • the resources devoted to charitable, fundraising, management/administrative, or political content (employee and volunteer time, financial, and property); and 
  • the prominence of the fundraising content in the activity.

Why do costs associated with fundraising activities need to be disclosed? By law, all registered charities must report all costs related to fundraising on their T3010. The Canada Revenue Agency states that charities must be transparent regarding their fundraising costs, revenues, and practices, warning that failure to accurately disclose this information may indicate that fundraising activities have been illegal or deceptive.2

What types of expenses need to be disclosed? The following table3 from Imagine Canada indicates the kinds of activities that must be recorded as fundraising costs. This is a useful tool for helping you to know what sorts of fundraising costs need to be disclosed.

Type of activity Amount to record as fundraising costs
Fundraising activities (any activity that includes asking for support, unless you can show that the activity would still have taken place without asking for support), including:
  • planning, researching, or preparing to ask for support;
  • profile raising, donor stewardship, and donor recognition; and
  • sales of goods or services (except as part of a related business).
All costs must be recorded as fundraising costs

Activities that include asking for support but that would still have taken place without asking for support, where:

  • "substantially all" of the activity is not fundraising;
  • the "four-part" test is met.
  • No costs need to be recorded as fundraising costs. 
  • A portion of the costs need to be recorded as fundraising costs.
Activities that would not have taken place without asking for support but that include charitable activities designed to prompt an action or change a behaviour. A portion of the costs need to be recorded as fundraising costs.
All other activities that include asking for support. All costs must be recorded as fundraising costs.

From "Accreditation Preparation Workbook Section B: Financial Accountability & Transparency,"  Katharine Zywert, Social Prosperity Wood Buffalo at the University of Waterloo, 2013.

  1. “What activities are fundraising?” Imagine Canada’s Charity Tax Tools.
  2. “Fundraising by Registered Charities,” Canada Revenue Agency, April 20th 2012.
  3. “Recording fundraising costs,” Imagine Canada’s Charity Tax Tools.

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