CRA has recently released a new guidance called “Canadian Registered Charities Carrying out Activities Outside Canada”. Although the name suggests “foreign activities” this document deals with a lot more than foreign activities. It covers the relationship between a Canadian charity and any non-qualified donee, whether in Canada or abroad. If a Canadian charity has dealing with, for example, a non-profit that does not have Canadian registered charity status then the same rules apply as to a Canadian registered charity dealing with a foreign entity. Essentially, almost all organizations outside of Canada are non-qualified donees. If you are going to transfer resources to them you need to maintain “direction and control” over those resources. This document helps a Canadian charity understand what is required for direction and control. Failure to maintain direction and control can result in a 105% penalty of the amount transferred and/or revocation of charitable status.


Who should be reading and understanding the guidance?  The main groups are:
a) registered charities that conduct foreign activities;
b) registered charities that work with intermediaries in Canada that are not qualified donees; [update – you can see CRA’s new guidance or policy CRA’s new Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada”
c) professional advisors, such as lawyers, accountants, who advise charities.

Here is a bigger font PDF version of the guidance “Canadian Registered Charities Carrying out Activities Outside Canada”.  This is easier to read, download, highlight and comment on. Guidance_for_Canadian_Registered_Charities_Carrying_Out_Activities_Outside_Canada_-_July_8,_2010.pdf

For those that are interested here is a sample contractor agreement for a Canadian registered charity conducting foreign activities   I prepared it for the Capacity Builders Charity Law Information Program (CLIP) and it is listed under “Resources”.  As well here is a copy on my website:,_2010.pdf

As well, here are some other resources on foreign activities that I have prepared that may be of interest:

Conduit vs. Structured Arrangement:

Foreign Contractors of Canadian Registered Charities Carrying out the Canadian Charity’s Projects – A Very Simplified View of the Process

Here is an article I wrote in The Philanthropist on foreign activities:

Here are three one hour webinars I have prepared on foreign activities by Canadian charities:

Here are the individual webinars (they are free and 1 hr in length)
Foreign Activities 101: Introduction to Canadian charities carrying out foreign activities

Foreign Activities 201: Advanced issues with CRA’s Guidance on Activities outside of Canada

Foreign Activities 301: Responding to Legal and Ethical Challenges in International

Other webinars from the Charity Law Information Program including some on foreign activities:

Here is the section of the (TM) website on global giving:

Here is the short link for the page “CRA’s new Guidance on foreign activities by Canadian charities”

In 2011 CRA released a guidance entitled “Using an Intermediary to Carry out a Charity’s Activities within Canada”  It is very similar to the foreign activity guidance except it deals with Canadian charities dealing with non-qualified donees in Canada.