Yes.  CRA sets out in its Fundraising Guidance a number of factors that would make it more difficult to fundraise including the following:  1) smaller charities may be less efficient at fundraising 2) some causes have less appeal than others and 3) some fundraising activities that are tailored to donor acquisition or planned giving such as bequests may result in expenditures today while only a financial payoff many years down the road.  CRA may take into account other legitimate reasons that fundraising may be higher for a particular organization or in a particular year.

CRA’s Guidance on Fundraising provides as follows:

“In addition to considering where a charity falls within the ratio ranges, the CRA will look to the factors described in paragraphs 10 and 11 below, when it considers a charity’s fundraising activities. In addition, the CRA’s assessment of a charity’s fundraising will take into consideration the following factors:
a. The size of the charity (which might have an impact on fundraising efficiency).
b. Causes with limited appeal (which could create particular fundraising challenges).
c. Donor acquisition and planned giving campaigns (which could result in situations where the financial returns are only realized in later years).

a) The size of the charity (which might have an impact on fundraising efficiency)
The size of a charity might have an impact on fundraising efficiency. The CRA generally considers that registered charities with revenues under $100,000 have a small constituency. In these cases the CRA will consider whether the fundraising costs are reasonable given the profile of the community the charity serves or with which it works, and whether the charity can demonstrate that costs are being adequately controlled.

b) Causes with limited appeal (which could create particular fundraising challenges)
The CRA recognizes that charities that advance causes with limited appeal may encounter particular fundraising challenges. These charities could include those conducting research into the prevention and cure of an emerging disease, that is relatively unknown, and charities with causes that are less popular with the general public, such as those supporting the rehabilitation of violent offenders. The CRA may be prepared to accept some higher costs for these charities, provided these can be shown to be reasonable given the nature of the cause that the charity advances and that it can demonstrate costs are being adequately controlled.

c) Donor acquisition and planned giving campaigns (which could result in situations where the financial returns are only realized in later years)
Donor acquisition and planned giving campaigns could result in situations where financial returns are only realized in later years. The CRA recognizes that the cost of donor development represents a long-term investment on the part of a charity. Provided a charity can demonstrate that it has adopted recommended best practices (see below) for fundraising to control and reduce costs, the CRA may be prepared to accept the higher costs associated with donor development solicitations.
Donor development includes, but is not limited to, direct mail campaigns, telemarketing, and face-to-face solicitations by paid canvassers. Special events may also be a way of identifying potential donors. Returns from donor development are often not realized within the fiscal period in which the spending on development occurs. However, donor development costs should, generally, decline over time as the charity and its fundraising activities become more established.
CRA rules do not permit the attribution of fundraising expenditures to future years, or the issuance of receipts for contributions pledged for future years. Because of this, the CRA recognizes that revenue-to-cost ratios calculated within a calendar or fiscal year may not fully reflect a charity’s operations.”

To review the CRA Fundraising Guidance see “How do I find the CRA Guidance on Fundraising for Canadian charities?