A Canadian charity’s activities, when carried out by an intermediary, must be distinguishable from the intermediaries activities and in some cases a Canadian charity should ensure that its intermediary segregates its funds.

In CRA’s Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada” it notes:

“5.7. What are separate activities and funds?
When carrying on an activity through an intermediary, a charity has to make sure that it can distinguish its activities from those of the intermediary. A charity cannot simply pay the expenses an intermediary incurs to carry on the intermediary’s own programs and activities. Doing so draws into question whether the activity is truly that of the charity.
For certain types of arrangements (for example – an agency agreement) the charity’s money for the activity should be kept in a separate bank account, and taken out only after appropriate authorizations are made by the charity or performance benchmarks are met by the intermediary. Segregated funds should also be reported in books and records separately from those of the intermediary.  If funds cannot be kept separate, then a charity should be able to provide other evidence to distinguish its own resources and activities, and of direction and control over them.”

For more information on the CRA Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada” (Reference number CG-004) see:
https://www.canadiancharitylaw.ca/index.php/blog/category/using_intermediaries_in_canada/ or
http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cgd/ntrmdry-eng.html