What is a qualified donee?

The phrase comes up in two places. On a receipt, where it explains why the gift is tax-creditable. And in a foundation or donor advised fund's rules, where it explains why some grants are easy and some are not.

Who is on the list. The Income Tax Act names the categories, and the CRA keeps a public list for most of them:

• Registered charities, including registered national arts service organizations
• Registered Canadian amateur athletic associations
• Registered journalism organizations
• Registered housing corporations providing low-cost housing for the aged
• Canadian municipalities, and municipal or public bodies performing a function of government
• Registered universities outside Canada that ordinarily have Canadian students
• Foreign charities that have received a gift from the Crown, for a limited period
• The federal, provincial and territorial governments
• The United Nations and its agencies

Why it matters to a funder. A registered charity, which includes every public foundation and every donor advised fund sponsor, can make a gift to any qualified donee with no further conditions. Giving to anything else, a community group that never registered, a foreign charity, a social enterprise, is possible but takes a different route: either the charity keeps direction and control over how the money is used, or it makes a grant under rules that came into effect in 2023 and reports it separately. Both are real work, and many foundations simply decline.

So when a donor asks why their fund cannot support a group they admire, the answer is usually that the group is not a qualified donee. The fix is on the group's side, by registering, or on the foundation's side, by taking on the extra steps. Whether a foundation offers the second is a fair question to ask it.

Questions people also ask

What is the difference between a non-profit and a charity?

A non-profit is any organization that does not operate for the gain of its members, from a hockey league to a professional association, and it pays no income tax. A charity is a non-profit whose purposes are charitable at law and that has applied to the CRA and been registered. Only the registered charity can issue donation receipts. Most Canadian non-profits are not charities, and calling something a non-profit says nothing about whether a gift to it is tax-creditable.

Can a donor advised fund give to a foreign charity?

Only if the foreign organization is a qualified donee, which is rare, or if the sponsoring foundation takes on the direction and control or grant rules. Most sponsors either have a process for this or do not do it.

Is a municipality a qualified donee?

Yes. Canadian municipalities can issue receipts, and a foundation can grant to one.

Where do I check?

The CRA's List of charities and other qualified donees has separate listings for each category.