Navigating the world of charity grants can be complex, especially when it comes to understanding the rules and regulations set by the Canada Revenue Agency (CRA). In this post, we’ll break down the CRA’s guidelines in a way that’s easy to understand for anyone interested in how charities manage their funds.
What Charities Can and Can’t Do with Their Grants
In Simple Terms:
Charities must use their grant money to support activities that match their main goals. Think of it like this: If a charity is set up to support education, it should use its grant money for educational activities, not for something unrelated like sports.
CRA’s Advice:
Charities should check if their main goals need to be updated to match what they want to do with their grants. If a grant doesn’t help achieve their main goals, they shouldn’t use it.
Making Sure the Money is Spent Right
In Simple Terms:
Charities need to be careful and make sure that the grant money is used only for the right reasons – the ones they said it would be used for.
CRA’s Advice:
The CRA knows it’s not always easy to track every dollar, so they suggest being as careful as possible. Depending on how risky the grant is, charities might need to pay more or less attention to where the money goes. The CRA has some tips and tools to help with this.
Keeping Good Records
In Simple Terms:
Charities need to keep detailed records of how they spend their grant money. This is like saving receipts to show where every penny went.
CRA’s Advice:
The CRA says it’s important to keep records that show what the grant was for, that the money was used for that purpose, and that the charity did its best to make sure of this. The more risky the grant, the more detailed the records should be.
What This Means for Charities
Stay True to Your Goals: Always use grants for activities that match what your charity is all about.
Be Careful with Money: Use the grant money wisely and keep an eye on where it’s going.
Keep Detailed Records: Save documents and notes showing how every grant penny was spent.
The CRA’s rules for charity grants help make sure that charities use their money in the best way possible, staying true to their goals and being responsible with their funds. Understanding these rules is crucial for charities to do their work effectively and maintain trust with the public.
Remember, this post is a simple overview. Charities should always refer to the CRA’s full guidelines for detailed information.
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Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.
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