Associated status for unrelated charities

Policy commentary

Release date
February 26, 2007

Reference number
CPC-028

Subject

Associated status – Unrelated charities can be granted associated status in order to undertake a joint venture

Purpose

To clarify the Directorate's policy regarding associated status.

Definitions

Associated charities: Associated charities are two or more registered charities that have applied for and received this designation from us. Associated charities can pass funds among themselves without being affected by the usual limitation placed on gift making by charitable organizations.

Joint venture: Two or more entities pooling their resources to accomplish a specified purpose or to establish and operate a charitable program.

Commentary

1. A registered charity can be designated as associated with one or more specified registered charities to undertake a joint project (for example, construction of an art centre).

2. Two or more registered charities that are normally unrelated may form a relationship by agreement to undertake a joint project. In this case the Canada Revenue Agency must receive complete details on how the project will operate, how each of the registered charities will participate to achieve the common goal and the duration of project.

3. The designation as associated charities will be in effect for the duration of the joint venture.

4. If the joint project is not completed within the time frame specified, the charities can request an extension to their associated status.

5. If the joint project is completed prior to the expiration of the associated status, the charities should request revocation of their associated status.

References

• Form T3011, Application for Designation as Associated Charities
• Information circular IC77-6R, Registered Charities: Designation as Associated Charities
• Guidance CG-002, Canadian registered charities carrying on activities outside Canada
• Income Tax Act, R.S.C. 1985 (5th supp.) c. 1, ss. 149.1(6) and (7)