Employee charity trust

Summary policy

Date
September 3, 2003

Reference number
CSP-E07

Key words

Employee charity trust

Policy statement

An employee charity trust is a special trust developed to administer group donations by employees in a company. The arrangement is one where the employees of a company pledge contributions to various registered charities and authorize their employer to withhold the amount pledged through payroll deductions. The amounts withheld are held in trust for the employees. The employer, as trustee, in turn remits the total amount withheld from the employees to the designated charities.

Employer operated trust

An employer operated employee's charity trust can qualify for registration as a charity. Because the employer is the sole trustee in this arrangement, the trust is designated as a private foundation.

Employer as agent for a specific registered charity

Alternatively, the employer can act as an agent for a registered charity. Where an employer agrees to act as an agent for a specific registered charity, it need not seek registered charitable status. The employer, as agent, agrees to collect donations from its employees, normally by way of payroll deduction, and remits same to the registered charity.

References

• Income Tax Regulations, C.R.C. 1978, c. 945, s. 3502