Policy priority: Direction and Control of partnerships

After longstanding sector advocacy, legislative amendments in 2021-22 have changed rules that made it difficult for charities to partner with and fund non-charities. Charities can now grant to nonprofits, individuals, grassroots organizations, and other non-charities, ensuring equity-seeking communities have greater access to these funds. 

• Prior to these legislative changes, charities were only able to work in two ways; by carrying out their own charitable activities or by making gifts to other qualified donees. ‘Qualified donees’ include registered charities, municipalities, and other entities that are able to issue donation receipts. If a charity wanted to partner with and provide resources to any entity that was not a qualified donee, direction and control rules applied.
• Having charitable or “qualified donee” status is less common for groups in some equity-seeking communities. This results in many equity-seeking groups having less access to charitable funds.
• Direction and control requirements exist in tension with Canadian international development policy and contemporary international development values (e.g., local ownership and participative and inclusive decision-making.

• Amend the Income Tax Act to enable charities to establish equal partnerships with non-charities while still ensuring accountability and transparency. This amendment became law in June 2022 thanks to collaborative advocacy from the sector.

Canada Revenue Agency, 2023

Imagine Canada, 2023

The Philanthropist, 2022

Imagine Canada and Philanthropic Foundations Canada, 2022

Imagine Canada, 2022

Special Senate Committee on the Charitable Sector, 2019 - recommendation 30

The Pemsel Case Foundation, 2015 - 2019

Cooperation Canada, 2019

Ontario Nonprofit Network, 2021

Advisory Committee on the Charitable Sector, 2021) - recommendation #1