Who counts as a qualified donee, and what are the rules when a charity grants to a non qualified donee?
A qualified donee is one of ten kinds of organization in ITA 149.1(1), per CRA guidance CG-010: mainly registered charities, journalism organizations, amateur athletic associations and municipalities, plus the Crown and the UN. As of October 2026, a charity can also grant to anyone else if the grant furthers its purposes, is documented, and goes on Form T1441 above $5,000.
Which organizations are qualified donees, and where do you check each one?
A qualified donee is an organization that can issue official donation receipts and can receive gifts from registered charities canada.ca. The CRA's guidance CG-010 lists ten kinds. Only the Crown (Canada, a province or a territory) and the United Nations and its agencies count without being registered
canada.ca.
| Qualified donee | ITA 149.1(1) paragraph | Registered? | Where to check |
|---|---|---|---|
| Registered charity (includes a national arts service organization) | (b) | Yes | List of charities and certain other qualified donees |
| Registered Canadian amateur athletic association | (c) | Yes | List of charities and certain other qualified donees |
| Registered journalism organization | (b.1) | Yes | List of registered journalism organizations |
| Housing corporation resident in Canada for low cost housing for seniors | (a)(i) | Yes | List of low cost housing corporations for the aged |
| Municipality in Canada | (a)(ii) | Yes | List of municipalities, by province or territory |
| Municipal or public body performing a function of government in Canada | (a)(iii) | Yes | List of municipal or public bodies |
| University outside Canada whose student body ordinarily includes students from Canada | (a)(iv) | Yes | List of registered universities outside Canada |
| Foreign charity that received a gift from the federal Crown | (a)(v) | Yes | List of registered foreign charities |
| The Crown in right of Canada, a province or a territory | (d) | No | Not listed |
| The United Nations and its agencies | (d) | No | Not listed |
Every list in the last column sits on one CRA page canada.ca. The statutory wording is in the definition of qualified donee in subsection 149.1(1)
laws-lois.justice.gc.ca. That definition applies "at any time", so check the recipient's status as of the date of the gift, not the date you prepare the return.
What turns a grant to a non qualified donee into a qualifying disbursement?
Bill C-19 (Royal Assent June 23, 2022) lets a charity transfer resources to a grantee organization: any person, club, society, association, organization or prescribed entity that isn't a qualified donee canada.ca. Because the definition includes a person, an individual can be a grantee. The CRA asks charities to watch for private benefit when they grant to individuals.
Paragraph (b) of the definition of qualifying disbursement sets three conditions. The grant must further a charitable purpose of the charity, the charity must ensure it is applied exclusively to charitable activities that further that purpose, and the charity must keep documentation that shows the purpose of the grant and that the grantee used it only that way laws-lois.justice.gc.ca.
The purpose has to be one written in the charity's own governing document. A grant that advances some other charitable purpose fails, and a purpose that only says "making grants" doesn't qualify either canada.ca. The older intermediary route, where the charity keeps direction and control over the resources, is still available as a separate option.
How much due diligence does the CRA expect for each grant?
The CRA's guidance CG-032, issued December 19, 2023, says it is not law. It recommends a five step process: show how the grant furthers the charity's purposes, rate the risk, choose the accountability tools that match, apply them with the grantee, and document all of it in the books and records for the life of the grant canada.ca.
| Risk factor in CG-032 | Lower risk | Higher risk |
|---|---|---|
| Grant amount | Low: up to $5,000 | Medium: up to $50,000; high: above $50,000 |
| Nature of the resources | Charitable goods | Cash and real property |
| Duration | Short term: under two years | Long term: over five years |
| Other factors | Experienced charity and grantee, stable location, regulatory oversight | New relationship, unstable location, private benefit concerns |
The tools scale with the rating. The CRA recommends a written agreement for most grants, but not for a low risk, non recurring grant of $5,000 or less. It recommends a final written report for every grant, plus interim reports and payment in instalments for longer or higher risk grants canada.ca. The books and records themselves must be kept in Canada under subsection 230(2).
Where do gifts and grants go on the T3010?
Gifts to qualified donees and grants to grantees are reported in different places. The full return is covered in T3010 instructions.
| Line or form | What it reports |
|---|---|
| Line 2000 (question C3) | Yes if the charity made gifts to qualified donees or other organizations |
| Form T1236 | Each organization that received a gift: name, BN, city, non cash amount, total |
| Line 5050 | Total gifts to qualified donees, including designated gifts |
| Line 5840 | Yes if the charity made any grant to a non qualified donee |
| Line 5841 | Yes if any one grantee received more than $5,000 in total |
| Form T1441 | Each grantee over $5,000, with each grant listed |
| Line 5842 | Number of grantees that received $5,000 or less each |
| Line 5843 | Total granted to those grantees |
| Line 5045 | Total of all grants to non qualified donees |
The line instructions come from guide T4033 canada.ca. Form T1236 is the qualified donees worksheet, filed with the annual return
canada.ca. For a grantee over $5,000, section 3703 of the Income Tax Regulations requires the grantee's name, the purpose of each grant and the total for the year, and Form T1441 also asks for each country where grant activities happen outside Canada
canada.ca. That information is public, though a charity can ask for confidentiality if disclosure would put someone in danger
canada.ca.
Worked example: in one fiscal period a charity gives $20,000 to another registered charity and grants $12,000 to a community group, $4,000 to a second group and $3,500 to a third. Line 2000 is yes, T1236 lists the registered charity, and line 5050 is $20,000. Line 5840 is yes, line 5841 is yes, and T1441 lists the $12,000 grant. Line 5842 is 2, line 5843 is $4,000 + $3,500 = $7,500, and line 5045 is $12,000 + $7,500 = $19,500. Under CG-032 the $12,000 grant sits in the medium band, so a written agreement and a final report are expected. Both totals also count toward the disbursement quota on Schedule 8, lines 850 and 855 canada.ca.
Which edge cases catch charities out?
The 50% cap for charitable organizations. Gifts of a charitable organization's income to qualified donees above 50% of its income for the year are not qualifying disbursements, unless the recipient is a registered charity the Minister has designated in writing as associated laws-lois.justice.gc.ca. A charitable organization with $200,000 of income that gives $130,000 of it to an unassociated charity has $30,000 that isn't a qualifying disbursement.
Gifts with strings. Under paragraph 168(1)(f), the CRA can revoke a charity that accepts a gift expressly or implicitly conditional on passing it to a particular grantee. Keep authority over the money and tell donors so canada.ca.
Charity to charity gifts don't get receipts. The recipient reports the amount on line 4510 of its own T3010 and must not issue an official donation receipt for it canada.ca. For what a valid receipt needs when one is due, see official donation receipt requirements.
Foreign charities. A charity abroad is a qualified donee only while it is registered under subsection 149.1(26) after receiving a gift from the federal Crown, or if it is a registered university outside Canada laws-lois.justice.gc.ca. Everyone else abroad is a grantee, so the CG-032 process and T1441 reporting apply.
Sources
Is a nonprofit organization a qualified donee?
No. A nonprofit exempt under paragraph 149(1)(l) isn't in the 149.1(1) definition, so it can't issue official donation receipts, and a charity's transfer to it is a grant to a grantee laws-lois.justice.gc.ca. See non profit organization tax for how those organizations are taxed. A nonprofit may also have to file the T1044 information return.
Does a grant of $5,000 or less still need a written agreement?
Not always. The CRA says a written agreement isn't needed for a low risk, non recurring grant of $5,000 or less, but the charity still needs documentation showing the purpose and that the money went to charitable activities canada.ca. On the T3010 it only adds to the count on line 5842 and the total on line 5843.
What happens if a grant fails the qualifying disbursement test?
It can put the charity's registration at risk. CRA responses run from education letters and compliance agreements to sanctions and, in serious cases, revocation canada.ca. A failed grant also doesn't count toward the disbursement quota, which for a charitable organization counts only charitable activities and qualifying disbursements under paragraph 149.1(2)(b)
laws-lois.justice.gc.ca.
Do my client's donations to a qualified donee all earn the credit?
Yes, if the donee issues an official donation receipt and your client claims the eligible amount. The credit math, the 2026 rates and the 75% of net income limit are on charitable donation tax credit.
General information for the tax year shown, not advice for a specific client. Confirm the facts before you file or remit.