There is no standard Canadian foundation form. Formats vary, but every foundation works under the same Canada Revenue Agency (CRA) rules: what your organization is in law, who the foundation may fund, and what it must report. Get those right and a grant proposal template for Canada becomes easy to fill.
Registered charity or non-profit
The CRA's comparison page sets out the differences:
| Registered charity | Non-profit organization (NPO) | |
|---|---|---|
| Purposes | Exclusively charitable | Social welfare, civic improvement, pleasure, sport, recreation or any purpose except profit |
| Registration | Must apply to the CRA | Not registered with the CRA |
| Donation receipts | Can issue them | Cannot issue them |
| Annual return | Form T3010 | May have to file Form T1044 and/or a T2 or T3 return |
| Spending requirement | Yes | None |
State your status in the first lines of every proposal, and never call your organization a charity unless it is registered.
Qualified donees and qualifying disbursements
A registered charity, including a foundation, can make gifts to qualified donees, such as other registered charities. An incorporated non-profit that is not a registered charity is not a qualified donee.
Since amendments to the Income Tax Act in 2022, a charity can also make a qualifying disbursement to a grantee organization that is not a qualified donee. CRA guidance CG-032, Registered charities making grants to non-qualified donees (issued December 19, 2023), explains the rules. The funder must make sure the grant furthers one of its own charitable purposes and is used exclusively for charitable activities, and must keep documentation of the grant's purpose and use.
CG-032 describes grants up to $5,000 as low risk, over $5,000 to $50,000 as medium risk and over $50,000 as high risk, and asks funders to match accountability to risk: expect a written agreement, reports with receipts or other supporting documents, and separately tracked funds. If a charity gives your organization more than $5,000 in a tax year, it reports your name, the purpose of each grant, the amount and the location on its public T3010.
The disbursement quota, as context
Registered charities must spend a minimum each year on their own charitable activities or on qualifying disbursements. The CRA calculation page sets this disbursement quota at 3.5% of the average value of property not used in charitable activities or administration up to $1 million, and 5% on the amount above $1 million, averaged over the previous 24 months. Charitable organizations calculate it only above $100,000 of such property, and foundations above $25,000. It explains why endowed foundations grant every year, but obliges no foundation to fund you: keep it out of your proposal.
Finding the right foundations
| Where to look | What you learn | Cost |
|---|---|---|
| CRA List of charities | A foundation's designation and public T3010 information, including Form T1236, which lists amounts provided to other organizations | Free |
| Community Foundations of Canada | Its network of 206 community foundations, to find yours | Free |
| Imagine Canada Grant Connect | A searchable funder database, priced by your annual revenue; libraries, schools and resource centres can offer a Community Edition | Paid |
| Foundation websites | Current priorities, deadlines, and whether non-qualified donees can apply | Free |
Look at gifts to organizations of your size, not the largest gift.
How to structure the proposal
Many foundations want a short letter of inquiry first: the amount, the project, your status and registration number, the need and the budget. For a full proposal, a sound order is:
- Summary table and executive summary
- Organization profile and governance
- The need and who benefits
- Populations experiencing barriers
- Project description, objective and work plan
- Anticipated results and evaluation
- Budget summary and other funding
- Sustainability
- Accountability, for non-profits that are not qualified donees
The Canada Foundation Grant Kit's CA_Foundations_Proposal_TEMPLATE.docx follows this order, with a letter of inquiry in the same file.
Budgeting HST net of your rebate
Registered charities can usually claim the public service bodies' rebate on Form GST66. For a charity resident only in Ontario, CRA info sheet GI-176 sets the rebate at 50% of the federal part and 82% of the provincial part of the HST, where Ontario HST is 13%. Show only the tax you cannot recover, on its own line. Our own arithmetic, not a CRA figure: an Ontario charity claiming the rebate and unable to claim input tax credits on an expense is left paying about 3.94% of the pre-tax cost in tax. Rates differ by province, so check yours.
General information: this article is general information, not legal, tax or fundraising advice. No template can guarantee funding. Always follow each foundation's own guidelines.
The Funder File is not affiliated with, endorsed by or connected to the Canada Revenue Agency, Community Foundations of Canada or Imagine Canada.
Sources
- CRA: Difference between a registered charity and a non-profit organization
- CRA: CG-032, Registered charities making grants to non-qualified donees
- CRA: Disbursement quota calculation
- CRA: Information available to the public from a T3010 return
- Community Foundations of Canada
- Imagine Canada: Grant Connect
- CRA: GI-176, Public service bodies' rebate for charities resident only in Ontario
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