CRA confirms that it does not consider a directed gift to be a gift

Regarding the receipt of funds by a qualified donee that is a municipality from a registered charity where such funds were directed to a non-qualified donee (a non-profit organization), CRA stated:

It is our general view that donations can be received and receipted by a qualified donee such as a municipality provided the municipality retains discretion as to how the donated funds are to be spent. If a municipality is merely acting as a conduit, by collecting funds from donors, including a charity, on behalf of an organization that is legally or otherwise entitled to the funds so donated, the municipality is not in receipt of a gift.

Neal Armstrong. Summary of 1 February 2023 External T.I. 2022-0945221E5 under s. 149.1(1) – qualified disbursement.