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Small and Rural Charities Initiative

The Canada Revenue Agency (CRA) recognizes that small and rural charities make significant contributions to the well-being of their communities and to all Canadians through their dedication and service. The CRA also understands that small and rural charities face unique challenges that may constrain their ability to meet their regulatory obligations under the Income Tax Act. In particular, small and rural charities have limited resources and rely mostly, if not solely, on volunteers to carry out their activities.

The Small and Rural Charities Initiative was undertaken to gain a better understanding of these challenges, thereby improving services and processes and reducing the administrative burden for small and rural charities. This initiative reflects the CRA's commitment to transparency and to the reduction of the administrative burden for the charitable sector.

The first phase of the Small and Rural Charities Initiative consisted of six one-day workshops in October 2007 with participants representing a cross-section of the small and rural charities. The workshops were held in Toronto (October 3), Saskatoon (October 11), Lethbridge (October 13), Kelowna (October 15), Trois-Rivières (October 19), and Moncton (October 24).

The workshops were open forum and designed to allow participants to share their experiences, their best practices, and their concerns with the CRA. The workshop discussions included:

• Education - assessment of information provided in publications, on the Web site, and in the information sessions to determine if it is comprehensive and understandable.
• Reporting - discussion of annual returns, forms and obligations.
• Registration - application, model objects.
• Service delivery - telephone and correspondence services and standards.
• Compliance and enforcement - educational letters, compliance approach, compliance agreements, audits, sanctions, revocations, and barriers to compliance.
• Tools - frequently asked questions, checklists or other tools that could assist charities, electronic forms, etc.
• Rules - identify which rules, whether based in legislation, regulation, or policy, are too complex, misunderstood, or pose compliance challenges.

The second phase of the Small and Rural Charities Initiative consisted of three meetings with nine panel members who participated in the first phase. Brian McCauley, the Assistant Commissioner of the Legislative Policy and Regulatory Affairs Branch, chaired the panel which met in November and December 2007 to review and validate the outcomes of the first phase and work collaboratively to develop a joint action plan for the Minister of National Revenue.

The action plan contains 16 main action items divided into the following 6 themes:

• provide tailored services to the sector;
• reduce compliance burden;
• improve awareness and access to information;
• provide educational tools;
• lead collaborative initiatives with federal, provincial and territorial partners; and
• advance sector roles and responsibilities.

The panel's final report, including the joint action plan, is available on the CRA Web site at www.cra.gc.ca/charities. You can also request a copy of this report by calling the Charities Directorate at 1-800-267-2384.

Profile of small and rural charities

For the purposes of the Small and Rural Charities Initiative, small charities are defined as registered charities with total revenues under $100,000, as reported annually on Form T3010A, Registered Charity Information Return. Rural charities are registered charities that have a postal code where the second character is a "0," for example, K0A 1A1 (coding used by Canada Post to identify rural areas).

Small and rural charities depend more on earned income from non-government sources and donations than on government funding. Small and rural charities also tend to have few, if any, employees and rely mainly on volunteers to deliver their services, leading to concerns for both retention and recruitment.

In 2006, there were 83,372 registered charities in Canada. Small charities accounted for 54% and rural charities accounted for 22% of all registered charities. In all, 14% of charities met the definitions of both small and rural charities.

This document is also available for download in PDF format.

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Date modified:

2014-12-03