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Published | Category : GST and QST

Third-Party Fundraising

This article discusses third-party fundraising for the benefit of a registered charity as defined under the Income Tax Act (for the GST) and the Taxation Act (for the QST).

In this article, the term “third-party fundraiser” refers to a person that is not a registered charity (and is therefore neither a charity nor, in some circumstances, a public institution for GST and QST purposes), and that is operated for the sole purpose of raising funds on behalf of a registered charity. The information in this article does not apply to fundraising conducted by a registered charity.

Generally, fundraising by its very nature is considered a for-profit activity. Organizations that are established and administered for the sole purpose of raising funds are not considered non-profit organizations for GST and QST purposes. This is the case even if all the funds collected are donated to a registered charity. Such organizations do not meet the “operated solely for a purpose other than profit” requirement in the definition of “non-profit organization.”

For more information on the definition of “non-profit organization” for GST and QST purposes, see GST/HST Policy Statement P-215, Determination of whether an entity is a "non-profit organization" for purpose of the Excise Tax Act (ETA).

A third-party fundraiser may make supplies of property or services in the course of a fundraising activity or event. As a rule, such supplies are taxable, even if the funds collected are donated to a registered charity.

Examples of taxable supplies that may be made by a third-party fundraiser include:

  • admissions to a fundraising dinner or ball;
  • entry in a golf tournament;
  • promotional services provided to sponsors of a fundraising event;
  • goods sold as part of a fundraising campaign (such as T-shirts or chocolate bars);
  • food and beverages sold at a concession stand during a fundraising event;
  • tickets to professional performances.

Ticket sales to performances or athletic or competitive events are exempt from the application of the GST and QST if 90% or more of the performers, athletes or competitors are not paid directly or indirectly for their participation. Government and municipal grants, reasonable amounts remitted as prizes, gifts, or allowances for travel or for other incidental expenses are not considered remuneration. In addition, the performance or event cannot be advertised as featuring paid participants.

The admissions will not be exempt if they are for competitive events where paid participants compete for cash prizes.

Where the third-party fundraiser makes a supply as agent of a charity, the supply has the same tax status as if it were made by the charity directly. For more information on whether a person is acting as agent in making a transaction on behalf of another person, see GST/HST Info Sheet GI-012, Agents.

If registered for GST and QST purposes, the third-party fundraiser must collect these taxes on taxable supplies and remit the amounts collected to us. The fundraiser can claim input tax credits and input tax refunds for the taxes paid on purchases related to its taxable supplies. A person must register for GST and QST purposes if the person makes taxable supplies in Québec and is not a small supplier.


A group of concerned citizens forms an association to raise money for charitable organizations in their community. Each year the association holds a golf tournament where the funds raised are donated to a registered charity. The association does not have any other activities. The association solicits sponsorships from local businesses, in exchange for which the association will place the businesses' logos on all tournament signage and on the tournament website. Does the association need to charge GST and QST on the funds received from sponsors and on the tournament entry fees?

The association is not a non-profit organization for GST and QST purposes as the association is not operated for a purpose other than profit. The association is making taxable supplies of promotional services to the sponsors of the tournament. The association is also making taxable supplies of the right to play in the tournament. Therefore, if the association is a registrant, it must collect and remit to us GST and QST on the sponsorships and the tournament entry fees.

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