Rules
Cross-border giving, how Canadian charities can engage US donors legally
Cross-border giving Canadian charities can pursue US donors legally, but CRA receipting, IRS rules, and the 1980 treaty all shape what is allowed.
What to take away
- A Canadian registered charity can accept gifts from US donors. Registration under the Income Tax Act is what matters, not the donor's address.
- Most US donors cannot deduct that gift on a US return. The IRS does not treat your registration as 501(c)(3) status.
- Two routes create a deductionthe Canada-U.S. Income Tax Convention (1980), which works only against Canadian-source income, and a US 501(c)(3) intermediary or donor-advised fund.
- Roughly 40 states and the District of Columbia require registration before you ask their residents for money. Your T3010 must also name any donor whose gifts exceed $10,000 in the year.
Accepting US gifts and receipting them
Accepting is allowed. A registered charity can take a gift from any country, and no US bank account, board or address is required.
Two conditions decide whether a payment is a gift. The transfer must be voluntary, and the donor must receive nothing back. Cash, securities and other property qualify, recorded at fair market value on the date of receipt. Check your constating documents, since a trust deed can restrict the source of gifts.
An official receipt is required for gifts of $10 or more. Keep a duplicate of each and hold records for at least two years after the end of the tax year they cover.
The receipt must show your legal name and address, your CRA registration number, a serial number, the gift date, the amount, the donor's name and address, the place of issue and the signature of an authorized person. The CRA charitable receipting rules every Canadian donor campaign must follow works through those fields with worked figures.
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Official donation receipt must show
- Charity name and address
- Charity registration number
- Serial number and date received
- Statementofficial receipt for income tax
- Donor name and address
- Amount or property fair market value
A pledge cannot be receipted, and neither can a gift in kind you cannot value. Issue a receipt for something that is not a gift and the CRA can suspend your registration.
Routes to a US deduction, compared
The IRS does not treat a Canadian registered charity as a 501(c)(3). Separate the routes below before you tell a US donor anything.
Routes to a US deduction
Who gets the receipt
- Direct gift to a Canadian charity
- The Canadian charity
- Gift applied against Canadian-source income
- The Canadian charity
- Gift to a US friends fund or grantmaker
- The US 501(c)(3)
- Grant from a US donor-advised fund
- The DAF sponsor
US deduction?
- Direct gift to a Canadian charity
- No, unless the treaty applies
- Gift applied against Canadian-source income
- Yes, under Article XXI of the 1980 Convention
- Gift to a US friends fund or grantmaker
- Yes
- Grant from a US donor-advised fund
- Yes, when the donor pays into the fund
Article XXI of the Canada-U.S. Income Tax Convention (1980) lets a US resident deduct a gift to a Canadian charity, but only against income from Canadian sources. A donor with a Canadian pension or rental income may qualify. One with no Canadian-source income cannot. The CRA's summary policy on the Canada-U.S. convention sets the conditions.
Registering to solicit in US states
Ask a state resident for money and you normally have to register with that state's charity office. California, New York, Florida, Pennsylvania, Illinois and Washington are among the states that enforce this.
The ask triggers it, not the money. Direct mail, a paid fundraiser, an email or a donation page residents can reach all count. State charity offices and state privacy rules both follow the donor's address, so the state donor privacy checklist is worth reading before you build a US suppression list.
Thresholds differ, and several states exempt charities below a set figure of gross contributions, commonly between $25,000 and $100,000. Most filings start with the Unified Registration Statement, a single form most states accept. Renewal is annual, often within four and a half months of fiscal year end.
Example: a $25,000 grant through a US donor-advised fund
Example: a $25,000 grant
- A US donor recommends a $25,000 grant from an account at Fidelity Charitable, Schwab Charitable or Vanguard Charitable, and claims the deduction at that point.
- The sponsor reviews you, asking for the CRA registration number, the latest T3010, a program description and proof the funds stay in charitable use.
- The sponsor pays the grant, often restricted to a named program.
- You issue the official receipt to the sponsor. Send the individual a thank-you letter, never a Canadian tax receipt.
Friends funds and the terms the CRA expects
A US friends fund is a separate 501(c)(3) built to support one Canadian charity, and a cross-border grantmaker such as CAF America or GlobalGiving grants after its own review. Donor-advised funds sit inside sponsors and community foundations.
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Routing a deductible US gift
- US donor gives to US 501(c)(3) or donor-advised fund
- US charity keeps discretion and control
- US donor receives receipt from US charity
- US charity grants to Canadian charity
- Canadian charity receipts the US fund, not the donor
The CRA does not treat a US 501(c)(3) as a qualified donee, so you cannot simply send it money. Funds you pass out must be spent as your own activity under a written agreement that gives you direction and control.
The CRA's guidance on activities outside Canada lists the terms. They include the charitable purpose, the amount and timing, use of funds only for that purpose, reporting duties, return of unused funds and access to the intermediary's records.
T3010 reporting and the $10,000 donor threshold
File within six months of fiscal year end. Section D reports the total eligible amount of gifts for which you issued receipts, and Schedule 2 asks whether you carried on activities outside Canada.
The return also requires the names of donors whose gifts exceeded $10,000 in the fiscal year, unless the gift was anonymous. That test runs on amount, not residence, so a US donor who crosses it is listed like anyone else.
Privacy and email rules that bind you
PIPEDA covers private-sector organizations, and Quebec's Law 25, British Columbia's PIPA and Alberta's PIPA apply in those provinces. State breach notification laws apply to any holder of personal information, so a US donor's data sits under both sets of rules.
CASL follows the sender. A message sent from Canada has a real and substantial link to Canada even when the reader sits in Ohio. Where a registered charity raises funds, consent is not required, but identification and unsubscribe duties remain. The CASL consent rules for nonprofit email covers list building under that split.
US recipients also fall under CAN-SPAM, which requires accurate headers, a physical postal address and an opt-out honoured within 10 business days, as the FTC CAN-SPAM compliance guide explains.
