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April 18, 1977
1. Subsection 149.1(6) of the Income Tax makes provisions for a charitable organization to gift any portion of its income to "associated charities". The purpose of this circular is to outline the circumstances under which registered charities may be designated as being associated with other registered charities. Such designation may be made, pursuant to subsection 149.1(7) of the Act, on application.
Relationship between Registered Charities
2.(a) Before consideration will be given to designating registered charities as associated for the purpose of the Income Tax Act, there must be a definite relationship in existence between the organizations desiring such designation.
(b) A relationship may be in one of several forms. For example, a provincial body with branches or chapters under its supervision is related by constitution to those branches or chapters. Churches have doctrinal as well as constitutional relationships with their parishes or congregations. Furthermore, two or more normally unrelated charities may form a relationship by agreement to undertake a joint project. In this case the Department must receive complete details of how the project will operate and how each of the registered charities will participate to achieve the common goal.
Application Procedure
3.(a) Registered charities desiring designation of assocation for the purpose set out in 1 above must file one copy of form T3011, Application for Designation as Associated Charities, with the Department of National Revenue, Taxation at the address shown on the form.
(b) Part I of the application is for the use of a national, provincial or regional body desiring designation of association with each of its branches, sections, parishes, congregations or divisions which are also registered charities. If such an approval is granted, each registered charity listed in the application will be designated as a charity associated with each of the others in addition to being designated as a charity associated with the main body.
(c) Part II of the application is to be completed where two individual registered charities desire designation as associated charities. The information requested in the application must be completed in detail and the form is to be signed by a senior official of each of the registered charities.
Revocation of Designation
4.(a) Registered charities may only be designated as being associated with other registered charities. Should the registration of one of a group of charities (which have been designated to be associated) be revoked, the designated association between the revoked charity and the other charities in the group will be revoked as of the date of revocation of registration.
(b) The Minister may also revoke the designation of association where he feels that such designation is no longer justified or where it is evident that the privilege of the designation has been abused.