A charity stages its best attended gala in years. Tickets sell out, prominent sponsors appear in photographs and the fundraising contractor reports a record gross amount. The finance committee later discovers that much of the revenue was absorbed by venue costs, contractor fees, entertainment and administration. Celebrating the headline total hasn't answered whether the campaign used the charity's resources responsibly.
The Canada Revenue Agency's guidance on fundraising by registered charities recognizes that charities need to raise money and that legitimate fundraising has real costs. It also explains factors relevant to assessing fundraising practices, including proportionality, risk of private benefit, transparency and the charity's ability to show appropriate control over its activities and resources. Those are federal charity regulation concerns, not a fixed national rule that every gala must achieve a particular cost ratio.
Full analysis is available through Binder Intelligence.