Regarding the receipt of funds by a qualified donee that is a municipality from a registered charity where such funds would then be directed to a non-qualified donee, being a non-profit organization, CRA, after noting that qualifying disbursement of a charity was defined in s. 149.1(1) to include a gift to a qualified donee, such a municipality in Canada registered by the Minister, stated:
It is our general view that donations can be received and receipted by a qualified donee such as a municipality provided the municipality retains discretion as to how the donated funds are to be spent. If a municipality is merely acting as a conduit, by collecting funds from donors, including a charity, on behalf of an organization that is legally or otherwise entitled to the funds so donated, the municipality is not in receipt of a gift.