Regarding a situation where a municipality that is a qualified donee issued a press release in which it solicited donations that were redistributed to a specific fund (not part of any program operated by it) for individuals following an unfortunate event, CRA stated:
It is our general view that donations can be receipted by a municipality in Canada on behalf of a program or entity which operates under the authority of the municipality (e.g., a committee established by a municipal bylaw) provided the municipality retains discretion as to how the donated funds are to be spent. If a municipality is merely collecting funds from donors that will simply be redistributed to a person or organization that is not a qualified donee and the latter is legally or otherwise entitled to the property so transferred, the municipality is not in receipt of a gift and cannot issue a donation receipt. In that case, the municipality is merely acting as a conduit for the other person, and it is our view that amounts received by the municipality on behalf of the other person do not qualify as gifts to a municipality … .