Canada’s Charity Directorate provides clear guidance on how to calculate fundraising costs: 

the fundraising ratio is a global calculation for a fiscal period, determined by dividing fundraising expenditures by fundraising revenue”. 

Fundraising costs should only be calculated on fundraising revenues and should exclude other sources of revenue like government funding, investment income, and business profits.

Using the charity’s annual return, the T3010, the Charities Directorate instructs charities to calculate fundraising cost ratios by

1. “add the revenue amounts from lines 4500 (receipted donations) and 4630 (fundraising revenues not reported in 4500)

2. divide the total expenditure amount on line 5020 (fundraising expenses) by the sum of lines 4500 and 4630."

Source: Section 83, Canada Revenue Agency Charities Directorate “Fundraising by registered charities”Guidance Reference Number CG-013, April 20, 2012

The CRA Charities Directorate's method is different from what the Association of Fundraising Professional suggests.

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