Using new tax code provisions to fund organizations in Israel

Background image of the side profile showing a key inserted into a lock in a door. Text reads: Using new tax code provisions to fund Israeli orgs. Learn how the Canadian government unlocked a new loophole for Canadian charities which resulted in over $30 million sent to Israel between 2022 and 2024
Post Date: November 12, 2025

In 2022, the Canada Revenue Agency (CRA) made a significant change to to Canadian income tax law. Prior to the change, Canadian charities could only carry out their own activities or make grants to qualified donees. The new provisions (NQD provisions) allow Canadian charities to make grants to non-qualified donees. Previously, Canadian charities could provide funds to non-qualified donees (NQD) only if the recipient organization is acting as an intermediary. This requires the Canadian charity to maintain control and direction of the activity of the non-qualified donee. It is considered the charity’s own activity. However, this new rule allows Canadian charities to grant funds to NQDs without maintaining control or direction over their activities.

While there is clear guidelines on the types of disbursements that qualify under this change, we know that the CRA already fails to enforce its own policy and Canadian law under the previous provisions. Therefore, while the goal of the amendment was to increase equity, we have serious concerns about the use of the provision. While only representing a fraction of the funds disbursed under this provision, we already see it being used as just another method of supporting settler colonial expansion in Palestine. Other organizations have also sounded alarm bells about the general use of these new provisions. MakeWay has raised several concerns and made a formal submission to the CRA.

This publication is simply intended to open up the conversation regarding the NQD provisions. Additional analysis is required. For instance, the CRA provided information regarding 27,000 grants to NQD. Yet, only 4,000 report the recipient’s country. While the majority of these organizations are likely in Canada, it is unclear how much money is being moved out of country.

Funds to Israel through the NQD provisions between 2022-2024

Between 2022 and 2024, approximately $32,011,599 moved to Israel through the NQD provisions. This represents 28 donors and 77 recipients. You will note the total listed in the table is slightly higher. This is because several organizations coded their grants as going to Israel, but as detailed in the footnotes below, these funds went to Palestinian and/or anti-occupation organizations in Israel.

We highlight just a few of the grants to non-qualified donees over the last few years:

  • Space Israel:The Jewish Comunity Foundation of Montreal sent $12,591,088 to the Israel Space Agency, the Israeli governmental body.
  • The Lone Soldier Center in memory of Michael Levin: Canadian Charity Partners (CCP) sent $123,480 to The Lone Soldier Center in memory of Michael Levin. They are “the original and largest organization in Israel dedicated to supporting and guiding soldiers from the moment they receive their conscription orders until five years after their release from the IDF.” CCP is one of several organizations that uses vague names as a tool for Zionist political groups to fund war crimes in Palestine and related Zionist political interests.
  • IDF Widows and Orphans Organization: CCP sent $162,230 to IDF Widows and Orphans Organization, the “only organization endorsed by the State of Israel” to support widows and orphans of Israel military members who have died.
  • HonestReporting: CCP sent $172,760 to HonestReporting, an Israeli hasbara media organization that not only spreads misinformation but dehumanizes Palestinians.
  • Achim La’Chaim: Achim LaChaim Canada sent $2,060,025 to its Israeli counterpart which was “created and run by disabled Israeli officers, which gives critical and immediate help to disabled Israeli combat soldiers.”

Per year

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