Use of Proceeds

Proceeds must be used to pay for direct expenses of charitable activities. Proceeds must be disbursed in a timely manner and cannot be accumulated, unless approved by the Town of St. Marys.

On this page:

1. Eligible use of proceeds
2. Donations
3. Ineligible expenses
4. Lottery trust accounts

Eligible use of proceeds

Eligible uses of proceeds must be:

• In themselves charitable and advance the charitable purposes or objects of the organization
• Used for the direct delivery of the charitable purposes or objects of the organization
• Directed toward specific segments of the Ontario community or residents of Ontario with a common need.

Lottery proceeds must be used to benefits residents of Ontario. For example, proceeds cannot be donated to disaster relief for communities outside of Ontario.

Donations

Lottery proceeds may be donated to other charitable organizations, but the recipients must be eligible for a lottery licence themselves.

Ineligible expenses

Ineligible expenses include:

• Provision of personal benefit or gain for members of the applicant organization
• Supporting tourism or other purely economic benefits
• Advancing a particular political issue
• Enhancing lands and buildings owned and/or operated by a government
• A responsibility traditionally fulfilled by a government
• Funding activities that do not fall within one of the four charitable classifications

Lottery trust accounts

All financial lottery activity must be conducted in a lottery trust account. This account must be used solely for lottery activity and cannot be used for other purposes, such as the proceeds from other types of fundraisers. The types of accounts may vary depending on the bank. For example, the account may be called a 'community organization account', or something similar. Accounts must be set up to include monthly statements and images of cheques, which must be submitted to the Town with the lottery reports. An organization may use one account for all lottery activity, or have separate accounts for each type of lottery held.

Lottery funds must be held separately in order to protect them, especially in the case of dissolution. For instance, lottery proceeds cannot be used to pay debts or creditors. A dissolution clause in the organization's constitution will ensure that these funds are protected. Two signing officers who are bona fide members of the organization are required for the account. All withdrawals from the account must be made by cheque and no transfers are allowed.