RAII for Not-for-Profits 2026: FedDev's Non-Repayable AI Funding for Southern Ontario Organizations

FedDev Ontario runs a separate path of the Regional Artificial Intelligence Initiative (RAII) for not-for-profits, charities, Indigenous not-for-profit organizations and municipalities. If you are one of the RAII organizations southern Ontario has in mind, this is a different program from the business path: the money is non-repayable, and FedDev can cover up to 90% of eligible project costs.

There are two streams. AI Adoption ($125,000 to $5 million per project) helps established organizations put AI to work in their own operations. AI Ecosystem ($125,000 to $10 million per project) funds organizations that help southern Ontario businesses adopt, commercialize, deploy and scale AI. You can apply to one stream, not both.

Applications opened on October 13, 2026. The final deadline is January 19, 2027 at 4:59 p.m. Eastern, but there is an earlier date that catches many projects: if your project and eligible costs start before March 31, 2027, FedDev asks you to apply by November 24, 2026. This guide covers which stream fits, who qualifies, how to scope the project, what to prepare and the mistakes we see most often.

RAII for organizations at a glance

FedDev decides the final contribution amount, subject to available funding, and an application is not a commitment of funding. FedDev has not published a decision timeline for this intake.

Which stream fits your organization

The simplest test is who benefits from the AI. If the AI is going into your own operations, it is Adoption. If your organization is delivering services, testbeds, training or partnerships that help businesses adopt or commercialize AI, it is Ecosystem.

• AI Adoption: an established not-for-profit, charity, Indigenous not-for-profit or municipality buying and integrating AI or AI-driven solutions to improve its own productivity and resilience, beyond the purchase of commonly available AI tools
• AI Ecosystem: an incorporated not-for-profit with a track record of serving multiple southern Ontario businesses, leading a multi-stakeholder project that helps SMEs adopt and integrate AI, or commercialize and scale their own AI technologies

FedDev is explicit that an organization may not receive funding at the same time to adopt AI within its own operations and to deliver an AI ecosystem project. If you are an industry association or innovation hub that wants both, decide which project is stronger and build the file around that one.

If you are a business rather than an organization, you apply through FedDev's separate business path, which is a repayable, interest-free contribution of up to 50%. We cover it in our RAII southern Ontario guide for businesses.

Who can apply

Every applicant, in either stream, must demonstrate a commitment to the responsible development and use of AI and must not infringe on any IP rights. The stream tests below are FedDev's wording from the who can apply page.

AI Adoption stream

• Be an incorporated not-for-profit organization, including charities; a First Nation, Métis, Inuit not-for-profit organization; or a municipal government; and located and operating in southern Ontario at the time of your application
• Have annual revenue or operating expenses of at least $1 million, as demonstrated in the organization's most recent financial statements
• Have at least 3 years of operations as a legal entity capable of entering into legally binding agreements
• Have a minimum of 5 full-time equivalent employees

AI Ecosystem stream

• Be an incorporated not-for-profit organization; or First Nation, Métis, Inuit not-for-profit organization; and located and operating in southern Ontario at the time of your application
• Demonstrate that it is well-positioned to lead a high-impact, multi-stakeholder project based on its organizational size, capacity and reach within southern Ontario's AI ecosystem, with a minimum of 5 full-time equivalent employees and $1 million in annual revenue or operating expenses
• Demonstrate a strong track record of providing services to multiple businesses or other ecosystem participants in southern Ontario
• Have an Intellectual Property (IP) policy which addresses ownership and protection of IP, and rights to third party IP required for the project

Read the two lists side by side. Municipal governments and the words "including charities" appear only in the Adoption wording; the Ecosystem wording does not mention either. The 3-year operating history appears only under Adoption, and the track record and IP policy tests appear only under Ecosystem. If your organization sits near one of those lines, confirm with FedDev before you invest in the file.

How FedDev counts full-time equivalents

The application guide defines FTEs working in Canada as those who work a minimum of a 35-hour week. Part-time employees work less than that, and if you have them you explain in question 8 or an attachment how their combined hours add up to full-time equivalents. Freelancers and contractors do not count, and neither do people employed by suppliers or contracted services. Organizations that run largely on contract staff should do this count first.

First Nation, Métis and Inuit applicants are encouraged to contact FedDev at indigenous-autochtones@feddevontario.gc.ca about eligibility flexibility that may be available. Indigenous applicants do not need a CRA business number to apply and can enter a 3-digit band number in question 6 instead.

What each stream can fund

AI Adoption

The stream supports the purchase and installation of AI or AI-driven solutions, beyond commonly available AI tools, within your operations. FedDev's examples:

• AI readiness assessments
• Acquiring and integrating AI solutions such as predictive analytics or robotics
• Upgrading equipment, improving digital infrastructure and re-engineering processes
• Strengthening data quality, governance and architecture
• Adopting best management practices, and accessing and building AI expertise
• Capacity building and training that does not duplicate other government support programs
• Strengthening cybersecurity and reducing dependence on a single third-party vendor
• Guidelines, frameworks or committees for the responsible use of AI
• Change management, youth workforce integration, trust building and employee AI literacy

AI Ecosystem

The stream supports SMEs to adopt and integrate AI or AI-driven solutions, and to commercialize and scale their AI technologies. FedDev's examples:

• AI expertise, training, mentorship and advisory services for SMEs
• Facilitating the acquisition and integration of AI solutions
• Technology demonstrations, testbeds and supplier showcase events
• Expanding collaboration among industry partners, and connecting SMEs to supply chains and customers
• Attracting and retaining talent, including youth workforce integration in AI fields
• Responsible-use frameworks and best practices, cybersecurity and regulatory compliance

Ecosystem projects can also include funding for further distribution, meaning funding passed to an ultimate recipient, up to $100,000 per recipient. That cost category is not eligible under Adoption. The guide notes that priority may be given to organizations providing services directly to businesses.

Priorities across both streams

FedDev may prioritize adoption-focused projects that support businesses in five sectors: healthcare and life sciences, energy and natural resources, transportation, agriculture, and manufacturing and robotics. It may also prioritize projects that widen access to AI skills, technologies and opportunities for youth, Indigenous peoples, other underrepresented groups and small and rural communities, and projects that strengthen Canada's sovereignty and domestic capabilities, such as using competitive Canadian technologies and suppliers and keeping strategic IP and data in Canada.

How the 90% cost share and stacking work

Two limits apply, and they are easy to confuse. FedDev's own contribution can reach up to 90% of eligible costs, with the applicant and other sources covering at least 10%. Separately, the guide states that total government assistance (federal, provincial and municipal) cannot exceed 100% of total eligible project costs. The program pages do not say the 10% must be your own cash.

Two other rules shape the funding plan. For AI Adoption, only cash contributions count: in-kind contributions are not eligible and cannot be used as project financing. For AI Ecosystem, the guide asks that partner letters describe the amount and nature of both cash and any in-kind contributions secured. In both streams, forecasted revenue cannot be counted as a source of project financing.

The 50% row matters because FedDev says preference may be given to projects that maximize funding from other sources, meaning FedDev's contribution is 50% or less. Asking for the full 90% is allowed, but if you have partners, foundations or other public funders lined up, show them. If approved, you are expected to sign the contribution agreement within 30 days and confirm every source of matching funds at that point, for example with bank statements, term sheets, conditional funding letters or other government funding.

Funding is project-based and must produce incremental, measurable outcomes beyond your existing activities. FedDev does not fund ongoing operating costs, and the guide asks you to show how you will support operations after the project ends.

What is not eligible

Eligible costs must be reasonable, verifiable, incremental and directly support project activities. Within the cost categories, the guide excludes:

• Purchase of land, buildings or vehicles
• Regularly scheduled capital expenditures and asset replacement, personal motorized vehicles and off-site equipment
• Ongoing costs of production or operations, and raw materials or materials consumed for regular operations or inventory
• Refinancing existing debt
• Hospitality and entertainment
• Application preparation costs, including fees for external consultants paid to prepare the application
• Funding for further distribution under the Adoption stream

Two timing rules also apply. A project cannot begin more than 12 months before your application date, and any activity or cost incurred before FedDev makes a formal decision is at your own risk.

How to scope a strong project

FedDev assesses complete applications on strategic alignment with program objectives and priorities; expected economic and ecosystem benefits, including how far the project reduces barriers for underrepresented groups or communities; organizational and financial capacity, including partner contributions; and the quality and feasibility of the plan, including incrementality. This is how we build a file against those criteria.

Start from one problem, not a technology list

For Adoption, name the operational problem first: intake backlogs, scheduling, asset maintenance, service routing. Then describe the AI system that addresses it and the evidence that it will deliver, because FedDev looks for clear and significant evidence that the solution will deliver on its promise for Adoption projects. Data clean-up, integration, cybersecurity and staff training belong in the budget as the work that makes that system run, not as separate wish-list items.

For Ecosystem, show who the businesses are

An Ecosystem file is judged on reach. Describe the businesses you will serve, how you will recruit them, what each receives and what changes for them. Your track record with multiple southern Ontario businesses is an eligibility test, so give it numbers from your own records. Partner letters should state what each partner is contributing.

Make incrementality obvious

Reviewers want to see what the project adds to what you already do. Separate new activity from your current programs and staff, and budget only the incremental salaries, equipment and services. A budget that quietly funds an existing team is the fastest way to weaken this criterion.

Treat responsible AI as a work package

At a minimum, the guide asks you to describe human oversight and accountability frameworks and measures to address cybersecurity risks. Depending on the project, FedDev may also expect privacy, data governance, fairness, safety and transparency measures. Give these a timeline and an owner. FedDev may support costs related to responsible AI, such as cybersecurity, so budget for them.

Be honest about timing

FedDev asks applicants to state clearly whether any costs have been incurred, or are expected to be incurred, by March 31, 2027, to accelerate projects with near-term impact. Build the schedule from real vendor lead times and procurement rules. Municipalities in particular should check how their own procurement cycle fits the dates in the work plan.

What to prepare

These are the mandatory attachments listed on FedDev's apply page:

• The completed RAII Supplemental Form, attached even if every answer is no
• Financial statements for the last 2 years (interim or annual, balance sheets and other documentation), externally prepared; statements with an audit or review engagement are preferred
• Financial projections showing the timing of project spending and revenue growth
• Articles of incorporation and amendments, or similar documents
• Biographies of key management and technical staff required to complete the project
• An organization structure diagram
• A work plan or project schedule with major activities, milestones and a detailed project budget
• A breakdown of jobs created or maintained immediately after project completion and 2 years after
• For AI Ecosystem: a copy of your organization's Intellectual Property Strategy

FedDev may also ask for diversity, equity and inclusion supporting documents if applicable, your cybersecurity strategy if you have one, and letters of intent or support from partners describing the contributions they have secured. After approval, expect further requests covering insurance, conflict of interest, financial management, project expenditures and performance reporting.

A realistic timeline to November 24 and January 19

As of late October, November 24 is about four weeks away. If any eligible cost will start before March 31, 2027, that is your deadline. A workable plan:

• Week 1: confirm the stream, run the FTE and $1 million tests against your latest statements, and check that no other FedDev application is under assessment
• Weeks 1 to 2: scope the project, collect vendor quotes, and draft the responsible AI measures and IP strategy or policy
• Weeks 2 to 3: confirm the matching funds and partner letters; get board approval for your share
• Weeks 3 to 4: complete the Application for Funding (Not-for-Profit Applicants), the Supplemental Form, the work plan and attachments; have the authorized signing officer review and submit

If your spending starts after March 31, 2027, you have until January 19, 2027 at 4:59 p.m. Eastern. Use the extra time to firm up partners and quotes, and plan around the December holidays, when board approvals and partner letters slow down. Applications must be received within the intake period to be considered.

Common mistakes to avoid

• Counting contractors or freelancers toward the 5 FTE minimum
• Counting in-kind contributions toward your share in an AI Adoption project
• Applying under Ecosystem as a municipality, when municipalities appear only in the Adoption wording
• An Adoption project that amounts to buying commonly available AI tools
• Budgeting ongoing operating costs or existing staff as if they were incremental
• Including land, buildings, vehicles, hospitality or application preparation fees
• Missing November 24 for a project whose costs start before March 31, 2027
• Applying while another FedDev Ontario application is under assessment, or applying to both streams
• Submitting internally prepared financial statements when the apply page requires externally prepared ones

How to apply

RAII uses downloadable PDF forms:

1. Read FedDev's application guide for not-for-profit applicants in full.
2. Download the Application for Funding (Not-for-Profit Applicants) and the RAII Supplemental Form, and open them in Adobe Acrobat Reader 10 or later, not a web browser. Tablets and phones cannot be used.
3. In question 22, name the stream: "Regional Artificial Intelligence Initiative - Adoption" or "Regional Artificial Intelligence Initiative - Ecosystem". Remember that blank spaces count against character limits.
4. Attach the mandatory documents and submit.
5. Keep the email acknowledging the date and time of your application. If it does not arrive, call FedDev at 1-866-593-5505.

Note that if your project is funded, the recipient name, amount and project description are disclosed publicly. For the program details in one place, see our RAII southern Ontario program page.

Frequently asked questions

Can not-for-profits apply to RAII in southern Ontario?

Yes. FedDev Ontario runs an organizations path of RAII with two streams. AI Adoption is open to incorporated not-for-profits including charities, First Nation, Metis and Inuit not-for-profits, and municipal governments. AI Ecosystem is open to incorporated not-for-profits and First Nation, Metis and Inuit not-for-profits. All must be located and operating in southern Ontario when they apply.

Is RAII funding for organizations repayable?

No. FedDev describes funding under both organization streams as non-repayable. FedDev can contribute up to 90% of eligible project costs, and the applicant and other sources provide at least 10%.

How much can an organization receive?

AI Adoption projects range from $125,000 to $5 million and AI Ecosystem projects from $125,000 to $10 million. FedDev makes the final determination of the amount, subject to available funding.

What are the deadlines?

Apply by November 24, 2026 if your proposed project and eligible costs start before March 31, 2027. The final deadline is January 19, 2027 at 4:59 p.m. Eastern Standard Time.

What are the size requirements?

Both streams require at least 5 full-time equivalent employees and at least $1 million in annual revenue or operating expenses. AI Adoption also requires at least 3 years of operations. FTEs work at least 35 hours a week, and contractors and freelancers do not count.

Can in-kind contributions count toward our share?

Not for AI Adoption, where only cash contributions are eligible. For AI Ecosystem, the guide asks that partner letters describe the amount and nature of both cash and any in-kind contributions secured. Forecasted revenue cannot be counted in either stream.

Can RAII be combined with other government funding?

Yes, within limits. Total government assistance from federal, provincial and municipal sources cannot exceed 100% of total eligible project costs, and FedDev may give preference to projects where its own share is 50% or less.

Can a consultant be the contact on our application?

No. Neither the Authorized Project Contact nor the Financial Contact can be a consultant or third party. Advisors can help prepare the file, but the cost of external consultants paid to prepare an application is not eligible.