Registered Charities

A registered charity in Canada is an organization that has been granted exemption from paying income taxes and has been authorized to issue charitable receipts that the donor can claim as tax credits or deductions.

The Income Tax Act and other statutes do not offer an exact definition of what a charity is. Rather, the definition has its roots in English common law dating as far back as the17th and 19th Centuries. Although arguably outdated, Canada's tax laws require that charities fit under at least one of four main categories: advancement of religion; advancement of education; relief of poverty; or other purposes that benefit the community.

Canada Customs and Revenue Agency's (CCRA) Charitable Division is responsible for determining which organizations are eligible for charitable status. A non-profit that wishes to become a registered charity must submit an application to CCRA. The application must demonstrate that the organization fits within the classifications of charities, and that it meets certain criteria, such as being provincially incorporated or legally established by a governing document.

In exchange for the benefits of charitable status, registered charities must comply with strict reporting obligations and other regulations. Have a look at what the main requirements involve.

• Charity Information Return
• Advocacy Regulations
• Receipting Regulations
• Disbursement Quota

CCRA is responsible for monitoring charities' compliance with these regulations. If a charity is found to be in non-compliance, it may have its charitable status revoked. CCRA may audit a charity, and it is therefore important to keep financial records for at least six years from the end of the fiscal year to which they relate.

For detailed information on registered charities, link to Canada Customs and Revenue Agency.

Next, learn about non-profit organizations and their obligations.

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