Did you know there are over 86,000 registered charities in Canada? If you are not one of these registered charities, you may want to give it some consideration!
You first need to ask what it means to become a registered charity. As stated by the Canada Revenue Agency (CRA), a registered charity is “an organization established and operated for charitable purposes, it must devote its resources to charitable activities, and can issue official donation receipts.” As long as your charity is a resident in Canada, you are eligible to register it with the CRA.
How do I know if registering my charity is right for my organization?
To determine whether or not registering your charity is the right route to go, there are many legislative and regulatory obligations your organization must meet in order to proceed with this process. Before you make this decision, it is highly recommended that you read this article from the CRA on various topics about applying for registration. Here are some summarized advantages of registering your charity:
- Ability to issue official donation receipts. These receipts can be used to reduce the income tax payable of an individual donor, or the taxable income of a corporate donor.
- Exempt from paying income tax under Part I of the Income Tax Act
- Eligible to receive gifts from other registered charities.
- Increased credibility in the community.
- Many goods and services provided are exempt from GST/HST.
In most cases, it can significantly benefit the organization to operate as a registered charity instead of an NPO, as NPOs cannot issue official donation receipts. To understand the difference between a charity vs. an NPO, check out our blog here.
For more information on registering your charity for income tax purposes, please review CRA’s guide. As always, our specialized Not-for-Profit Team is always here to answer any questions or concerns you may have! Contact us today at 1-866-822-9992.