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! Firstly, you need to ask what it means to become a registered charity. As stated by the Canada Revenue Agency (CRA), a registered charity must use its resources for charitable activities and have charitable purposes that fall in one or more of the following categories:

  1. the relief of poverty
  2. the advancement of education
  3. the advancement of religion or other purposes that benefit the community

If your organization is a resident in Canada, you are eligible to apply for charitable status.

How do I know if applying for charitable status is the right decision for my organization?

To determine whether or not registering your charity is the right route to go, your organization must meet many legislative and regulatory obligations to proceed with this process. Before you make this decision, it is highly recommended that you review The Charities Directorate website; it includes extensive information on the various aspects of applying for registration. In addition, an interactive quiz to determine if applying for charitable status makes sense for your organization.

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.

Finally, in most cases, it can benefit the organization to operate as a registered charity as NPOs cannot issue official donation receipts. Moreover, to understand the difference between a charity vs. an NPO, check out our blog here.

Please reach out to one of our specialists for more information on registering your charity for income tax purposes. Our Not-for-Profit Team is always here to answer any questions or concerns you may have! Contact us today at 1-866-822-9992.

References:
https://www.canada.ca/en/revenue-agency/services/charities-giving/charities/registering-charitable-qualified-donee-status/apply-become-registered-charity.html