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Charitable status

A registered charity is a special type of not-for-profit organization or corporation. Unlike a regular not-for-profit, a registered charity may:

  • Issue tax receipts
  • Receive donations from other charities
  • Not pay income tax
  • Be exempt from charging HST for many services
  • Be eligible to claim tax rebates for HST paid

Another important difference between a regular not-for-profit corporation and a charity is that when you close a charity you must distribute all of the remaining assets to other charities. The assets cannot be distributed among the former directors, members or officers of the charity.
 

Contact the Ontario Ministry of the Attorney General for more information on provincial not-for-profit corporations.

Ministry of the Attorney General:
1-800-518-7901

Purposes of a charity

Your not-for-profit organization will only be eligible for charitable status if its purpose is considered “charitable.” The aims of a charitable organization may be:

  • Poverty relief
  • Advancement of education
  • Advancement of religion
  • Certain other purposes that benefit the community in a way that the courts have said is charitable

For more information about what counts as charitable activity, read online:
What is charitable?

Types of charities

Your charity may take one of three forms:

  • Charitable organization: Primarily carries out its own activities and receives funds from “arm's-length” donors (e.g., independent individuals who are not related)
  • Public foundation: Generally gives more than 50% of its income to qualified donees (usually other charities) and receives funds from arm's-length donors
  • Private foundation: May carry on its own activities and give some of its income to qualified donees (usually other charities); is directed by and receives funds from non-arm's-length individuals (e.g. family)

Registering a charity

The Canada Revenue Agency (CRA) oversees the registration of charities for official tax-exemption purposes. To register your charity, you must apply for registration. The CRA provides several resources to help you learn about the registration process and determine if registration is the right option for your organization. You may also want to contact the CRA directly before applying for charitable status.

Contact the CRA Charities Directorate:
1‑800-267-2384
Registering a charity

Not-for-profit incorporation

Many charities choose some form of not-for-profit incorporation, which brings limited legal liability. If you incorporate your charity, your organization’s aims need to meet the definition of charitable activities and must be included in your incorporation documents.

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