There are a number of reasons an organization may want to become a registered charity as well as a process for becoming one.
The ability to issue official donation receipts may be key for some organizations. Many non-profit organizations depend on donations to be able to do their work. Being able to receive official receipts can make individuals and corporations more willing to support the organization.
One reason an organization may want to become a registered charity is the ability to issue official donation receipts. These receipts can be used by individuals and corporations to receive tax credits.
In addition, only registered charities can receive donations from certain other organizations such as foundations. Even if an organization is not legally restricted from donating to a non-registered charity they may not be willing to donate to an organization that is not a registered charity. Registration can provide increased credibility in the community, since registered charities must follow certain rules and guidelines to maintain their registration.
You may decide that your organization would benefit from registration but this alone does not necessarily mean that registration is right for your organization. You will want to consider whether you have the financial resources and people to carry out your purpose, as well as considering the obligations of registration and if you have the capacity to meet these obligations. A registered charity that does not meet its obligations may be subject to penalties and their charitable status could also be revoked.
Registered charities are required to...
To register as a charity you complete the online application. There is information that must be provided and a number of requirements that must be met for an organization to be registered as a charity. Information about the process and the requirements can be found in the Charities section of canada.ca. You will need to provide information about your organization and its finances. You will also need to explain what charitable activities your organization will engage in.
If your application is complete – all the required information and attachments are included – you will receive an acknowledgement letter. This letter will tell you approximately how long it will be before your application is given to an officer for review.
You may be contacted if the Directorate needs clarification or more information. They may also give you the opportunity to amend your purposes if they think these are not in line with your activities. You will generally be given 60 days to respond. If an organization does not respond the file will be closed. The Directorate will use any information provided to make a final decision. If an organization wants a final decision without providing more information they can notify the directorate in writing.
The Directorate will send a letter denying the application if they conclude that the purposes or activities are clearly not charitable. This decision can be appealed within 90 days.
If the application is approved the charity will be given a charitable registration number and told the effective date of registration.
To be a registered charity an organization must have a legal structure and come within the definition of a charitable organization, a public foundation or a private foundation. The application for registration also requires detailed information about your organization and its finances.
There are only certain activities that are considered charitable for the purposes of registration as a charity. In addition to being for a charitable purpose activities must also benefit the public.
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