Charity Law

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Starting and operating a charity can be a fulfilling experience. However, very few charities can operate effectively without a proper legal and financial framework. The ability to give tax receipts to donors, accountability regarding how the charity is run and who makes decisions about the charity are all important factors to consider. 

 

At the federal level, the Canada Revenue Agency (CRA) administers a system to register charities under the Income Tax Act. As the regulator of charities, the CRA's responsibilities include:

 

  • processing applications for registration;

  • offering technical advice on operating a charity;

  • handling audit and compliance activities; and

  • providing general information to the public.

 

Registration provides charities with exemption from income tax. Registration also authorizes charities to issue official donation receipts for income tax purposes, meaning that donors can claim gifts made to registered charities to reduce their income tax.

 

Registered charities and non-profit organizations (NPOs) both operate on a non-profit basis, however they are not the same.

 

Registered charities are charitable organizations, public foundations, or private foundations that are created and resident in Canada. They must use their resources for charitable activities and have charitable purposes that fall into one or more of the following categories:

 

  • the relief of poverty

  • the advancement of education

  • the advancement of religion

  • other purposes that benefit the community

 

Some examples of registered charities under each of the four categories:

 

  • relief of poverty (food banks, soup kitchens, and low-cost housing units)

  • advancement of education (colleges, universities, and research institutes)

  • advancement of religion (places of worship and missionary organizations)

  • purposes beneficial to the community (animal shelters, libraries, and volunteer fire departments)

 

The process of obtaining charitable registration requires compliance with applicable laws, which often involve a customized Articles of Incorporation prepared by a lawyer. 

 

If you are thinking about starting a charity, or have questions about how to operate your charity, it's important to obtain legal advice from lawyer with experience in this area of law. You can book a free, no-obligation consultation to discuss your options. If you decide to retain one of our lawyers to create your charitable organization, we charge a flat fee of $5,000, plus HST and government fees for most matters, except complex cases.