Model objects

Introduction

The Income Tax Act (the Act) provides for the registration of organizations that are charities. As the Act does not define what is charitable, the Canada Revenue Agency (CRA) determines whether or not an organization qualifies as a charity at law by applying the common law: that is court decisions.

To be charitable at common law, an organization must have exclusively charitable purposes and carry on exclusively charitable activities that further these purposes. In this document, the words purposes and objects are used interchangeably. Both refer to the way that an organization describes and identifies the reason(s) for which it was created i.e., what it intends to achieve. Activities are the organization's programs - or how it will accomplish its purposes.

A charity's objects are set out in its governing document. If the objects allow the organization to do something that the law does not recognize as charitable, the organization is not considered to be a charity and is not eligible for registration.

When selecting a purpose or purposes, an organization must keep in mind a number of important factors:

• Categories of Charitable Purposes and Public Benefit - Not every purpose that may provide a public benefit is charitable at common law.

Only those purposes that fall within four specific headings or categories are charitable at common law. These categories are the relief of poverty; the advancement of education; the advancement of religion; and other purposes beneficial to the community as a whole in a way which the law regards as charitable. The latter category identifies an additional group of particular purposes that have been held by the courts to be charitable at law. This does not mean that all purposes that provide a public benefit qualify as charitable.

In addition, to qualify for registration as a charity, an organization must meet a public benefit test. An organization must show that its purposes and activities provide a tangible benefit to the public as a whole or a significant section of it. An organization that wishes to limit its beneficiaries unreasonably or offer a private advantage may not qualify for registration under the Act. For more information about public benefit, please refer to the CRA Policy CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test.

Prior to making an application to become a registered charity, careful consideration should be given to whether what your organization wishes to achieve falls within the scope of at least one of the four categories of charitable purposes, and will deliver the necessary public benefit.

• Exclusivity - A registered charity must have exclusively charitable purposes and activities.

This means that a registered charity may not have any purposes that are not charitable. It also means that all the activities of the charity must further its charitable purposes.

• Precision - To be eligible for registration, a charity must describe its purposes precisely so that each one is clear and restricts the organization to only charitable activities.

Language that is broad and vague could include non-charitable purposes and allow for the pursuit of non-charitable activities, which would not meet the requirement of exclusivity.

• Activities - The activities of the organization must directly further its charitable purpose(s).

Activities gain their charitable character from the purposes that they are intended to further. As such, selecting purposes from this list is only one part in the application process. The activities of the organization must bear a relationship to its charitable purposes and must be a reasonable means of achieving them.

It is important for organizations to choose their purposes carefully and provide accurate and detailed descriptions of all the activities they will conduct to further each purpose chosen. Note: Intentionally making a false statement when applying for registration as a charity may result in the subsequent revocation of charitable status.

Model Objects

The link to model objects below provides a non-exhaustive list of purposes that would be acceptable to the CRA. These purposes may be suitable for use by organizations that wish to apply to become registered charities or by organizations that are already registered, but wish to amend one or more of their purposes.

Why use the model objects?

If an organization uses a model object, the CRA will usually not need to discuss the wording of the object with you. This may speed up the decision making processes because, in most cases, the CRA will only need to consider whether:

Other Considerations

Drafting the objects is only one part of creating the governing document for a charity. Careful consideration should also be given to drafting other parts of the governing document, such as power clauses, and to the requirements of all applicable federal and provincial legislation. In addition to the requirements under the Income Tax Act of Canada, there may be other applicable federal and provincial legislation that you should consider.

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