Make an informed decision

The decision to apply for registration as a charity is an important one. After a charity is registered, it will have many obligations to meet each year, such as filing an information return and meeting a spending requirement. A charity has obligations to the recipients of its charitable activities, to its volunteers, to its donors, and to the general public. There are also a number of legislative and regulatory obligations a charity must fulfill for the various levels of government (federal, provincial, and territorial).

If a charity changes its mind after registration and wants to wind up or dissolve, it must ask to have its registered status revoked. A revoked charity must give all its assets to another registered charity, or pay a revocation tax equivalent to the full value of its remaining assets.

Before you apply for registration as a charity, consider the following options:

  • You and your members can volunteer with, or raise funds for, an established registered charity that is doing the same work that your organization wants to do.

  • You and your members can contribute to a charitable fund of another registered charity with charitable activities you want to support.

  • You and your members can become board members of an existing registered charity that is carrying out similar charitable work.

  • Your organization may qualify as a non-profit organization. The purposes and activities of non-profit organizations are not as restrictive as those of registered charities.

If you are still interested in applying for registration, take the following mini-quiz to see if registration is right for you.

  1. Is your organization resident in Canada?

  2. Is it important for your organization to be able to issue official donation receipts, and/or receive gifts (e.g., grants) from other registered charities?

  3. Does your organization have exclusively charitable purposes?

  4. Will your organization be able to recruit volunteers and staff members on an ongoing basis to carry out your charitable purposes and activities?

  5. Does your organization have the necessary skills and resources to meet all of the obligations of registration?

  6. Is your organization aware of the consequences of not continually meeting all of the obligations of registration as a charity?

  7. Does your organization have enough support and reach that will result in the necessary donations or funding to fulfill your charitable purposes and carry out your activities?

  8. Is your organization willing to give all its assets to another registered charity if, and when, your organization ends its operation?

If you answered yes to all these questions, registration may be right for you.

However, there are factors that will prevent an organization from being registered that you should be aware of before making a decision to apply for registration as a charity.

References

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