Types of registered charities (designations)

There are three types of registered charities. Every registered charity is designated as a:

  • charitable organization;
  • public foundation, or
  • private foundation.

The designation a charity receives depends on its structure, its source of funding, and its mode of operation. A registered charity is notified of its designation by the CRA when it receives a Notice of Registration. All registered charities, regardless of their designation, can issue official donation receipts for income tax purposes.

To determine the designation of a registered charity, the CRA applies the following criteria:

Charitable organization

  • it is established as a corporation, a trust, or under a constitution;
  • it has only charitable purposes;
  • it primarily carries on its own charitable activities;
  • it has more than 50% of its directors, trustees, or like officials dealing with each other at arm's length; and
  • it generally receives its funding from a variety of arm's length donors.

Public foundation

  • it is established as a corporation or a trust;
  • it has only charitable purposes;
  • it generally gives more than 50% of its income annually to other qualified donees, usually other registered charities, but it may carry out some of its own charitable activities;
  • more than 50% of its directors, trustees, or like officials deal with each other at arm's length; and
  • it generally receives its funding from a variety of arm's length donors.

Private foundation

  • it is established as a corporation or a trust;
  • it has only charitable purposes;
  • it carries on its own charitable activities and/or it funds other qualified donees, usually other registered charities;
  • 50% or more of its directors, trustees, or like officials do not deal with each other at arm's length; and/or
  • more than 50% of its funding comes from a person or group of persons that control the charity in any way or make up more than 50% of the directors, trustees, or like officials of the charity.

References

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