In Canada, obtaining charitable status is essential for organizations that want to issue official donation receipts and access tax benefits. To qualify, organizations must meet specific requirements set by the Canada Revenue Agency (CRA). This guide walks you through the charitable status application process and what you need to know before applying.
A registered charity is an organization approved by the CRA that operates exclusively for charitable purposes. These purposes generally fall under four categories:
Once registered, a charity can issue official donation receipts, apply for tax-exempt status, and receive grants from other charities or the government.
To qualify for charitable status, an organization must:
If your organization meets these criteria, you can proceed with the charitable status application.
Most charities in Canada incorporate federally or provincially before applying for charitable status. This step provides a legal structure and ensures compliance with governance laws.
Your organization’s governing documents (e.g., bylaws, constitution) must clearly outline its charitable purposes and activities. The CRA will review these to ensure they align with charitable objectives.
To apply for registered charity status, you need to complete the CRA’s charitable status application. This includes:
Once you have gathered all necessary documents, you can submit the charitable status application to the CRA via the CRA's online My Business portal. The CRA's preference is for electornically filed charity applications.
The CRA review process can take 5-10 months, depending on the complexity of your application, and experience of the charity lawyer filing the charity application. The CRA may request additional information or clarification, so be prepared to respond promptly, though the CRA typically provides 60 days to respond.
If your application is approved, you will receive a Charitable Registration Number from the CRA, allowing you to issue official donation receipts and apply for funding.
Not all applications are approved. Here are some common reasons why applications are denied:
To avoid rejection, ensure your application is detailed, clear, and aligned with CRA guidelines.
Once registered, a charity in Canada can:
If you are starting a charity in Ontario, you must comply with both provincial and federal regulations. Ontario charities often incorporate under the Ontario Not-for-Profit Corporations Act (ONCA) before applying for charitable status with the CRA.
Registering as a charity in Canada has many benefits, but it also comes with strict regulations. Before applying, ensure your organization meets all requirements and has a clear charitable purpose. A well-prepared application can increase your chances of approval and allow you to start making an impact as a registered charity.
If you need assistance with the charitable status application, consider consulting a charity lawyer to help navigate the process efficiently.