Is Charity Registration Right for My Not-for-Profit Organization?

Should you apply for registration?

The decision to register as a charity is a significant one. Registration gives an organization specific tax privileges: a registered charity generally does not pay income tax on qualifying activities and can issue official donation receipts to donors. Canadians give billions to charities each year, and the CRA Charities Directorate reviews applications to ensure only qualifying organizations receive those privileges.

Before you apply, understand what registration requires and what can disqualify an organization. Some activities or structures will prevent registration. After you are registered, you must meet ongoing obligations every year, including filing Form T3010, Registered Charity Information Return, within six months of fiscal year-end. You must also maintain your status as a legal entity under federal or provincial law and comply with rules at other levels of government where your programs operate.

If a registered charity does not meet its obligations, the CRA can impose sanctions up to and including revocation of charitable registration.

What registration involves

Applications are submitted online through My Business Account (or through a representative using Represent a Client). You will need governing documents, a description of charitable activities, financial information, and supporting materials. The CRA provides an application checklist and guidance on its Apply to become a registered charity pages.

Once registered, charities must:

• File an annual T3010 (online filing through My Business Account or CRA-certified software is recommended). See How to file the T3010.
• Meet disbursement quota / qualifying disbursement rules.
• Issue official donation receipts that meet CRA content requirements when donors are entitled to them.
• Keep books and records that support activities and fundraising.

You can confirm a charity’s registration status on the CRA List of charities.

Not every NPO should become a charity. If your main purpose is member-focused recreation or social activity rather than charitable purposes as defined in law, registration may not fit. The CRA offers resources to help you decide, including guidance on differences between registered charities and NPOs.

Ready to register?

Our Chartered Professional Accountants work with not-for-profit and charitable organizations throughout the year. Contact us if you want help with the registration process, setting up receipting and record-keeping, or staying onside with T3010 and other CRA requirements after you are registered.

This post has been prepared for general information purposes. It is not advice. The information presented may not fit your unique situation. Please consult one of our trusted business advisors at RHN CPA for further clarification and interpretation of your circumstances.