Nonprofits & Charities
Non-profit organizations and registered charities are similar, but there are some important differences between them.
Non-profit organizations are associations, clubs, or societies that are run for socially beneficial reasons, including:
- social welfare,
- civic improvement,
- pleasure,
- recreation, or
- any other purpose except profit.
Non-profit organizations must serve one or more of these purposes. They are not allowed to earn money for their members.
Non-profit organizations are not automatically charities. To become a charity, a non-profit organization must apply to the Canada Revenue Agency (CRA) for charitable status. Most organizations incorporate before becoming a charity.
Registered charities are non-profit organizations that have been given charity status by the CRA. Charity status allows non-profit organizations to issue official tax receipts to their donors and receive a rebate on the taxes they pay.
Registered charities can only do activities for these purposes:
- the relief of poverty,
- the advancement of education,
- the advancement of religion, or
- other purposes that benefit the community.
Your organization should consider the type of work it wants to do when deciding whether to become a registered charity.