General requirements for charitable registration

Guidance

Reference number
CG-017

Issued
November 2, 2012

1. An organization must meet a number of general requirements to qualify for charitable registration under the Income Tax Act. After registration, registered charities (which include: charitable organizations, public foundations, and private foundations) must continue to meet all registration requirements in order to retain their registered status. Some of the main requirements relate to the following:

• Charitable purposes and activities

• Public benefit

• Political activities

• Business activities

• Operating through intermediaries

• Prohibited or illegal activities

• Canada’s anti-terrorism legislation

2. For more information, see Guide T4063, Registering a Charity for Income Tax Purposes.

Charitable purposes and activities

3. Purposes (also known as “objects”) are the objectives that an organization is created to achieve. Activities are the ways in which an organization furthers its purposes. To be eligible for charitable registration, an organization must show that each of its purposes is charitable at law, and that its activities further these charitable purposes in a way that complies with the requirements of the common law and the Income Tax Act. For more information, see Guidance CG-019, How to draft purposes for charitable registration.

4. Since activities can potentially further more than one purpose, an organization must show why and how each activity is undertaken, as well as its beneficiaries. For more information, go to What is charitable?

Public benefit

5. Registered charities must have purposes that deliver, or are capable of delivering, a charitable benefit to the public or a sufficient section of the public. For more information, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.

Political activities

6. Registered charities may conduct limited, non-partisan political activities that further their stated charitable purposes. However, registered charities may not have political purposes and may not conduct partisan political activities. For more information, see Policy statement CPS‑022, Political activities.

Business activities

7. Registered charities must limit business activities to those that relate to their charitable purposes, although private foundations may not carry out any business activities, related or unrelated. A related business activity is a commercial (revenue‑generating) activity that is related to a charity's purposes–meaning linked and subordinate to that purpose, or substantially run by volunteers. For more information, see Policy statement CPS‑019, What is a related business?

Operating through intermediaries

8. A registered charity must maintain direction and control over its resources (for example, funds, personnel, and property) and activities. This includes any activities carried out on its behalf by an intermediary (an individual or non-qualified donee that the charity works with to carry out its own activities). When working through an intermediary, it must ensure that an appropriately structured arrangement is in place. For more information, see Guidance CG‑002, Canadian registered charities carrying out activities outside Canada, and Guidance CG‑004, Using an intermediary to carry out a charity's activities within Canada.

Prohibited or illegal activities

9. Purposes and activities that are illegal in Canada or contrary to Canadian public policy are prohibited. For more information, see Policy CPS-024, Guidelines for registering a charity: Meeting the public benefit test, Guidance CG-002, Canadian registered charities carrying out activities outside Canada, and Guidance CG-004, Using an intermediary to carry out activities within Canada.

Canada’s anti-terrorism legislation

10. All charities must comply with Canada’s anti-terrorism legislation, including those contained in the Criminal Code of Canada. Charities are responsible for ensuring that they do not operate in association with individuals or groups that are engaged in or support terrorist activities. This applies whether or not the entity is listed under the Criminal Code of Canada.

11. For more information, go to Checklist for charities on avoiding terrorist abuse and Charities in the international context.

Date modified:

2012-11-01