RC15. What rules govern registered charities?

RC15. What rules govern registered charities?

A registered charity is permitted to do only certain kinds of activities:

  • advance religion
  • advance education
  • relieve poverty
    and
  • undertake activities which are generally beneficial to the community as a whole and which the courts have determined to be charitable.

Other rules pertaining to registered charities include that:

  • it must devote its resources to charitable purposes and activities
  • it cannot pay, or otherwise make available, its income to any of its members
  • it must issue official donation receipts in accordance with the Income Tax Act and the Income Tax Regulations (and an organization that is not a registered charity may not issue official receipts)
  • it is required to keep proper books and records, and provide these and other relevant information to the CRA
  • each year, the charity must file an annual information return
    and
  • each year, the charity must spend its “disbursement quota” (spending requirement). Generally speaking the disbursement quota is the minimum amount a registered charity is required to spend each year on its own charitable activities, or on gifts to qualified donees (for example, other registered charities). The disbursement quota calculation is based on the value of a charity's property not used for charitable activities or administration.
Notice to the reader:
As a result of Budget 2010, the information stated above regarding disbursement quota applies only for fiscal periods ending on or after March 4, 2010. If the charity's fiscal period end was before March 4, 2010, see Disbursement quota calculation - prior to Budget 2010.
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For a checklist read
Basic Guidelines for Maintaining Charitable Registration