RC3. My organization engages in “charitable” causes in our province. Does that mean that it is a registered charity?
Short AnswerLong Answer
Not necessarily. Just because an organization uses the word “charitable” to describe itself and what it does, the organization is not necessarily a registered charity. An organization can run on a not-for-profit basis without registering as a registered charity with the Canada Revenue Agency (CRA). A “registered charity” is a technical and precise term referring to a charitable organization that is registered under the Income Tax Act (ITA).
Municipal, provincial (territorial), federal, and specific commissions and other bodies define the terms “charity” and “charitable” in various ways. Often, these definitions are not linked to the concept of a registered charity under the ITA.
- In Alberta, an organization that wishes to promote “charitable” purposes can incorporate under either the Companies Act or the Societies Act. Neither of these acts defines the term “charitable” and neither of them links the term to the concept of a registered charity under the ITA. In addition, any organization that wishes to raise funds over $25,000 must register with the provincial government as a “charitable organization” under the Charitable Fund-Raising Act. This applies to both registered charities and non-profits in general. So, if you are a “charitable organization” in Alberta, that does not necessarily mean that you are also a registered charity under the ITA. This lack of a link between the provincial concept of “charity” and ”charitable” and the concept of a registered charity under the ITA can also be found in British Columbia, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, and Newfoundland and Labrador.
- In Prince Edward Island, the Charities Act, which defines a “charity” as any organization seeking financial support in order to raise funds for “charitable” purposes, applies to non-profits other than organizations that are registered charities under the ITA.
- In Saskatchewan both the Charitable Fund-Raising Businesses Act andthe Non-Profit Corporations Act refer to “charitable” corporations and “charitable” organizations as corporations and organizations that are registered charities within the meaning of the ITA.
As you can see, most provincial legislations use the terms “charity” and “charitable” to refer to non-profit work in general and charitable works at an informal level. This does not mean that your organization is a registered charity for the purposes of the ITA and the CRA.
For further explanation of the differences between a registered charity and a non-profit organization, go to our Fast Facts
For information on how to become a registered charity, go to FAQ RC16