What is the difference between a nonprofit, charity, and foundation?
A nonprofit is any organization that is not a business, that is, not operating to earn a profit. A registered charity is a type of nonprofit that has exclusively charitable goals. If an organization has exclusively charitable goals, it must be registered as a charity with the CRA.
All registered charities fall into exactly one of the following three categories (or "designations" in CRA's terms):
- a charitable organization
- a public foundation
- a private foundation
CRA provides details about the criteria for designation.
How do I start a nonprofit, charity or foundation?
How long to we have to keep our financial records and what records do we have to keep?
Does the CRA require a charity to have a board and do we have to report the names of the Board members to the CRA?
Yes. To maintain your charitable registration, you must maintain the legal status of your organization in good standing, and this includes having a duly constituted board or similar governing body.
You must report the names, home addresses and dates of birth of your directors to CRA, using Form T1235, Directors/Trustees Worksheet, filed along with your annual T3010 return. Addresses and birth dates are required by the CRA to help identify the directors, but this information is not public.
What can we issue tax receipts for?
or, Can we issue receipts if we don't have charitable status? Can we issue receipts to Corporate sponsors? Can we issue receipts for gifts in kind? For services? Can foundations issue tax receipts? etc.
You can find out all about issuing tax receipts.
Can we make a profit in our charity? Can we run a business?
There is no rule specifically prohibiting making a profit, and, yes, you can run a business subject to CRA's requirements for business activities. As well, there are spending requirements that you should be aware of.
How much can we spend on fundraising? Does the CRA have a legal limit for fundraising costs?
There is no legal limit on fundraising costs. CRA does, however, have guidelines about what activities it considers fundraising and what it considers to be excessive fundraising costs.
What is the First-time Donor's Super Credit?
The First-time Donor's Super Credit (FDSC) was announced by the federal government in Budget 2013. It adds 25 percentage points to the federal charitable tax credit for eligible donors and provides a new, time-limited and very powerful tax incentive for eligible donors. Learn more from the Canada Revenue Agency.