Glossary: C

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  • Capital Property

    Description: Capital property includes depreciable property, and any property that, if sold, would result in a capital gain or a capital loss. Capital property does not include the trading assets of a business, such as inventory.

    Examples: The following properties are generally capital properties:

    • securities, such as stocks, bonds, and units of a mutual fund trust; and
    • equipment you use in a business or a rental operation.

    Capital property is normally valued at fair market value for tax receipt purposes. In some cases, however, the donor (not the charity) can choose a lower value. The donor can do this where their cost of the property for tax purposes (the "adjusted cost base") is less than fair market value. In this case, the donor may choose which value to use so long as it is:

    • no lower than the donor's adjusted cost base;
    • no lower than the value of any advantage; and
    • no higher than the fair market value.

    This rule lets donors choose how much capital gain (if any) they recognize for tax purposes on the donation of the capital property.

    Note: If the fair market value is less than the adjusted cost base, the donor does not have a choice: the fair market value must be used.

    For further information, see CRA's IT-288.

  • Charitable activity

    A charitable activity is an activity carried out by a registered charity to further its mission.

  • Charitable activity - examples

    In the following hypothetical examples, the charity is called Healthy Retirement and was formed to promote the health of seniors in Canada. It has received a lot of media attention on its recently released, well-reasoned position on the hazards for seniors of using marked crosswalks. It concludes from its findings that a senior is four times more likely to be involved in a fatal accident with a car at a marked crosswalk than at an intersection with a stop sign or a light.

    Example 1 — Distributing the charity's research

    Healthy Retirement distributes the results of its research to the media, its members, other charities that specialize in promoting the health and welfare of seniors, the general public, and anyone interested in its findings. It also publishes its report in medical association journals and on its Web site, and highlights its release in a newsletter sent to subscribers. In these cases, all the resources devoted to the research and distribution of the findings are considered resources devoted to charitable activities because:

    • the activities are connected and subordinate to the charity's purposes;
    • the activities do not contain a call to political action; and
    • the activities are based on a well-reasoned position.

    This is information that seniors can use to improve their safety and that decision-makers can use when deciding where and whether to use crosswalks or other traffic controls when considered in combination with other issues.

    Example 2 — Distributing a research report to election candidates

    Healthy Retirement decides to send its report to all candidates in a municipal election to inform them about the hazard marked crosswalks pose for seniors. This is a charitable activity because it is connected and subordinate to the charity's purpose and because no one candidate is favoured over another.

    Example 3 — Publishing a research report online

    A major finding of the report was that many motorists fail to respect the right-of-way at marked crosswalks. When Healthy Retirement publishes its report online, it highlights this fact and urges motorists to observe the law. This is still a charitable activity because it is encouraging people to respect the existing law on an issue that relates to its purposes.

    Example 4 — Presenting the research report to a Parliamentary Committee

    The research director of Healthy Retirement presents the charity's findings to a Parliamentary Committee formed to hear representations on whether there should be stiffer penalties in the Criminal Code for dangerous operation of a motor vehicle. She ends her representation with a recommendation (based on a well-reasoned position) that a driver failing to observe the pedestrian right-of-way at a marked crosswalk should be automatically subject to a charge of dangerous operation of a motor vehicle, as a deterrent.

    Even though the charity explicitly proposed a political solution to the problem, this activity is charitable because it is a communication to an elected official based on a well-reasoned position.

    Example 5 — Giving an interview about the research report

    Following her representation, as the research director of Healthy Retirement is leaving Parliament, she is stopped by the media and interviewed for television and radio about what she said and the report. She outlines her representation and repeats the conclusion that on the basis of the research the charity has done, the charity thinks that the number of pedestrian deaths involving seniors might be reduced if drivers who failed to recognize the right-of-way of pedestrians at marked crosswalks faced stiffer penalties. This interview is not a political activity because the research director did not arrange a media campaign to publicize the charity's conclusion that the law should be changed; she simply explained what she had said to the elected representatives.

    Example 6 — Distributing the research report to all Members of Parliament

    A bill is being debated in Parliament. The bill proposes a change to the Criminal Code that would allow a driver who fails to observe the pedestrian right-of-way at a marked crosswalk to be charged with dangerous operation of a motor vehicle. Healthy Retirement gives Members of the House, for use in debate, a relevant well-reasoned position regarding how such a charge might encourage drivers to uphold the law and thereby save lives. This is a charitable activity because Healthy Retirement is informing elected representatives about its work on an issue that is connected and subordinate to the charity's purposes and based on a well-reasoned position.

    Example 7 — Participating in an international policy development working group

    The research director of Healthy Retirement is asked to join a working group of the World Health Organization that is gathering together government policy makers, academics, and voluntary sector representatives from around the world to develop a charter to promote the health of senior citizens. Such an activity is connected and subordinate to the charity's purpose. Although the research director is taking part in an initiative organized by an international body, this kind of activity is considered to be like communicating with a public official because government policy-makers are also invited (whether or not they actually attend). Therefore, as long as the research director's contribution is based on a well-reasoned position, the resources of the charity devoted to developing such a charter are viewed as resources devoted to a charitable activity.

    Example 8 — Joining a government advisory panel to discuss policy changes

    A provincial government launches a Health Sector Initiative to look at ways of improving its service delivery to residents of the province. Healthy Retirement is asked to join an advisory panel with other health charities and public officials to discuss possible policy changes. Based on a well-reasoned position, Healthy Retirement suggests that the province should increase its number of long-term hospital care beds for the elderly. Although the charity is recommending a change in provincial health policy, the charity's involvement in the advisory panel is a communication to a group of public officials based on a position that is well-reasoned. Therefore, the resources devoted to the activity are resources devoted to a charitable activity.

  • Charitable organization

    • is established as a corporation, a trust, or under a constitution;
    • has exclusively charitable purposes;
    • primarily carries on its own charitable activities, but may also gift funds to other qualified donees, (e.g., registered charities);
    • more than 50% of its governing officials must be at arm's length with each other;
    • generally receives its funding from a variety of arm's length donors; and
    • its income cannot be used for the personal benefit of any of its members, shareholders, or governing officials.

    (CRA : Charities Glossary)

  • Charity Registration Number

    A charity registration number is 15-digit program account number assigned to a charity by the CRA when it is registered. A complete charity registration number has three parts: the BN (first nine digits), the program identifier (two letters), and the reference number (four digits). The registered charity program identifier is "RR". When you deal with the Charities Directorate always use the 15-digit registration number.

    (CRA : Charities Glossary)

  • Chart of accounts

    The chart of accounts is the master list of account codes (consisting of numbers and/or letters) and account names used to classify, record, budget, and report financial transactions in a general ledger.

  • Community foundation

    A community foundation is an organization established to manage a community endowment fund, the income from which is distributed to registered charities within a community. A community foundation can qualify for registration as a charity.

    (CRA : Charities Glossary)

  • Compensation

    Compensation, for persons (employees) working full-time or part-time for a registered charity, includes salaries, wages, commissions, bonuses, fees, and honoraria, plus the value of taxable and non-taxable benefits.

    (CRA : Charities Glossary)

  • Connected activity

    An activity that relates to and supports a charity's purpose and is a reasonable way to achieve it.

  • Constitution

    A legal document that sets out the fundamental principles and structure of an organization that is not a corporation.

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