Essential Guide to Choosing a Charity Lawyer

When it comes to establishing and maintaining a charitable organization in Canada, having the right legal guidance is paramount. This is where a skilled Charity Lawyer steps in, offering invaluable expertise in navigating the intricate landscape of Canadian charity law.

When Do You Need a Charity Lawyer?

Understanding when to seek legal guidance can save your organization time, money, and potential compliance issues down the road. You should consider consulting a charity lawyer when:

Starting Your Organization:

• Launching a new charity or nonprofit organization
• Applying for charitable registration with the Canada Revenue Agency (CRA)
• Incorporating a nonprofit corporation under federal or provincial legislation
• Choosing the right legal structure for your mission

Governance and Compliance:

• Drafting or updating bylaws and governance documents
• Navigating ONCA (Ontario Not-for-Profit Corporations Act) compliance requirements
• Implementing proper board governance structures
• Creating policies for conflict of interest, whistleblowing, or gift acceptance

CRA Matters:

• Handling CRA audits or compliance reviews
• Responding to CRA inquiries or information requests
• Maintaining charitable registration status
• Addressing charitable receipting issues or disputes

Organizational Changes:

• Merging two or more charitable organizations
• Dissolving a charity properly
• Changing your charitable objects or activities
• Restructuring your organization

Operational Issues:

• Managing employment law issues specific to charities
• Resolving disputes with directors, members, or staff
• Reviewing fundraising agreements or major contracts
• Navigating related party transactions

Early legal guidance can prevent costly mistakes and ensure your organization starts on solid legal footing.

Understanding the Role of a Charity Lawyer in Canada

A Charity Lawyer is a legal professional specializing in Canadian charity law. They possess a deep understanding of the regulations, requirements, and compliance standards set forth by the Canada Revenue Agency (CRA) for charitable organizations.

These lawyers work exclusively or primarily with charities and nonprofits, giving them unique insight into the challenges faced by the sector. They stay current with evolving CRA policies, changing provincial legislation, and emerging trends in nonprofit governance.

What Services Does a Charity Lawyer Provide?

A specialized charity lawyer offers comprehensive legal services tailored to the unique needs of the charitable sector:

Registration and Incorporation:

• Charity registration with the CRA
• Preparation and submission of Application to Register a Charity
• Federal or provincial nonprofit incorporation
• Name reservation and approval assistance
• Drafting charitable objects and purposes that meet CRA requirements

Governance Documents:

• Bylaws creation and amendments
• Board policies and procedures
• Governance manuals
• Conflict of interest policies
• Investment and reserve policies
• Director agreements and codes of conduct

Compliance Support:

• Annual CRA filing assistance (T3010 returns)
• ONCA compliance and transition support
• Charitable activity reviews
• Related party transaction guidance
• Disbursement quota calculations
• Annual corporate compliance (Ontario, BC, federal)

CRA Representation:

• Audit response and representation
• Compliance agreement negotiations
• Appeals of CRA decisions
• Voluntary disclosure applications
• Penalty abatement requests

Operational Legal Services:

• Gift acceptance policies
• Planned giving documentation
• Charitable receipting guidance
• Fundraising compliance advice
• Employment agreements for executive directors
• Independent contractor agreements
• Service agreements and vendor contracts

Strategic Advice:

• Mergers and dissolutions
• Partnerships with other organizations
• Social enterprise structures
• International activities and grants
• Political activities guidance

Why Choose a Charity Lawyer for Your Canadian Nonprofit?

1. Expertise in Canadian Charity Law: Charity Lawyers possess in-depth knowledge of the intricacies of Canadian charity law, ensuring that your organization adheres to all pertinent regulations.
   
   
2. Customized Legal Solutions: They provide tailored legal advice and solutions to meet the specific needs of your charitable organization, whether it's during the incorporation process or ongoing operations.
   
   
3. Navigating Tax Implications: Charity Lawyers are adept at managing tax-related matters, including obtaining and maintaining tax-exempt status, which is crucial for the financial sustainability of charitable organizations.
   
   
4. Ensuring Due Diligence: They conduct thorough due diligence to safeguard your organization against legal pitfalls, ensuring that all activities align with charitable objectives.
   
   
5. Assisting with Governance and Reporting: Charity Lawyers guide you through governance best practices and reporting requirements, helping you maintain transparency and accountability.
   
   
6. Time and Cost Savings: While legal services require investment, a charity lawyer can prevent costly mistakes, CRA penalties, and registration delays that would cost far more in the long run.
   
   
7. Peace of Mind: Knowing your organization is legally compliant allows you to focus on your mission rather than worrying about regulatory requirements.

What to Expect During Your Initial Consultation

Your first meeting with a charity lawyer is an important opportunity to assess whether they're the right fit for your organization. Here's what typically happens:

Information the Lawyer Will Gather:

• Your organization's mission and planned activities
• Current legal status (unincorporated, incorporated, registered charity)
• Board structure and governance setup
• Funding sources and fundraising plans
• Timeline and urgency of your needs

Questions You Should Ask:

• What's your experience with organizations like ours?
• What's the typical timeline for our type of project?
• What's your fee structure?
• Who will be working on our file?
• What will you need from us?

What to Bring:

• Any existing organizational documents (articles, bylaws, policies)
• Financial information or budgets
• Information about your board members
• Details about your activities and programs
• List of questions or concerns

What the Lawyer Will Provide:

• Assessment of your situation
• Recommended next steps
• Estimated timeline
• Fee quote or range
• Overview of the process

After the Consultation:

• Written engagement letter or retainer agreement
• Clear scope of work
• Payment terms
• Timeline for next steps

Most charity lawyers offer free or low-cost initial consultations. This is your chance to ask questions and ensure you're comfortable working together.

How to Choose the Right Charity Lawyer in Canada

1. Experience and Expertise: Look for a lawyer with a proven track record in Canadian charity law, preferably one who has successfully represented charitable organizations similar to yours.
   
   
2. Client Testimonials and Reviews: Look for testimonials or reviews from past clients to gauge their satisfaction and the lawyer's proficiency in dealing with charity law issues.
   
   
3. Transparent Fee Structure: Look for a firm that offers fixed fees. It's important to verify that the law firm provides a transparent breakdown of their fee structure, which should encompass any potential additional costs that may arise throughout the legal process.
   
   
4. Accessibility and Communication: Effective communication is crucial. Choose a charity law firm who is accessible and responsive to your inquiries, keeping you informed throughout the process.
   
   
5. Commitment to Nonprofit Sector: A lawyer who demonstrates a genuine interest in the nonprofit and charity sector is more likely to understand the unique challenges and opportunities faced by charitable organizations.
   
   
6. Up-to-Date Knowledge: Charity law changes frequently. Your lawyer should stay current with CRA guidance, legislative updates, and sector trends.
   
   
7. Practical Approach: Look for a lawyer who understands both the legal requirements and the practical realities of running a charity with limited resources.
   
   
8. Network and Resources: A well-connected charity lawyer can refer you to accountants, fundraisers, and other professionals who understand the charitable sector.

Common Mistakes When Choosing a Charity Lawyer

Avoid these pitfalls when selecting legal representation for your charity:

Choosing Based Solely on Price: The cheapest option isn't always the best value. An inexperienced lawyer may take longer, require more revisions, or miss important issues that create problems later. Consider the total cost of getting it done right the first time.

Not Verifying Charity Law Experience: Don't assume all lawyers are equally equipped to handle charity matters. Ask specifically about their charity law experience, not just corporate or business law experience.

Failing to Ask About Success Rates: A lawyer should be able to discuss their track record with CRA applications and compliance matters. If they're evasive about their success rate, that's a red flag.

Not Clarifying Scope of Services: Make sure you understand exactly what's included in quoted fees. Does it include revisions if the CRA requests changes? Follow-up questions? Ongoing support?

Overlooking Ongoing Support Needs: Charity registration is just the beginning. Consider whether the lawyer provides ongoing compliance support or if you'll need to find someone new next year.

Not Checking References: Ask for references from similar organizations they've helped. A good lawyer should be willing to connect you with satisfied clients.

Ignoring Your Gut: If something feels off during your consultation—unclear communication, rushed explanations, or dismissive attitude—trust your instincts.

Not Getting Everything in Writing: Always insist on a written retainer agreement that clearly outlines services, fees, timelines, and responsibilities.

Red Flags to Watch For

Be cautious if a prospective charity lawyer:

Makes Unrealistic Promises: No lawyer can guarantee charity registration approval. The CRA makes the final decision. Anyone promising guaranteed approval or specific timelines they can't control should be avoided.

Has Unclear Fee Structures: If a lawyer can't clearly explain their fees or keeps adding "potential" charges without explanation, look elsewhere. Hidden fees create budget problems.

Lacks Specific Experience: General statements like "I've done some nonprofit work" aren't enough. Ask for specific numbers: How many charities have you helped register? How many CRA audits have you handled?

Shows Poor Communication: If they're unresponsive during the sales process, they'll likely be worse once you're a client. Professional communication should be prompt and clear.

Doesn't Provide a Written Agreement: Any reputable lawyer will provide a written retainer agreement. If they're reluctant to put terms in writing, walk away.

Dismisses Your Questions: Your questions deserve thoughtful answers. A lawyer who makes you feel stupid for asking is not the right fit for your organization.

Pressures You to Sign Immediately: Legitimate lawyers understand you need time to consider your options. High-pressure tactics are inappropriate.

Has Negative Online Reviews: While one or two negative reviews might be explainable, patterns of complaints about communication, billing, or quality should concern you.

Understanding Legal Fees for Charity Services

Legal fees for charity services vary based on complexity, location, and the lawyer's experience. Here's what to expect:

Fee Structures:

Fixed Fee Packages: Many charity lawyers offer fixed-fee packages for standard services like charity registration. This provides cost certainty and aligns the lawyer's interests with efficient service. Typical fixed fee packages include:

• Charity registration (complete package): $5,000 - $15,000
• Incorporation only: $1,500 - $3,500
• Bylaws preparation: $1,500 - $4,000
• Annual compliance review: $1,000 - $3,000

Hourly Rates: Some lawyers charge by the hour, typically ranging from $250 to $500+ per hour depending on experience and location. This works for unpredictable matters like CRA audits.

Retainer Arrangements: For ongoing support, some firms offer monthly or annual retainers that cover regular advice and compliance support.

What's Typically Included in Registration Packages:

• Initial consultation
• Charity name reservation
• Federal or provincial incorporation
• Drafting articles and bylaws
• Preparing Application to Register a Charity
• Drafting charitable objects
• CRA submission and follow-up
• Response to one round of CRA questions

Additional Costs to Expect:

• Government filing fees (incorporation: $200-$350, CRA filing: $0)
• Name search fees: $50-$100
• Courier or delivery fees
• Disbursements for copying or administrative costs
• Extra charges if CRA requests multiple revisions

Value of Investing in Proper Legal Guidance: While legal fees may seem expensive, consider the costs of doing it wrong:

• CRA registration rejections requiring complete resubmission
• Penalties for non-compliance ($500-$25,000+)
• Loss of charitable status and donation receipts
• Time spent fixing problems instead of advancing your mission
• Potential personal liability for directors

Proper legal guidance is an investment in your organization's future success and sustainability.

Questions to Ask a Prospective Charity Lawyer

Before hiring a charity lawyer, ask these essential questions:

About Their Experience:

1. How many charities have you helped register with the CRA?
2. What's your success rate with first-time applications?
3. Have you worked with organizations similar to ours?
4. How long have you been practicing charity law?
5. What percentage of your practice focuses on charities and nonprofits?

About Their Process: 6. What's the typical timeline for charity registration? 7. What information will you need from us? 8. How do you handle CRA questions or requests for additional information? 9. Will you be handling our file personally or delegating to junior staff?

About Fees and Costs: 10. Do you offer fixed fee packages or hourly billing? 11. What exactly is included in your quoted fee? 12. Are there any additional costs we should expect? 13. What happens if the CRA requires multiple rounds of revisions? 14. Do you offer payment plans?

About Communication: 15. What's your typical response time to emails or calls? 16. How will you keep us updated on progress? 17. Who should we contact if you're unavailable?

About Ongoing Support: 18. Do you provide ongoing compliance support after registration? 19. Can you help with annual T3010 filings? 20. Are you familiar with ONCA compliance requirements? (if in Ontario) 21. Do you offer support for CRA audits?

About Their Approach: 22. How do you stay current with changes in charity law? 23. Can you provide references from other charities you've helped? 24. What makes your approach different from other charity lawyers?

Don't hesitate to ask these questions. A good lawyer will appreciate your thoroughness and provide clear, confident answers.

Conclusion

Choosing the right charity lawyer is one of the most important decisions you'll make for your organization's success. The expertise, guidance, and peace of mind that a specialized charity lawyer provides can save you time, money, and compliance headaches while allowing you to focus on your mission. Whether you're registering a new charity, navigating CRA requirements, or ensuring ongoing compliance, having the right legal partner makes all the difference.

At B.I.G. Charity Law Group, we've helped over 5,000 charities and nonprofits across Canada navigate the complexities of charity law. Our team understands the unique challenges facing charitable organizations and provides practical, cost-effective solutions tailored to your needs. From charity registration to ongoing compliance support, we're here to ensure your organization operates on solid legal footing.

Ready to discuss your charity's legal needs? Schedule a FREE consultation with our team today. You can also reach us directly by phone at 416-488-5888 or email dov.goldberg@charitylawgroup.ca. Visit CharityLawGroup.ca to learn more about how we can support your charitable journey and help you make a greater impact in your community.

Frequently Asked Questions 

How much does a charity lawyer cost in Canada? 

Charity lawyer fees vary based on location, complexity, and experience. Fixed-fee packages for charity registration typically range from $5,000 to $15,000. Hourly rates range from $250 to $500+ per hour. Many firms offer free initial consultations to discuss your needs and provide a fee estimate.

Do I need a lawyer to register a charity in Canada? 

While it's not legally required to hire a lawyer for charity registration, it's highly recommended. The CRA rejects many applications due to errors in charitable objects, governance documents, or application forms. A specialized charity lawyer significantly increases your chances of approval and can save months of delays.

How long does charity registration take with a lawyer?

With a lawyer's help, charity registration typically takes 6-12 months from start to finish. This includes time to prepare documents, submit the application, and respond to any CRA questions. Without a lawyer, the process often takes longer due to rejected applications and requests for revisions.

Can a charity lawyer help with ongoing compliance? 

Yes, many charity lawyers offer ongoing compliance support including annual T3010 filing reviews, governance updates, policy creation, and advice on charitable activities. Some offer annual retainer arrangements for regular support.

What's the difference between a charity lawyer in Toronto vs. Vancouver? 

While provincial legislation differs (ONCA in Ontario, BC Societies Act in British Columbia), CRA requirements for federal charity registration are the same across Canada. A charity lawyer can typically help organizations anywhere in Canada, though they should be familiar with the specific provincial legislation where you'll incorporate.

Do I need a lawyer in my province or can they work remotely? 

Charity lawyers can work remotely with clients across Canada. Most communication happens via email, phone, and video calls. Choose a lawyer based on their charity law expertise rather than physical location, though they should understand the provincial legislation applicable to your organization.