Charity FAQs

Navigating all that legal mumbo jumbo that comes with charity registration is like getting pet hair all over your new black clothes. Getting a pet may be cute — or in this case —  registering your charity. But no one wishes to deal with the stress that comes with it.

The barrier to entry and cumbersome legal process can make you feel like you’re running around a clusterfuck of paperwork. And we get this. That’s why at B. I. G. Charity Law group, we are exclusively dedicated to helping you sort through the clutters of charity registration and charity operations in Canada. 

Before diving right in, we’ve stepped into your shoes and chalked out a few questions that may be top of mind. You want answers? Join us as we crack this code!

First off. Do all charities in Canada need to be registered? 

A fine line must be drawn between a not-for-profit and charity to address this question. 

Not-for-profit organizations in Canada do not qualify for the advantages that charities enjoy because they fit in a broad range of activities like civic improvement’, pleasure, recreation, and social welfare. 

Charities on the other hand are aimed at strictly charity operations like relieving poverty, advancing education, religion, and other social causes that are beneficial to the community. 

So, if you’re looking to operate as a charity and issue donation receipts while shutting the door on the only other thing that is certain in life apart from death — taxes, then yes — you have to apply to be registered with the  Charities Directorate of the Canada Revenue Agency (CRA). Else, you won’t enjoy any of the ‘sugar dad/mom’ privileges that the agency provides. 

How longggggggggg does it take to register a charity in Canada? 

Not as long as the ‘g’s in that. But setting up a simple foundation charity in Canada requires the preparation of certain documents which will take just about 4-6 months for a simple foundation charity to be fully processed. That of an operating charity application will usually take within 6-8 months. 

Pretty long eh? Could be longer if you don’t have the right guys behind the wheel of this procedure. 

How Do I register a Charity Organization? 

Not to seize this opportunity to place a cool ad for our firm. But this is where we slap an ‘S’ (Ohh, Superman) on our chest for you. You start with a consultation.

This consultation will determine that your intention to set up a charity is not a misguided one. If you’re all clear to establish a registered charity, it is important to obtain professional advice from a lawyer (again, who would you rather call? WINK) with demonstrable savvy on charity applications, the requirements and processes.

What are the conditions for registration?

A Canadian registered charity is a public or private charitable organization that MUST be founded in, and resident in Canada. 

It MUST be operated solely for charitable purposes (remember the fine line between Charity Organizations and Non-Profits) and must devote its resources to charitable activities. The revenue of a charity organization is not taxable; this means that it is not legally required to pay income tax.

How much does it cost to register a charity in Canada? 

At B. I. G. Charity Law Group, we not only offer consultation services, but we’re also vast in charity registration and charity operations. The cost of setting up a Canadian registered charity is not fixed (even though we thought differently to make ours fixed and transparent for our clients). With a ton of factors to be considered, the registration of a charity organization that is just starting out may cost between $4,000 - $15,000. 

One very crucial factor, though, is the mode of charity operation. To put it mildly, the registration cost of a charity that only makes grants to other registered charities will be different from that of a charity that will carry out, say, health care work in Canada or poverty reliefs.

The Perks of registering a charity organization 

Registering a charity organization has its FOMO-inducing (Fear of Missing Out) benefits. 

— For one, the registered status of a charity affords it the legal qualification to accept gifts from individuals and other registered bodies and can issue official receipts for such gifts or donations received. These gifts received may be in cash or kind. A gift in kind refers to a gift of any ‘kind’ (pun unintended) other than cash — it may be capital property, depreciable property and property for personal use. It may also be a residual interest or right of any kind in a property, a licence, a share, or an inventory of a business. 

Contributions of services, that is, of time, skills or effort are however not considered gifts in kind; they are considered services provided voluntarily.

— Another benefit of charity registration is that it can give out gifts to other organizations but only if the other organization is legally permitted to issue a tax receipt for the gift. This legal permission allows the organization to be recognized as a qualified donee in the eyes of the law.

After registering my Charity. What next? 

Having registered, a charity or a not-for-profit organization will be issued a Business Number (BN). A complete BN consists of two parts: the registration number and an account identifier. 

The account identifier of a registered charity always starts with the letters “RR”. This registration number is exclusive to the charity and under no circumstance can it be lent out. 

And because a charity is responsible for every receipt issued under its name, it must account for corresponding donations in its books. As such, lending the charity’s registration number to another organization could lead to the revocation of its registered status.

Final Thoughts

Charity registration in Canada involves challenges, obligations and its accompanying costs. So, if you’re to set up one, it strikes us as thoughtful for you to ensure that your goals mirror what a registered charity serves to accomplish. 

If the goal is to carry out a specific kind of program or activity to achieve charitable aims, there are bountiful other alternatives to creating a separately registered charity. You have the option of working with an already existing charity. You can also rather operate as a non-profit or operate as a business. Whatever rocks your boat!