CRA Compliance

Here’s what separates the unqualified charities from the qualified:

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     · If the organization is set up to help individuals or private groups, such as helping an individual or family come to Canada for medical care, it will not qualify as a charity.

     · Organizations that give personal benefits or funds to their shareholders, members, or trustees will not qualify to be registered.
Although personal benefits are not permitted, registered charities can still pay decent salaries and other expenses for their general operations.

      · A registered charity can use a small portion of its resources for social activities, but the activities can not be the main purpose of the charity, and the social activities should be in order to fundraise for its primary activities.

Therefore, organizations such as social clubs, leagues, and lodges will not qualify. Service clubs, which are a combination of charitable and social purposes, will also not qualify.

     · If the purpose of the organization is to promote a political party or support a specific candidate running for a position in public office, it will not qualify as a charity.
For more details about political activities of charities, see the CRA’s Public Policy Dialogue.

     · Organizations may conduct sports activities if these activities are a small portion of their purposes or are done in order to implement their purposes, such as helping at-risk youth. However, if the organization’s main purpose is to promote sports, like minor hockey leagues, they will not qualify as a charity.
Read more about the CRA’s policy regarding sports and charitable organizations. Bear in mind that amateur athletic associations can have similar privileges to registered charities. Here are the criteria regarding amateur athletic associations.

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