Organizing a charity is a specialized area of law. It is rooted in 400 years of common law history and requires a working knowledge of the regulatory regime imposed by the Income Tax Act.
Achieving charitable status in Canada hinges on the requirement that the prospective registrant be organized as a group (i.e., a corporation, charitable trust, or unincorporated group). The next step is to ensure the charitable nature of each object clause in the group’s organizing documents. Case law has identified four general charitable objects: Relief of Poverty, the Advancement of Education, the Advancement of Religion, and Other Purposes Beneficial to the Community. CRA has also expanded this list through administrative interpretation. While each of the organization’s objects must reflect one of these categories, charitable objects on their own are not enough for an organization to secure charitable status. The activities of the organization must actually advance the objects as well and ensure a public benefit.
Here are several practical tips to help ensure that an organization meets the requirements for charitable status. First, objects must be drafted as goals to be achieved, not the means of doing so. Second, the number of objects should be kept to a minimum. Third, all objects must be clearly stated. As well, it may be beneficial to submit objects to the Charities Directorate prior to a group’s incorporation to avoid future obstacles to charity status if one or more objects are not qualified as charitable.
To access Adam Aptowitzer’s full article and read more information on obtaining charitable status, visit How to Obtain (With The Least Amount of Pain) Charitable Status.
