General requirements for charitable registration

Guidance

Reference number
CG-017

Issued 
November 2, 2012

1. An organization must meet a number of general requirements to qualify for charitable registration under the Income Tax Act. After registration, registered charities (which include: charitable organizations, public foundations, and private foundations) must continue to meet all registration requirements in order to retain their registered status. Some of the main requirements relate to the following:

• Charitable purposes and activities

• Public benefit

• Public policy dialogue and development activities

• Business activities

• Operating through intermediaries

• Prohibited or illegal activities

• Canada’s anti-terrorism legislation

Charitable purposes and activities

2. Purposes (also known as “objects”) are the objectives that an organization is created to achieve. Activities are the ways in which an organization furthers its purposes. To be eligible for charitable registration, an organization must show that each of its purposes is charitable at law, and that its activities further these charitable purposes in a way that complies with the requirements of the common law and the Income Tax Act. For more information, see Guidance CG-019, How to draft purposes for charitable registration.

3. Since activities can potentially further more than one purpose, an organization must show why and how each activity is undertaken, as well as its beneficiaries. For more information, go to What is charitable?

Public benefit

4. Registered charities must have purposes that deliver, or are capable of delivering, a charitable benefit to the public or a sufficient section of the public. For more information, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.

Public policy dialogue and development activities (PPDDA)

5. The Income Tax Act permits a charity to fully engage without limitation in PPDDAs that further its stated charitable purpose, provided they never support or oppose a political party or candidate for public office. In other words, under the Income Tax Act, a charity is free to advocate for any change to a law, policy, or decision of government that would further its stated charitable purpose. For more information, see Guidance CG-027, Public policy dialogue and development activities by charities.

Business activities

6. Registered charities must limit business activities to those that relate to their charitable purposes, although private foundations may not carry out any business activities, related or unrelated. A related business activity is a commercial (revenue‑generating) activity that is related to a charity's purposes–meaning linked and subordinate to that purpose, or substantially run by volunteers. For more information, see Policy statement CPS‑019, What is a related business?

Operating through intermediaries

7. A registered charity must maintain direction and control over its resources (for example, funds, personnel, and property) and activities. This includes any activities carried out on its behalf by an intermediary (an individual or non-qualified donee that the charity works with to carry out its own activities). When working through an intermediary, it must ensure that an appropriately structured arrangement is in place. For more information, see Guidance CG‑002, Canadian registered charities carrying on activities outside Canada, and Guidance CG‑004, Using an intermediary to carry on a charity's activities within Canada.

Prohibited or illegal activities

8. Purposes and activities that are illegal in Canada or contrary to Canadian public policy are prohibited. For more information, see Policy summary CPS-024, Guidelines for registering a charity: Meeting the public benefit test, Guidance CG-002, Canadian registered charities carrying on activities outside Canada, and Guidance CG-004, Using an intermediary to carry on activities within Canada.

Canada’s anti-terrorism legislation

9. All charities must comply with Canada’s anti-terrorism legislation, including those contained in the Criminal Code of Canada. Charities are responsible for ensuring that they do not operate in association with individuals or groups that are engaged in or support terrorist activities. This applies whether or not the entity is listed under the Criminal Code of Canada.

10. For more information, go to Checklist for charities on avoiding terrorist abuse and Charities in the international context.