Group insurance rates for registered charities
March 5, 2002
Charitable purposes - Whether organization formed to negotiate, purchase, administer, and supervise group insurance rates for registered charities can be registered as a charity
To clarify the Directorate's policy regarding registration of organizations established to negotiate, purchase, administer, and supervise group insurance rates for registered charities.
1. An organization established to collectively purchase goods and services on behalf of a group of registered charities is charitable if it promotes the efficiency and effectiveness of these charities. If, by grouping together, the beneficiary registered charities are able to obtain lower premium insurance rates, thereby realizing economies of scale, the organization may be registered.
2. The governing documents of the organization should contain wording that clearly expresses the organization's intent to promote the efficiency and effectiveness of other registered charities, and the manner in which it will accomplish this. It should also be evident that the underlying reason for the organization's registration is to provide lower than fair market insurance rates to a group of registered charities. Further, 90% of the recipient beneficiaries must be registered charities and the other 10% should be potentially registerable.
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