Types of registered charities (designations)

There are three types of registered charities. Every registered charity is designated as a:

• charitable organization
• public foundation
• private foundation

The designation a charity receives depends on its structure, its source of funding, and its mode of operation. A registered charity is notified of its designation by the Canada Revenue Agency (CRA) when it receives a Notice of Registration. All registered charities, regardless of their designation, can issue official donation receipts for income tax purposes.

If a charity has only one director, trustee, or other official, it will automatically be designated as a private foundation upon registration. To be designated as a charitable organization or public foundation, more than half of the directors, trustees, or other officials must be at arm's length. If there is only one, this is not possible.

To determine the designation of a registered charity, the CRA applies the following criteria:

Charitable organization

• it is established as a corporation, a trust, or under a constitution
• it has only charitable purposes
• it primarily carries on its own charitable activities
• it has more than 50% of its directors, trustees, or like officials dealing with each other at arm's length
• it generally receives its funding from a variety of arm's length donors

Public foundation

• it is established as a corporation or a trust
• it has only charitable purposes
• it generally gives more than 50% of its income annually to other qualified donees, usually other registered charities, but it may carry out some of its own charitable activities
• more than 50% of its directors, trustees, or like officials deal with each other at arm's length
• it generally receives its funding from a variety of arm's length donors

Private foundation

• it is established as a corporation or a trust
• it has only charitable purposes;
• it carries on its own charitable activities and/or it funds other qualified donees, usually other registered charities
• 50% or more of its directors, trustees, or like officials do not deal with each other at arm's length, and/or
• more than 50% of its funding comes from a person or group of persons that control the charity in any way or make up more than 50% of the directors, trustees, or like officials of the charity

Related topics

• Asking for a re-designation

References

• CG-010, Qualified donees