Differences between a registered charity and a non-profit organization
Registered charities and non-profit organizations (NPOs) both operate without the intention of making a profit, but they are not the same.
Registered charities
Under the Income Tax Act, registered charities are a type of qualified donee that are allowed to issue official donation receipts. They are established and operated for exclusively charitable purposes. They do not pay income tax.
Charitable purposes fit within these categories:
- Relief of poverty
- Advancement of education
- Advancement of religion
- Other purposes that benefit the community
A registered charity must use all of its resources for charitable activities that advance its charitable purposes.
Examples of types of registered charities based on charitable purpose
Relief of poverty
- Food banks
- Soup kitchens
- Low-cost housing units
Advancement of education
- Colleges
- Universities
- Research institutes
Advancement of religion
- Places of worship
- Missionary organizations
Purposes beneficial to the community
- Animal shelters
- Libraries
- Volunteer fire departments
If you are interested in becoming a registered charity, go to Apply to become a registered charity.
Non-profit organizations
NPOs are associations, clubs, or societies that are organized and operated exclusively for social welfare, civic improvement, pleasure, recreation, or any other purpose except profit. An NPO is not a type of qualified donee and cannot issue official donation receipts.
Examples of types of non-profit organizations
Social, recreational, or hobby groups
- Gardening clubs
- Chess clubs
- Book clubs
Certain amateur sports organizations
- Hockey associations
- Baseball leagues
- Soccer leagues
Certain festival organizations
- Parades
- Seasonal celebrations
As an NPO, you may be exempt from paying income tax. For more information, go to Non-Profit Organizations.
If you are operating as a charity, you cannot be considered an NPO.
Topic | Registered charity | NPO |
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Purposes |
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Registration |
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Charitable registration number |
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Tax receipts |
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Spending requirement (disbursement quota) |
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Returns |
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May have to file an annual:
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Personal benefits to members |
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Exception: An NPO may choose to provide its resources to a proprietor, member or shareholder that is a club, society or association that has the primary purpose and primary function of the promotion of amateur athletics in Canada |
Tax exempt status |
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GST/HST |
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