Every organization that wants to apply for charitable status must have a legal structure and must be a charitable organization, a public foundation or a private foundation. Other details about your organization and its finances must also be included in your application.
Unless it is an internal division of another registered charity, organizations applying to become a charity must have a legal structure.
Charitable organizations can be incorporated (for example as a non-profit) or established by a constitution or trust document.
Public or private foundations can also apply for charitable status. They must also be incorporated or established by a trust to be able to apply for registration as a charity.
Incorporating documents, bylaws and a document confirming that the organization is in good standing with their governing body must be included with the application.
When people are acting at arm’s length it means that there are acting independently. It is assumed that people who are related by blood, marriage, common-law partnership or adoption are not at arm’s length from each other. Parties who are not related can also be considered to not be at arm’s length when they, for example, have business connections.
An organization must be a charitable organization, a public foundation or a private foundation to be registered as a charity. Your designation will depend on whether you provide money to other charities, where your funding comes from and the percent of your officials that are at arm’s length.
Charitable organizations do their own charitable work. More than 50% of the officials must be at arm’s length from each other.
Public foundations give more than 50% of their income to other charities, although they may also carry on their own charitable activities. More than 50% of the officials must be at arm’s length from each other.
Private foundations do their own activities or give to other charities but more than 50% of a private foundation’s funding comes from a person or group that also controls the foundation in some way. At least 50% of officials in a private foundation must be at arm’s length.
The current legal name of the organization, the operating name (if different than the legal name) and any previous names the organization operated under must be provided. If a business number has been assigned it must be recorded on the application. A mailing address must be provided.
If there has been any previous contact with the Charities Directorate the reference number assigned to any contact must be listed. If an organization has ever been registered as a charity before the name it was registered under and the business number it was using must be listed.
The first and last names of directors, trustees, officers and any other official must be provided, as well as what position they hold in the organization. The addresses, occupations and dates of birth for all these people must also be included.
This is the place where the organization will carry out its business.
This is where these records are kept. It must be an address not just a post office box.
You must provide the name of the person who will be your contact with the Charities Directorate. The person’s name, address, telephone number and fax number must be provided. If the person is an official of the organization only their name needs to be provided.
If your organization has been in operation for at least one Financial Statements for that year must be included.
Organizations must complete a projection of what the organization expects to spend and receive over the next fiscal year.
Organizations must include the date of their fiscal year-end. This determines the start and end of the year for budgeting and financial statements purposes. This may have already been chosen when the organization incorporated. It can be a calendar year or some other 12 month period. If an organization is registered as a charity it cannot change its fiscal year-end without the approval of the Charities Directorate.
A detailed list of the sources of any revenue the organization expects to receive must be completed. This includes gifts, grants, money raised from fundraising, revenue from the sale of goods or services and any other revenue from any source.
Each charitable activity the organization plans on doing must be listed along with the amount the organization expects to spend on each activity. Money that will be spent on fundraising, sale of goods or services and political activities must be detailed.
How much will be spent on administration and management must also be included. Details such as the salary and other expenses for administrative personnel as well as amounts for office supplies, printing, and travel must be provided. Costs such as printing, travel and rent are not considered administration or management expenses if they are directly related to the organization’s charitable purpose. For example, travel to provide services of the charity would not be an administrative expense but travel for attending a board meeting would be.
If any revenue is from outside of Canada or any expenditures will be for activities outside of Canada this must be recorded. The source of the revenue coming from outside of Canada and what the money will be used for must be reported. If resources will be used outside of Canada, the amount that will be used, and what it will be used for must be recorded.
Assets include money in the bank, investments and capital assets. Capital assets are things like cars other property. The cost or the fair market value of assets must be recorded. Any money the organization owes must be included as a liability. This could be a mortgage or money owed for services the organization has received.