How To Draft Purposes For Charitable Registration

A. Introduction

1. The CRA assesses applications for charitable registration under the Income Tax Act, and ensures that registered charities continue to meet all related legal and administrative requirements.

2. In this guidance, unless otherwise stated, the terms:

• “charity” and “registered charity” include all three types of registered charities as defined under the Income Tax Act: charitable organizations, public foundations, and private foundations Footnote 1
• “organization” includes applicants for registration as charitable organizations, public foundations, or private foundations, as well as already registered charities

3. The CRA assesses eligibility for registration as a charity under the Income Tax Act using a “two-part test” to determine whether an organization:

• is constituted for purposes (sometimes referred to as “objects”) that are exclusively charitable and define the scope of activities that can be engaged in by the organization
• subject to limited exceptions, devotes its resources to charitable activities that further those purposes

4. The purposes of an organization are the objectives that it is created to achieve. Each of an organization’s purposes must be clearly stated in its governing document, such as letters patent, articles of incorporation, trust, or constitution.

5. To help organizations that are applying for registration as well as registered charities that want to change existing purposes,Footnote 2 the CRA provides examples of charitable purposes. While these examples can be helpful to many organizations, they may not include purposes that meet all needs. As a result, it is often necessary to draft purposes specific to an organization. This guidance is a resource to support that process.

6. Using example purposes, or applying this guidance, will not in itself guarantee that an organization is eligible for registration. However, drafting purposes according to the approach set out in this guidance, or using example purposes, should facilitate the CRA’s assessment of an organization’s eligibility for registration under the Income Tax Act. Organizations that describe their purposes in a different way may still be able to show that the purposes meet Canadian registration requirements.

7. In addition to having charitable purposes and devoting its resources to charitable activities that further those purposes, there are other legal requirements that must be met for an organization to be registered under the Income Tax Act. For detailed information about registration requirements, go to Guidance CG-017, General requirements for charitable registration.