Community Resource Centre

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Revenue Canada
If you are thinking about becoming a charity go to this link first.

The BC Centre for Non-Profit Development is a good resource for non-profits and charities in today's world of charitable requirements.

Funding Plans
Do you have a fundraising plan that everyone in the organization is working towards?

Should we become a registered charity?

Many Non Profit Organizations (NPO) are asking themselves if they should become a registered charity.  There are two main reasons to ask this question.  The first is to be able to provide tax receipts to donors.  The second is to be able to receive money from organizations that only provide funding to charities.   However, this is not a step that should be taken lightly, nor is it a status that is being given lightly by the Federal government.  There are some considerable consequences to becoming a charity.  Besides the increased administrative role in issuing, maintaining and reporting donations received, rigorous financial controls must be in place to determine how much you can spend, where you can spend it, and who it can go to.  Finally, once you are a charity, you cannot simply close it down when you have finished a project or move into a new area of activity. If you are no longer meeting the spending requirements in accordance with the purpose of your charitable charter, then you must dissolve the charity.  When a charity is dissolved, all of the charity's assets must be given to another charity.

Just because a NPO may want to become a charity, it does not mean that Revenue Canada Agency will grant you that status.  You could spend one to two years applying for charitable status simply to be rejected by Revenue Canada.  There can be many reasons for being turned down when requesting a charitable status so a good first step would be to look at the  Canada Revenue Agency  website and start answering whether or not your organization is ready and needs to take that step.
  1. Is your organization resident in Canada?
  2. Is it important for your organization to be able to issue official donation receipts, and/or receive gifts (e.g., grants) from other registered charities?
  3. Does your organization have exclusively charitable purposes?
  4. Will your organization be able to recruit volunteers and staff members on an ongoing basis to carry out your charitable purposes and activities?
  5. Does your organization have the necessary skills and resources to meet all of the obligations of registration?
  6. Is your organization aware of the consequences of not continually meeting all of the obligations of registration as a charity?
  7. Does your organization have enough support to garner the necessary donations or funding to fulfill your charitable purposes and carry out your activities?
  8. Is your organization willing to give all its assets to another registered charity if, and when, your organization ends its operation?

Alternative routes to foundation funding.

Another way to access funds from foundations/charities is to set up a contract to deliver services.  Though in terms of  program monitoring, accountability and  reporting mechanisms it may mean that your organization has more of an administrative burden, it would most likely be the same level or less of a burden that you would need to maintain your own charitable status.  The end difference would be that your organization would retain greater flexibility over the long term.  As a NPO you can combine differing social programs under one roof  and access funding from different charities for each piece. A charity with a restricted "Charitable purpose" may be limited to simply one of the program areas..

A good place to start thinking about this alternative is "Contracting non-qualified donees" by Stacey Corriveau and Richard Bridge of BC Center for Non-Profit Development.  The package contains a list of basic elements that Canada Revenue Agency deems necessary for a charity to show that it has had control over the expenditure of funds to a non-qualified donee in accordance with the foundation's charitable purpose.  Also, there is a copyright-free contract included in the package that can be used as a template for non-profits to contract with charities.

Another route is to partner with institutions considered to be qualified donees.  These could be schools, municipal and provincial government agencies and existing charities. Foundations would be able to provide money to those organizations which would in turn be able to give the money to your NPO.  But the bottom line for this alternative is that you have to have good accounting, reporting and evaluating structures in place to be able to respond to your partner's financial and administrative oversight requirements.