Obtaining charitable status is a critical step for non-profit organizations seeking to operate effectively and sustainably. Charitable status enables organizations to access tax benefits, issue tax receipts to donors, and opens up opportunities for fundraising. However, obtaining charitable status is not an easy task. The Canada Revenue Agency (CRA) has specific requirements that organizations must meet to be approved for charitable status.
When evaluating applications for charitable status, the CRA looks at several factors, including:
- Charitable purposes: The CRA examines the organization’s proposed charitable activities to ensure they meet the requirements of the Income Tax Act. The activities must be for the benefit of the public or a significant segment of the public and must fall within the categories of charitable purposes recognized by the CRA.
- Governance: The CRA assesses the organization’s governance structure, including the composition of the board of directors, conflict of interest policies, and financial management practices. The organization must demonstrate that it operates in a transparent and accountable manner.
- Financial viability: The CRA looks at the organization’s financial statements, including its sources of funding, to ensure that it has the financial resources to carry out its charitable activities.
- Public benefit: The CRA evaluates the organization’s activities to determine whether they provide a tangible public benefit. The activities must be consistent with the organization’s charitable purposes and must not provide a private benefit to any individual.
Navigating the charitable status application process can be challenging, but a Toronto charity lawyer can assist you in preparing a successful application. A lawyer can provide legal advice and guidance on meeting the CRA’s requirements, ensuring that your organization’s activities meet the criteria for charitable purposes, and drafting governance and financial management policies that comply with the CRA’s requirements.
In addition, a charity lawyer can assist with the preparation of supporting documentation, including financial statements and board resolutions, and help you navigate the CRA’s review process, including responding to any inquiries or requests for additional information.
In summary, obtaining charitable status can be a significant milestone for non-profit organizations, enabling them to operate more effectively and achieve their charitable purposes. By working with a Toronto charity lawyer, you can increase your chances of success in obtaining charitable status and ensure that your organization is well-positioned for long-term success. If you have any questions, please contact us at info@falconlawyers.ca.
