Watch: Charities and Nonprofits
September 14, 2023
2 min read
What’s the difference? John Bromley unpacks the nuances and breaks down what sets registered charities and nonprofit organizations apart.
John’s Take:
The simplest way to think about what the difference is between a registered charity and a nonprofit is to know that a registered charity can issue you a tax receipt when you donate to them and a nonprofit cannot.
Both charities and nonprofits are the same type of corporation. Most people go, “Hey, they’re not a corporation”, but they are. They’re just a type of corporation that cannot be owned.
A registered charity takes it a step further than a nonprofit organization because to become a registered charity, you have to apply to the Canada Revenue Agency and prove to them that what you’re going to do is going to be exclusively charitable at law.
So what are the types of things that are charitable at law? The big categories are things that advance religion, things that advance education, and things that relieve poverty. Then, all other things that the Canadian courts over time have said are charitable; environment, theatre, art, and things like that.
How can you really tell? The best advice is to go to the CRA’s website and look up the charity listings. If you can find the name of the organization on their list of registered charities, then your organization is a charity, and if it’s not on that list, then it’s almost certain your organization is not a registered charity and is more likely to be a nonprofit.