Anecdotally, it feels like the charity application process has become harder. We have before published stats on the registrations of Canadian registered charities by the Determinations section of the Charity Directorate and so I thought I would crunch some numbers. I compared 2008 to 2012. In 2008 59% of applicants were registered compared to only 46% in 2012. That is quite a big difference. Is this good or bad?
Decision Total (2012-2013)
Registrations 2,060
Denials 283
Incomplete Applications 1,636
Withdrawals 271
Abandoned 206
Total Applications 4,456
Decision Total (2008-2009)
Registrations 2,724
Denials 694
Incomplete Applications 914
Withdrawals 252
Total Applications 4,584
There is no real answer to the question. The increased scrutiny probably catches some bad charities and bad people but mostly just catches people who are well meaning but don't understand the nuances of the Income Tax Act and CRA requirements. Also CRA is reviewing both the objects and activities of charities. Many charities, especially those who will deal with non-qualified donees, don't anticipate that CRA will require upfront (even before the entity is established) that you have draft agreements prepared to cover these relationships and detailed information on proposed projects. You also need a certain degree of perseverance in applying for charity status. As CRA is asking for more, the costs of obtaining charitable status are probably increasing if you use a professional advisor. I can only imagine that CRA knows how expensive it is to get rid of bad charities so they are generally more careful to ensure that the applicant understand the obligations of a registered charity.