Top 10 things you should know about Canadian charity applications with the Charities Directorate

Applying to be a registered charity in Canada is not just getting another number from CRA, like opening a payroll account or HST account. Many people know this, but unfortunately, many don’t. Having 10 lawyers who just work with non-profits and charities means that we have a lot of experience in dealing with charity applications.  Unfortunately, too many of the charity applications we get involved with are mid-course – the group has already applied, not understanding some of the complexities and only later they realize they need assistance from lawyers who have a lot of experience in this area.

Here are some top things that people should understand about charity applications:

1. It takes between 4-6 months typically for CRA to review and approve the charity application after the CRA has received the complete application. This timeline is much better than it used to be. While the application timeline depends on the complexity of the charity application, it also depends largely on the care taken in properly preparing the charity application.
2. Most charity applications are not successful. It is not because the organization is bad, but because there are hundreds of requirements for being a registered charity in order to be registered, and the organization must meet all of the requirements. Being a registered charity is more than just doing “good stuff”.
3. The charity application should be done online. Otherwise, expect a significant extra wait, assuming that CRA even gets your application.
4. CRA does not just look at your Charity application. They look at the attachments and, more importantly, anything publicly available, such as websites and social media. In addition, it will probably not surprise you that CRA has access to other private resources and information.
5. Charities need to have exclusively charitable objects. That means every object has to be charitable, not most objects. A lot of care needs to be taken as to how these objects are prepared.
6. CRA scrutinizes not just the objects, but also the charitable activities. CRA has many guidances on what is appropriate for a Canadian registered charity that could be relevant to a charity application.
7. For a charity application to be successful, it needs to be complete. Please read the application carefully and understand each question and answer each question.  Unfortunately, many people when looking at the CRA questions, don’t understand what CRA is actually asking for and therefore, this may undermine your charity application.
8. The charity application process has changed a number of times over the last 20 years. Sometimes in very significant ways. Don’t rely on old information or advice from someone who did a charity application a long time ago.
9. You don’t need to have been around for years (or even one year) to apply for charity status! You don’t need famous or important people to be involved to get charity status!
10. While registered charity status is beneficial for some organizations, it is quite problematic for others.  Often, groups apply for registered charity status and it is not helpful but also creates numerous additional regulatory requirements for an organization.  Sometimes, a group should not apply for charity status at all, but sometimes the group should set up a separate entity that will apply for charity status.

While you don’t need to use a charity lawyer who is very familiar with the charity law and the application process, it may be helpful in many cases.  Keep in mind that becoming a registered charity is one thing, and operating as a registered charity is another, and it can be helpful to have legal guidance along the way.