Applying for Registered Charity Status

February 24, 2018

RC191 - Qualified Donee Becoming a Prescribed University Outside Canada (CRA) updated

CRA has recently updated their guidance RC191 - Qualified Donee Becoming a Prescribed University Outside Canada (CRA).  The changes are minor.  They have updated the Charities and Giving links to the new Canada.ca website.  For a more in-depth discussion of a foreign university applying to be a Canadian foreign prescribed university our article "Foreign Universities Applying for Prescribed University Status in Canada 2018" may be of assistance.

February 15, 2018

Finally the shoe has dropped on registered charities and they must update their tax receipts

Last year CRA moved their website from www.cra-arc.gc.ca/chrts-gvng/ to the super cool https://www.canada.ca/en/revenue-agency/services/charities-giving/charities.html   Ok it was not CRA moving their website but they were dragged kicking and screaming to the Government of Canada website.  Giant waste of time and necessitating many non-profit and charitable organizations having to update links etc. Well I was wondering when CRA was going to tell registered charities that they should update their official donation receipts to reflect the new address.  All official donation receipts are supposed to have certain mandatory information including the "Name and website of the Canada Revenue Agency".  Well then I saw it. 

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January 27, 2018

Our directory of top resources for Canadian registered charities

Over the last 10 or more years, we have published over 2500 blog posts.  Except for a few avid readers, that might be a little overwhelming so we have started to create a directory of some of the top resources for Canadian charities.  This will be particularly helpful for those who are new to registered charity compliance issues or to the charity sector.

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January 25, 2018

Are you prepared for CHAMP?  It is happening in November 2018 whether your are ready or not

The CRA has been working for years on the Charities IT Modernization Project or CHAMP.  CHAMP is going to affect charity applications in that they will need to be filed electronically, as of November 2018.  CHAMP will also allow charities to file their T3010 online, although charities can continue to file their T3010 manually if they so choose.   

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January 22, 2018

Common Paragraphs for an Administrative Fairness Letter from the Charities Directorate of CRA

Here is our note "Common Paragraphs for an Administrative Fairness Letter from the Charities Directorate of CRA". It contains explanations of common concerns that CRA may find during an audit that, unless appropriately addressed, may result in various penalties, sanctions or even revocation.

January 09, 2018

Top 68 CRA Reasons for Denying your Canadian Registered Charity Application

In this article "Top 68 CRA Reasons for Denying your Canadian Registered Charity Application" we have obtained from CRA a list of some of the most common and not so common reasons for CRA to be concerned with a charity application.   

January 03, 2018

CRA letter on when school boards in Canada are public bodies that perform a function of government

School boards can be registered charities.  But school boards can also fit into another category of qualified donee that provides the ability to issue receipts with far less compliance obligations.  CRA recently released a letter discussing whether school boards are public bodies that perform a function of government.

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December 19, 2017

CRA Responds to Questions At Blumbergs’ Canadian Charity Law Institute On CHAMP

The CRA has responded to some questions that were posed at our recent Charity Law Institute session.  The presentation by Tania Lewis and Jennifer Fraser of the Charities Directorate was on the new CHAMP or Charity Modernization Program of CRA which will result in new charity applications being filed electronically and the possibility for registered charities to file their T3010 Registered Charity Information Returns online.  

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November 10, 2017

CRA Launches Charities Education Program

The CRA has recently announced the launch of a new program called the Charities Education Program.  The program is going to have CRA auditors visit charities but not in the normal audit capacity.   The CRA anticipates that about 500 of these visits will take place per year.  We will see how the program works out but there are going to be some reservations about this new initiative.   If this is an educational program are CRA auditors the best people to do the program? Will charities be confused by this program and the difference between this program and the regular audit program?  Could the resources being used for this program rather be used for responding to written correspondence and charity applications sooner, because they are both taking about a year right now?  Time will tell how the program works out.    

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October 28, 2017

Prescribed foreign universities can have their qualified donee status be revoked by the CRA

Canada has an unusually generous system in which foreign universities that have a couple of Canadian students studying there can obtain the equivalent of Canadian registered charity status with almost none of the obligations. Here is an article describing that process.  However, CRA can remove charities from the list if they don't continue to meet the requirements (for example to have the 2 students) or they don't respond to CRA requests every 5-10 years for confirmation of information. 

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October 24, 2017

CRA’s Draft Guidance Advancement of religion and charitable registration is released through ATIP

There are approximately 32,000 registered charities in Canada that are religious charities. They account for approximately 40% of all the registered charities in Canada.  It is important that Canadian registered charities are aware of CRA‘s views on what is religion and when are activities of religious charities that are ostensibly religious not in fact “advancing religion”.  Or when are such activities providing undue private benefit.  We just obtained a copy of CRA's draft Guidance Advancement of religion and charitable registration and it is important that charities and others interested in this topic are aware of the guidance.

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October 01, 2017

Letter from CRA rulings to the Charities Directorate on aboriginal bands

In July 2016 the Income Tax Rulings Directorate of CRA wrote to the Charities Directorate clarifying the procedure for reviewing whether aboriginal bands should be viewed as qualified donees.  Very importantly the CRA ITR Directorate concluded "it is our view that all bands created under the Indian Act meet the criteria to be considered municipal or public bodies performing a function of government in Canada for the purpose of paragraph 149(1)(c) of the Act and are therefore exempt from income tax." 

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September 28, 2017

CRA reminds those applying for charity status about privacy and collection of information on them

CRA has just published a lengthy page on Personal information of directors, trustees and like officials that discusses how the Charities Directorate uses personal information provided in a charity application and in your registered charity's annual filings.

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September 27, 2017

CRA discusses charity applications by “head bodies” and their “internal divisions”

The CRA has published its Guidance CG-028 Head bodies and their internal divisions on September 22, 2017.  It discusses what is a head body and what is an internal division and what CRA will require for registration as a charity.   This guidance will be helpful not only for charity applications by internal divisions but also for head bodies and internal divisions in clarifying their requirements after registration.   This guidance is not relevant to most charity applications where there is a corporation or group that is not an internal division of a registered charity.   CRA published another note saying that they will be mailing to all internal divisions separate business numbers so they can access the CRA's My Business Account portal.  Such access will be important for charities when they are doing electronic filings, which is anticipated to come into place in October 2018. 

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June 21, 2017

CRA will no longer review charity applications with draft governing documents

The CRA sent out an email to certain stakeholders on June 20, 2017 announcing that they will no longer be accepting charity applications with draft governing documents.  We will discuss the impact below. For those wanting charity status, you will need to at least establish the organization ie. incorporate the corporation, establish the trust etc. if you want CRA to review your charity application. Practically, since December of 2014, we have not used draft applications and we have discouraged others from using them because of changes to the process which made them less useful.

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February 26, 2017

CRA updates information sheet for prescribed university applications

CRA recently updated their guidance with respect to becoming a prescribed university outside of Canada. There are about 600 foreign prescribed universities and they can issue official donation receipts similar to a Canadian registered charity.  The updated CRA publication (RC 191) includes some revisions to the information that CRA requires for applications for prescribed university status (eligibility criteria however has not changed). The main change is that CRA only asks for 5 years information on Canadian students at the foreign university and not 10 years as they had previously requested.  

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February 24, 2017

CRA has updated the T2050 form - Application to Register a Charity

The Canada Revenue Agency ('CRA') recently updated the T2050 form used by organizations when applying for charitable status with the Charities Directorate of the CRA. 

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January 29, 2017

What are the chances of your Canadian charity application succeeding?

In Canada, the Charities Directorate of CRA reviews carefully all registered charity applications.  Some of the latest statistics from the CRA show that most charities that apply for registration are not granted it.  It is not that these organizations are bad - but you have to meet all the criteria for a registered charity to be accepted by CRA. While 1670 were accepted in 2015-16 fiscal year, many more received unfavarouble decisions.  Unlike the US in which the 501c3 application process appears to have been stripped down to almost nothing - here in Canada there is still a vigorous process to protect the integrity of the registered charity system.

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April 17, 2016

Comparison of registered charity applications in Canada and US 501(c)3 applications

The Chronicle of Philanthropy had an article entitled "Fewer Groups Got Charity Status in 2015, but Numbers Still High".  It notes a slight reduction in 501(c)3 tax-exempt applications in 2015 of only 86,915.  This was in part because of a controversial move by the IRS to introduce a simple 1023-EZ form for groups with annual revenue of under $50,000.  The 1023-EZ is a 3 page long electronic form and since its introduction there has been an almost doubling of applications.  By the way the number of new US charities last year is equal to the total number of Canadian registered charities! With over 1.2 million 501(c)3s the US has about 50% more registered 501(c)3s per capita than Canada.  

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June 26, 2014

Now Magazine “Men’s rights group used feminists’ names on charity application”

I never thought I would live to see the day.   Yes a popular magazine has a story that revolves around the T2050 - Application to Register a Charity Under the Income Tax Act.   Now Magazine has an article entitled "Men’s rights group used feminists’ names on charity application" in which it alleges that a registered charity may have put in a deceptive charity application to the Charities Directorate.  

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May 10, 2014

Is CRA making registered charity applications harder?

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?

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June 30, 2012

CRA updates information on procedures for charity application

The CRA has announced “The Application review process Web page has been updated to reflect the new procedures we follow when an applicant does not respond to our request for clarification or more information.” CRA is streamlining the application system so that if an applicant who has provided an application that is missing information etc. does not respond within 60 days of the CRA requesting the additional information then CRA will close the file.  CRA will not deny the application (which one could appeal from) but just close the file.  An applicant can always put in another application the next day if they wish.

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August 09, 2011

Charities Directorate service standards for telephone inquiries and charity applications

Here is a short note from the Charities Directorate on their service standards for telephone inquiries and charity applications.

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April 10, 2010

Improved turnaround time for Canadian charity applications at CRA with backlog removed

According to CRA “Thanks to changes in processes, more resources, and the dedication of staff and management in the Directorate’s Assessment, Determinations and Monitoring Division, it now takes significantly less time to process applications for registration as a Canadian charity.”  More complicated applications that I file that used to take 6-9 months to now being responded to in 6-9 weeks - it is an amazing improvement which is welcomed by all those involved with applications for charity status.  On a sad note after four years in the Charities Directorate, David Moore, the Director of the Determinations Division, and instrumental in reducing the backlog has moved to the Treasury Board Secretariat (TBS) from the Charities Directorate. David Moore was responsible for establishing the Client Interface and Service Division and led the work on the Small and Rural Charities Initiative which was and continues to be very successful in making CRA more responsive to the needs of small and rural charities. David will be missed. I understand that Linda Desrochers, will become the interim Director of the Determinations Section.

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August 01, 2009

CRA releases fillable T2050 Application to Register a Charity Under the Income Tax Act

The Charities Directorate of the Canada Revenue Agency just released a fillable T2050 Application for charitable status which will make it easier for organizations to complete the form and presumably make it more legible.  You can obtain a copy of the form at http://www.cra-arc.gc.ca/E/pbg/tf/t2050/README.html Although the form may look simple, and is now easier to fill in, it is actually a form covering many different areas of charitable law and it is often a good idea to get some legal advice and assistance with incorporation and applying for charitable status.

Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

mark@blumbergs.ca
416.361.1982
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