About 4000 groups apply each year to the Charities Directorate of CRA to receive registered charitable status and about 46% obtain that status.  The groups who don’t get charity status are not necessarily in any way bad groups – but there is an issue or issues that preclude CRA from registering them as registered charities. About 2 years ago we published an article Top 68 CRA Reasons for Denying your Canadian Registered Charity Application.

We recently saw a document released through access to information entitled “Purposes Not Being Furthered” which discusses charity applications with multiple purposes in which there is not a detailed statement of activity for one or more of those purposes.  Essentially CRA could reject the application, ask that the purposes be removed before charity status will be granted or CRA in certain low-risk scenarios could accept the registration.  We have also run across files where CRA has registered the group but the group has given an undertaking that it will not operate under certain objects until it has provided CRA with a detailed statement of activities and CRA has provided written permission.

The document provides a risk assessment matrix that CRA will use.  It also discusses the types of information provided for a detailed statement of activities.   There is also an interesting discussion and probably the most cogent explanation I have seen as to why the CRA is asking about “activities” rather than only “purposes” which may be the case in some other jurisdictions.

Here is the document:

Purposes Not Being Furthered on a charity application

A few thoughts on charity applications.  Just like being a publicly listed company is not right for all businesses so being a registered charity is not right for all non-profits.   If the application is important then it makes sense to retain lawyers who are very familiar with charity applications.  It is especially the case when it is an entity that has been in existence for a number of years or it is a group that will be conducting its own charitable activities (as opposed to only making grants to registered charities).

We have a number of lawyers at Blumbergs who are regularly working on charity applications and if you require assistance in incorporating, changing or applying for charitable status then please contact us.