All Canadian charities should have legal objects or purposes. The terms objects or purposes are used interchangeably. A charity should ensure that its objects allow for particular activities that the charity wants to undertake before embarking on such activities. The Letters Patent/Articles of Incorporation contain the objects of the corporation with a non-profit corporation but it is also found in the trust deed of a trust or the constitution of an unincorporated association. A charity wants to avoid operating outside the scope of its objects; otherwise, such actions would be outside the charity’s legal authority (ultra vires). The consequences of acting ultra vires can result in the actions undertaken or decisions made being null and void, the revocation of charitable status, and, potentially, personal liability for the directors of such a charity.
The type of objects that are defined as charitable fall into one of four categories accepted by CRA and by the courts, namely to relieve poverty, advance education, advance religion, or benefit the community as a whole in a way that the law considers charitable. In addition to fitting under one or more of the four categories, the charity must also be established for the benefit of the public or a sufficiently large segment of the public. CRA will examine issues such as whether the benefit is tangible, whether the beneficiaries are either the public-at-large or a sufficiently large segment of the public, and whether there are benefits to private individuals except under certain limited conditions.
If the objects of the corporation are too broad and could include non-charitable activities or could have significant private benefits, then the corporation may not be successful in obtaining registered charity status. On the other hand, if the objects are too narrow, the charity will have trouble conducting effectively its activities.
You might find the following resources helpful:
Objects of registered charities in Canada are sometimes not charitable
Now might be a good time to look at your charity’s legal objects and whether they should be changed
New CRA Guidance on “How to Draft Purposes for Charitable Registration” and new model objects