Canadian Law for Charitable Donations

Hi Friends,
I am publishing details I received from Revenue Canada regarding Charitable Donations in Canada. I offer this for anyone to read who has curiosity about the boundaries of what Charitable Organizations can and cannot do. If you have questions regarding the operations of a particular Charity, you can read through this information and, if you feel the need, you can contact Revenue Canada with further more detailed questions.

I question organizations making personal gains through charitable donations and what the fine lines are. One can say their home is part of the charitable facility they are operating but that does not mean it is. So, enjoy this reading. I received this from Revenue Canada.


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To qualify for registration as a charity, an organization must have purposes that are exclusively charitable and charitable activities that support those purposes. The purposes (also called objects) describe the aim or main intent of the organization. The activities describe how the organization will accomplish its purposes.
The term charitable is not defined in the Income Tax Act, so we consider common law (court decisions) to determine what is charitable at law.
The courts have identified four categories of charity:
1. the relief of poverty;
2. the advancement of education;
3. the advancement of religion; and
4. certain other purposes that benefit the community in a way the courts have said is charitable.

An organization’s purposes must fall within one or more of these categories to be considered for registration as a charity.
To be registered as a charity, an organization’s purposes and activities must also meet a public benefit test. To qualify under this test, an organization must show that:
1. its purposes and activities provide a measurable benefit to the public; and
2. the people who are eligible for benefits are either the public as a whole, or a significant section of it. The beneficiaries cannot be a restricted group or one where members share a private connection; this includes social clubs or professional associations.
An organization that wishes to limit its beneficiaries unreasonably, or offer an unreasonable benefit to a group or individual will not qualify for registration.
The following factors will prevent an organization from being registered as a charity:
Non-resident organizations
Organizations established and resident outside Canada will not qualify for registration.
Purposes that are not charitable at law
Organizations established for the purpose of making a profit will not qualify for registration. To qualify for registration, an organization must be non-profit and have purposes (also called objects) that are charitable at law.
Gifting to organizations that are not qualified donees
Organizations that gift funds or resources to organizations that are not qualified donees will not qualify for registration. A registered charity can only use its funds and resources in two ways:
1. It can carry on its own charitable activities (activities conducted under the charity’s direction and control).
2. It can make gifts to other organizations that are qualified donees (usually other registered charities).
Individuals and most organizations outside Canada are not qualified donees..
Personal benefits
Organizations that provide personal benefits (directly or indirectly) by making any part of their income payable to or available to any of their members, shareholders, directors, or trustees will not qualify for registration. This does not include providing benefits to such persons who qualify as legitimate recipients of a charitable program.
Private benevolence
Organizations established to benefit a particular individual or a private group, are considered to be established for private benevolence and will not qualify for registration. To qualify for registration, an organization must show that its purposes and activities provide a tangible benefit to the public as a whole or a significant section of it.
Examples of private benevolence
1. an organization establishes a fund to help a specific family that has lost its house in a fire
2. an organization establishes a fund to cover the travel and hospital expenses for a particular child’s surgery
For more information, see CPS-024, Guidelines for Registering a Charity: Meeting the Public Benefit Test.
Political purposes
Organizations with political purposes will not qualify for registration.
Business activities
Organizations established to primarily operate a commercial activity (revenue-generating) with the intent to earn a profit will not qualify for registration.
For more information and examples, see Policy Statement CPS-019, What is a Related Business?
Activities that are illegal or contrary to Canadian public policy
Organizations that undertake illegal activities (e.g., fraud, or money laundering) will not qualify for registration.
Organizations with activities contrary to Canadian public policy will not qualify for registration. A public policy is a definite and officially declared and implemented policy (i.e., found in an act of Parliament, or a regulation).
Organizations that make their resources available either directly or indirectly to further terrorism will not qualify for registration. This is according to the Charities Registration (Security Information) Act that was enacted as part of the Anti-terrorism Act in 2001
Please also note that the financial information of all registered charities is available on the Charities Directorate’s website at http://www.cra-arc.gc.ca/charities/ .