CRA releases new online questionnaire - Is charitable registration right for you?

July 28, 2016 | By: .(JavaScript must be enabled to view this email address) Mark Blumberg
Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law

The Canada Revenue Agency ('CRA') has recently released a new online questionnaire which is designed to provide the general public with basic knowledge to help make an informed decision when deciding whether or not to apply for charitable registration.  

There are many strategic factors to consider (in addition to those in the questionnaire) before applying for charitable status and which may affect your chances of becoming a registered charity. The questionnaire is designed to ask the participant basic questions relating to establishing a registered charity and provides detailed answers to each question for the participant to consider. 

The online questionnaire can be accessed here: http://www.cra-arc.gc.ca/chrts-gvng/chrts/pplyng/rgstrtn/rgstrtnqz-eng.html?rss

The questionnaire may be of assistance to some but it may create some confusion for others.  For some organizations whether they should apply for charitable status can be a complicated issue and far too often groups are applying for charitable status that will later regret the decision because of the limitations that registered charitable status has.  

Here is the brief questionnaire and my comments are in italics

1. Will your organization be resident in Canada?
Yes
No
Unsure

[A Canadian registered charity has to be resident in Canada.  If for example it is established as a Federal non-profit corporation under the CNCA it will be deemed to be resident in Canada.   That is not complicated but some people will not understand that that is the real question.  So if for example you have a non-profit incorporated in Delaware such corporation will not meet this criteria.  Although that question seems obvious many people will confuse it with 'will the organizations directors be resident in Canada'.  There is no requirement under the CNCA or ITA that any of the directors be resident in Canada with a Canadian resident non-profit - however, there may be logistical constraints if there are no Canadian residents on the board of the non-profit. Some people may think that if they have a non-resident director they will not be able to register and this is not correct]


2. Will your organization have charitable purposes under one or more of these categories?

the relief of poverty
the advancement of education
the advancement of religion
other purposes that benefit the community in a way the courts have identified as charitable

Yes
No
Unsure

[Does not mention that all your purposes are required to be charitable.  So yes you may have charitable purposes under one or more of these categories but that does not mean that your purposes are exclusively charitable and that you will qualify as a registered charity.]


3. Does your organization plan to recruit volunteers or hire employees?
Yes
No
Unsure

[Not sure what the relevance of the question is in terms of whether you should apply.  Many Canadian charities do not have any employees.  While this information may be caught in the charity application it is not determinative one way or another.  A charity can operate, for example a public foundation by granting funds to other charities and not necessarily having any employees or volunteers except for the board members.]

4. Will you have the time and commitment to meet the ongoing obligations your organization will have if it is registered as a charity, such as filing an annual return?
Yes
No
Unsure

[Interesting question.  Perhaps a better question would be "are you aware of the obligations of being a registered charity".  Many applicants are not aware of the obligations and consequently would not know whether they will have the time and commitment to meet the ongoing obligations.]


5. Are you aware of the consequences of not meeting the obligations of registration, such as penalties, suspension, or loss of registration?
Yes
No

[I guess CRA is saying that you should be aware of the obligations and consequences of not meeting them.   Perhaps the reference to "penalties, suspension, or loss of registration" will encourage some people to be more careful before applying for charitable status.]

6. Are you aware of the consequences if your organization is revoked or you decide to end your organization’s operations?
Yes
No

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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