Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, New corporate non-profit acts
The CRA discusses questions including 1.What is meant by broad and vague objects? 2.What is the problem with broad and vague objects? 3.Is there a way to keep our objects broad and still be eligible for registration as a charity? 4.What is the difference between purposes (or objects) and activities? 5.Why are purposes and activities important? 6.What is “sufficient” information?
Questions and answers about objects and activities. Note that the words purposes and objects are used interchangeably. Both refer to the goals, aims, or objectives of a charity.
1.What is meant by broad and vague objects?
2.What is the problem with broad and vague objects?
3.Is there a way to keep our objects broad and still be eligible for registration as a charity?
4.What is the difference between purposes (or objects) and activities?
5.Why are purposes and activities important?
6.What is “sufficient” information?
1. What is meant by broad and vague objects?
Broad and vague objects may be unclear in their scope or in their intent.
Broad objects are often expansive and do not always express a direct or tangible charitable benefit. They can permit both charitable and non-charitable activities. Examples of broad objects are: “To foster an appreciation of the English language”; “To end homelessness”; and “To fight poverty.”
Vague objects are ambiguous and can be interpreted in many different ways. They leave us guessing about the true intentions of the organization. Examples of vague objects are: “To help the deserving”; “To encourage participation in the community”; and “To foster support of the challenged.”
2. What is the problem with broad and vague objects?
We cannot register an organization that has been established with vague objects, or with a mix of broad and vague objects, because it is impossible for us to determine if the organization is established for charitable purposes.
Many organizations state their objects in a way that will allow them the greatest degree of flexibility. However, to be eligible for registration as a charity, an organization must be established with objects that are restricted to the realm of charity as recognized by law. The objects must be expressed in clear terms that limit the scope of the organization’s activities.
3. Is there a way to keep our objects broad and still be eligible for registration as a charity?
Yes. In some cases, an object may be broadly worded but still restrict the applicant to charitable pursuits, for example, “To relieve poverty through charitable means.” In these cases, we can accept the object if the applicant has, in its application, provided us with a complete and clear statement of its current and proposed activities, and those activities are exclusively charitable. For more information on and examples of broad objects, see Policy Statement CPS-004, Applicants with Broad Object Clauses.
We have developed model objects that are acceptable for organizations seeking to become registered as charities. If you choose objects from this list, the activities of the organization must bear a relationship to the selected objects and be a reasonable means of achieving them.
4. What is the difference between purposes (or objects) and activities?
The difference between purposes and activities is often unclear.
A purpose or object is something that one strives toward or the reason that something exists. Dictionaries define purpose or object as intention, intent, goal, end, aim, or objective. To be eligible for registration, an organization must be established for a charitable purpose or purposes. Charitable purposes are those that are recognized by the courts as charitable. Examples of charitable purposes are: “To relieve conditions related to poverty”; “To educate children”; and “To advance the Christian faith.” For more information on and examples of acceptable purposes or objects, see Model objects.
An activity is defined as an action or a collection of actions. In terms of a charity, it is what a charity actually does day-to-day and over time. To be eligible for registration, an organization must carry on charitable activities that fulfill its charitable purpose(s) or object(s). Examples of charitable activities are: “Operating a food bank”; “Establishing and maintaining a school”; and “Building a church.”
5. Why are purposes and activities important?
When we review an application for registration, we look at the organization’s purposes and activities; both are equally important. An applicant with charitable purposes but lacking a clear description of its charitable activities will be denied registration. Similarly, an applicant with clearly charitable activities but that is not established for exclusively charitable purposes will also be denied. Furthermore, an applicant’s activities must relate to its purposes. If they do not relate, the application will be denied.
Many applicants for registration simply repeat their objects when they describe their activities. An applicant that simply re-states its purposes when describing its activities will have its application returned to it as incomplete. To be eligible for registration, an applicant must provide a thorough and complete description of its current and future activities (including income and expenses), showing what it will do, or what it hopes to do, to fulfill its charitable purposes. For more information, see Describing your activities.
6. What is “sufficient” information?
When we ask for “sufficient” information, we want a complete description of your organization and its activities. This detailed information allows us to properly evaluate your application and determine if your organization is eligible for registration. If an organization fails to provide sufficient information about itself, its registration may be denied.
Some applicants do not include enough information about how their organization is structured. Other applicants do not include a complete description of their current and planned activities or simply re-state the organization’s purposes instead of completely describing its activities. You should describe, in detail, the charitable activities your organization will carry on itself and/or provide details of the resources (financial, physical, or material) that it intends to make available to qualified donees to assist those organizations.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.