Charitable Organization
- It is established and operated exclusively for charitable purposes.
- It devotes all of its resources to charitable activities that it carries on itself.
- As a rule, it does not pay any portion of its income to its proprietors, members, shareholders, trustees or settlors, or otherwise make its income available to any of those persons for their benefit.
- Less than 50% of its directors, officers, trustees or like officials deal at arm's length
- with each other;
- with each of the other directors, officers, trustees or like officials of the organization;
- with a person that contributed amounts representing more than 50% of the organization's capital, or with each of the members of a non-arm's length group of persons that contributed such amounts.
- If more than 50% of the capital was contributed by one person, the organization is not controlled, in any way whatsoever, by that person or by members of a non-arm's length group of persons one of whom does not deal at arm's length with that person.
Note
- The expression for charitable purposes includes payments to a qualified donee.
- A charitable organization is not considered to be established and operated exclusively for charitable purposes if it devotes part of its resources to direct or indirect support of, or opposition to, any political party or candidate for public office.
- A charitable organization is deemed to devote its resources to its charitable activities if:
- it carries on a related business;
- it makes gifts to qualified donees that do not exceed 50% of the value of its income for the year; or
- it makes gifts to an associated charity.
- In this definition, the terms “person” and “group of persons” do not include the Government of Canada or a provincial government, a municipality, a charity registered as a charitable organization or a public foundation, or a club or association that is exempt from income tax.