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| Path: Main Street : QuickGuides : Starting a Nonprofit or Charity |
Starting a Nonprofit or Charity
Welcome to our general subject guide to starting a charity or nonprofit organization in Canada. Here you will learn about some of the basic things to consider before you decide to start a nonprofit, as well as resources and tools to help you through the early stages of the process.
If you know of a resource that you think we should add to our collection, please send an e-mail to help@charityvillage.com with the details.
Initial Questions | Planning | Incorporation | Charitable Status | Helpful Organizations | Articles | Online Discussions | Book Reviews | Additional Resources
Initial Questions
The nonprofit sector is one of the fastest growing sectors in North America right now, and with almost 150,000 registered charities and nonprofits currently operating in Canada, it shows no signs of slowing down. Of course, as more and more organizations are added to the mix, groups must become increasingly creative in the planning and carrying out of their mission. Keeping this in mind, there are several questions that should be considered before you begin the process of starting your own nonprofit organization or charity.
Also check out our audiocast about the legal aspects of starting a nonprofit organization.
- Do you have a clear understanding of the problem or need you want to address? Is that need ongoing or short-term?
- Are there other similar organizations currently operating that already address this need? If so, will you be competing with these groups for funds, resources, or clients?
- Do other individuals agree that such an organization is needed? Are they willing to volunteer their time and energy to help get things started?
- Will you be able to locate the resources and finances necessary to achieve your mission?
- Do you understand the rules, regulations, and requirements of running a nonprofit organization or charity in your region?
Planning
Once you've decided to go ahead with your organization, there are a few initial steps that should be taken.
- Assemble a group of like-mined individuals who believe in the cause and are willing to dedicate themselves to its initial undertaking. These founding members will likely form the organization's first board of directors. Under provincial legislation by which nonprofit societies are registered, a board of directors is a legal requirement. It is also required by the federal government if you plan to apply for charitable status.
- Discuss and clarify the issues or needs that the organization will address and what your next steps will be.
- Agree upon and write a mission statement to describe what your group aims to achieve.
- Choose a name for the organization and figure out important logistics, such as where the organization will be housed, how it will be financed, what role each person will play, and what their responsibilities will be.
- Decide whether to incorporate your organization, become a registered charity, or both.
Incorporation
You can incorporate your organization either provincially or federally and the process is much the same as it is for incorporating a company. It is relatively straight forward, and can be handled by a competent solicitor with some experience in this area. Without incorporating or registering, your organization will not be legally recognized as a nonprofit, nor will your group's name be protected against use by other legal entities. Below are links to government web pages that deal specifically with nonprofit incorporation.
- Canada
- Income Tax Guide to the Non-Profit Organization (NPO) Information Return
- T1044 Non-Profit Organization (NPO) Information Return
- Alberta
- British Columbia (PDF format)
- Manitoba
- New Brunswick (PDF format)
- Newfoundland and Labrador
- Northwest Territories
- Nova Scotia
- Nunavut
- Ontario
- Prince Edward Island
- Quebec
- Saskatchewan
- Yukon
Charitable Status
The Canada Revenue Agency (CCRA) -- formerly Revenue Canada -- is the government department responsible for granting organizations charitable tax status. The process routinely takes 6 months to 18 months and requires applicants to fulfill a number of requirements. One of the major advantages of obtaining charitable status, is that the organization is able to issue receipts to donors for income tax purposes. This can be a major advantage when soliciting for donations. In addition, charities receive certain tax exemptions.
Not to be overlooked however, is the fact that registered charities are subject to a number of regulations and restrictions. One such restriction is the limitation on a charity's ability to advocate for a specific cause. Currently, groups with charitable tax status can only use 10% of their budget for advocacy. As well, charities are required to file an income tax return at least every two years and these files are available to the public, along with other official documents pertaining to the organization. Below are relevant links to the CCRA web site:
Also check out our audiocast about applying for charitable status.
- Canada Revenue Agency (formerly Canada Customs and Revenue Canada)
- Information For Charities
- Application to register a charity under the Income Tax Act
- Charities Division Contact Information
- Policy
- Forms
- Newsletters
- List of Canadian Registered Charities
Canada Revenue Agency now makes the following information publicly available about registered charities:
- a charity's governing documents (i.e., the letters patent, articles of incorporation, trust deed, constitution);
- the application form (completed by a charity when it sought registration or re-registration);
- the notification of registration or re-registration (a letter sent by the Department to notify a charity of its registered status);
- the letter the Department sends to a charity that has been de-registered, explaining the reasons for
- the Department's action; and
- the names of the persons who are or have been directors/trustees of the charity, and the periods during which they served as directors/trustees.
To request public information on charities, call 1-800-267-2384 for toll free long distance calls.
Helpful Organizations
- VolunteerBC
Offers a comprehensive resource tool designed to help groups through the various stages of organizational planning.- Volunteer Lawyers Service
The Volunteer Lawyers Service provides free legal assistance to nonprofit and charitable organizations in Ontario, including a broad range of business law services: employment law; duties and liabilities of directors; real estate and leases; trademark registration; privacy; contracts; etc.- Other Nonprofit Neighbourhood listings
Articles
From the Research Section of the Library at Charity Village:
- Board of Directors and Its Role
- Financial and Investment Management
- Legal Issues
- Legislation and Regulation
- Organization Management
- Strategic Planning
- Other Research Articles
Online Discussions
- BOARDS (from CharityChannel, focusing on all aspects of nonprofit/NGO governance, board issues such as board creation and function, board member responsibility in fund raising, board member liability and other legal issues involving board members, policies, etc.)
Two methods to subscribe:
1. Send e-mail to listserv@CharityChannel.com with SUBSCRIBE BOARDS YourFirstname YourLastname as the message. Leave the subject line blank.
2. Visit the CharityChannel web site at CharityChannel.com/forums, click on the link for forums, and click on the subscription information for BOARDS.
- CanadaTalk (discuss any topic in the Canadian nonprofit sector, with an emphasis on philanthropy.)
Two methods to subscribe:
1. Send e-mail to listserv@CharityChannel.com with SUBSCRIBE CanadaTalk YourFirstname YourLastname as the message. Leave the subject line blank.
2. Visit the CharityChannel web site at CharityChannel.com/forums, click on the link for forums, and click on the subscription information for CanadaTalk.
- CharityLaw-Canada (focuses on all aspects of the Canadian law of tax-exempt organizations.)
Two methods to subscribe:
1. Send e-mail to listserv@CharityChannel.com with SUBSCRIBE CharityLaw-Canada YourFirstname YourLastname as the message. Leave the subject line blank.
2. Visit the CharityChannel web site at CharityChannel.com/forums, click on the link for forums, and click on the subscription information for CharityLaw-Canada.
- CharityStart (discussion of the nuts and bolts of launching nonprofit organizations in the US or Canada.)
Two methods to subscribe:
1. Send e-mail to listserv@CharityChannel.com with SUBSCRIBE CharityStart YourFirstname YourLastname as the message. Leave the subject line blank.
2. Visit the CharityChannel web site at CharityChannel.com/forums, click on the link for forums, and click on the subscription information for CharityStart.
- Other Online Discussions listed at Charity Village
Book Reviews
- Charities Handbook
- 5 Life Stages of Nonprofit Organizations
- Law of Charitable and Non-profit Organizations (The)
- Wilder Nonprofit Field Guide to Crafting Effective Mission & Vision Statements
- Other Book Reviews at Charity Village
Additional Resources
Charitable Gaming Authorities - Provincial
Links to web sites and contact information for charitable gaming authorities across Canada.- Other Online Resources at Charity Village
Disclaimer: CharityVillage Ltd. has taken precautions to ensure that this information is, to the best of our knowledge, accurate. However, CharityVillage Ltd. accepts no liability for any loss or damage, consequential or otherwise, incurred in the reliance on the information provided. CharityVillage Ltd. accepts no responsibility for the accuracy or completeness of the information, and expressly excludes any warranties in relation to its fitness for purpose. Readers are advised to retain competent legal counsel.
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