Registered Charity Compared to a Non-Profit Organization

If you are wondering what the differences are or if your non-profit organization should apply for charitable status, please review the chart below for all the differences:

Topic Registered Charity Non-Profit Organization
Purposes
  • must be established and operate exclusively for charitable purposes
  • can operate for social welfare, civic improvement, pleasure, sport, recreation, or any other purpose except profit
  • cannot operate exclusively for charitable purposes
Registration
  • must apply to the Canada Revenue Agency (CRA) and be approved for registration as a charity
  • no registration process for income tax purposes
Charitable registration number
  • is issued a charitable registration number upon approval by the CRA
  • is not issued a charitable registration number
Tax receipts
  • can issue official donation receipts for income tax purposes
  • cannot issue official donation receipts for income tax purposes
Spending requirement (disbursement quota)
  • must spend a minimum amount on its own charitable activities or as gifts to qualified donees
  • not applicable
Returns
  • must file an annual information return (Form T3010) within six months of its fiscal period-end
  • may have to file a T2 return (if incorporated), and/or an information return (Form T1044) within six months of its fiscal period-end
Tax exempt status
  • is exempt from paying income tax
  • is generally exempt from paying income tax
  • may be taxable on property income or on capital gains
GST
  • most supplies are exempt
  • most calculate net tax using net tax calculation for charities
  • is eligible to claim partial rebate of tax paid on supplies
  • few supplies are exempt
  • must calculate net tax in regular manner
  • is only eligible to claim a partial rebate of tax paid on supplies if it receives significant government funding