This article was previously published by Law For Non-Profits and is reprinted with permission. This article is the second in a three-part series – check out the first article.
Okay, so next how do you qualify for charitable status?
Charitable purposes’ must fall within one of four different categories (also known as the four heads of charity.):
- The relief of poverty – providing care, housing, necessities of life or other assistance to the economically disadvantaged.
- The advancement of education such as schools, tutoring and legal education programs.
- The advancement of religion such as a faith connected to established religious doctrine or tenets.
- Other purposes beneficial to the community such as public policy, environment, and the public’s appreciation of the arts.
A nonprofit applying for charitable status must draft a ‘charitable purpose’ statement that fits within one of the above categories.
A charitable purpose statement is not the same as your organization’s mission statement.
A nonprofit’s mission statement is distinctly different from a charitable purpose statement. Mission, vision and values statements are the outward facing intentions of the society. In PLEO’s case it is: “(PLEO) seeks to ensure that arts, culture, and social service nonprofits and low-income artists are informed about and empowered to exercise their legal rights and responsibilities under the provincial and federal acts and regulations which govern their activities.” The charitable purpose statement is: “[t]o advance the legal education of artists, organizations, and members of the public in the Province of BC by providing workshops, seminars and public information on legal issues and the law.”
Advancing education is the category under which most of PLEO’s activities fall. The “public” that we serve includes nonprofits and low-income artists. PLEO does this by offering workshops, seminars and information on legal issues and the law. There are many examples that can be found on the CRA website. Read more about charitable purposes here.
To draft a charitable purpose, understand the distinction between ‘purpose’ and ‘activities’.
Charitable activities are how a charity fulfills its charitable purpose. A nonprofit with a stated charitable purpose “to alleviate poverty” may aim to do so through such activities as “providing haircuts to the unhoused” or providing access to things or services that directly improve the conditions under which the unhoused are living such as showers, food, etc. An arts organization’s purpose might be “to advance education in the theatre arts” and they might do this “by providing structured workshops on playwriting and stagecraft.”
Feel free to contact the Charities Directorate with questions.
It can be easy to forget that the CRA is staffed by human beings and that those human beings can answer questions. While they can’t provide legal advice, they can be excellent sources of information about the application for charitable status. If you have spent time on the Charities Directorate website and are looking for clarification or additional information, don’t be afraid to call and talk to the CRA.
If you’d like to learn more about keeping your nonprofit legally compliant, explore the many free resources available on our website. Our Legal Help Guides walk you through a series of plain language questions and provide you with a checklist, sample documents and helpful links for any areas your nonprofit may need to address.
Law For Non-Profits is a free low-barrier digital platform from the Pacific Legal Education & Outreach Society designed to help non-profit leaders understand their legal obligations. They offer step-by-step legal help guides, sample documents, articles, and helpful links to keep your non-profit legally compliant. The resources were created for non-profits working in BC, however, many of the concepts are general in nature and may apply in other provinces Canada that have similar laws. Learn more at lawfornonprofits.ca.