Establishing a Charitable Organization for Your Business


Setting up a charity makes good business sense. While many business owners and entrepreneurs often make charitable contributions throughout the year, setting up your own unique charity is an option that shouldn’t be overlooked. Not only can your charity make a difference for those in need, it can also heighten the profile of your business and contribute to additional growth. Looking to get started? Here are some key steps involved in establishing a charitable organization.

Clarify Your Charitable Objectives

As you establish a blueprint for your charitable organization, it’s important to keep your objectives top of mind. While there are undoubtedly benefits for you as a business owner, your charity must primarily exist for the benefit of the public.

People often want to start a charity because they have passion for a cause and a great idea on how to achieve these goals. Others may have significant funds to donate to a cause, but want to ensure the funds are used for a specific charitable activity.

Begin by writing a mission statement for your organization. Include the values guiding the operation and the community or environmental benefit you hope to achieve.

Determine your Charity’s Classification

Knowing which type of charity you plan to launch may help you to stay in line with your objectives.

Registered charities run programs that meet the charitable activities outlined by the Canada Revenue Agency (CRA); they are regulated and are able to issue tax receipts to donors.

Foundations typically exist to distribute funds to qualified recipients. Canadian foundations may issue grants to other charities, may be a funding arm for another charity, or carry their own activities.

Non-profits are a legal entity separate from members and directors. Not all non-profits register as a charity with the CRA. They can earn a profit, but profits are used to further their corporate goals (instead of being distributed to shareholders, members, or directors).

Register Your Charity Federally

In order to be eligible for the business benefits that charities receive, you need to register your organization with the government.

To register in Canada, you must apply via the CRA. They have a number of resources available about the set-up process. It may also be to your benefit to contact the CRA before applying to address any questions you may have.

Consider the Benefits to Your Brand

Businesses that own registered charities often evoke a positive image among the public. It encourages supporters and is usually one of the main drivers behind a brand forming the charity to begin with.

Many Canadians feel that registered charities are regulated and overseen to a greater degree than businesses. This leads to more confidence in the brand and can result in larger and more frequent donations.

Focus on Finances

It’s no secret that charities receive more favourable tax treatment. In Canada, registered charities don’t pay income tax on their earnings. Canadian charities may also be excused from charging HST for select services. They may also be able to claim tax rebates for HST paid. Be sure to familiarize yourself with the unique tax regulations applicable to charities in your region.

Making plans to launch your charitable organization can help to guide your efforts and activities. If you decide to set up a charity, seek advice from organizations working in your sector. Consider this journey no different than starting any other business venture.

All business advantages aside, running a charitable organization requires hard work, dedication, and a constant commitment to your cause. Allowing others to share in the journey from the outset is beneficial.


Michelle Novielli | Contributing Writer



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