In Canada, not all advocacy groups are the same. Some are registered charities while others are non-profit organizations. And the difference between the two basically comes down to paperwork. Registered charities require more paperwork but with that comes more opportunities for growth.
A registered charity means that the organization has been approved by the Canada Revenue Agency (CRA) as a charity. With that approval, a registered charity can issue receipts for donations. That means that more people will likely donate to the organization because:
- the organization has been deemed legitimate by the Canadian government, and
- the people will get a tax receipt they can use for their own tax returns.
A registered charity may also have more opportunities for funding as many companies or organizations restrict their grants to registered charities.
But with those advantages, there are some caveats. Registered charities are limited in how they use their funds. The funds can be used to achieve the organizations own goals/activities and to other charities or institutions registered with the CRA. A registered charity can fund research outside of Canada but that research has to be with an institution that is CRA approved.
Probably the biggest obstacle to forming a registered charity is time. It takes about a year for the CRA to review an application.
In contrast, a non-profit organization has much fewer restrictions and paperwork. While that freedom is very appealing to many organizations, it can limit the funding opportunities available to them—most notably because they cannot provide a tax receipt for donations and there may be fewer opportunities with other agencies or companies to access funds.
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