To gain charity status, organizations must first register with the federal Canadian Revenue Agency under the Income Tax Act.
[5] To be eligible for charitable tax status, charities need to provide a public benefit, such as poverty relief or education,[6] and they are limited in their business and political activities, including making profit or engaging in partisan behavior.
[10] Charitable status grants organizations exemption from income tax and provides the power to issue donation receipts, eligibility to receive gifts from fellow registered charities, and exempts goods and services provided by the charity from sales tax.
[11] Certain donees have the ability to issue their own donation receipts like the Registered Canadian Amateur athletic association (RCAAA), foreign charities accepting gifts from the Head of the Commonwealth, universities outside of Canada and the United Nations.
[12] Registered charities have obligations linked to the status: they must devote and maintain control and direction of all of their resources while keeping them aligned with their purpose, they must file their T3010 Registered Charity Information Return annually, keep reliable records and books of activities, and they must maintain their status as a Canadian legal entity.
Public awareness and education are considered acceptable by the Canada Revenue Agency, as long as the information is sound and the content is not overly emotive.
[16] The Charities Directorate is responsible for federal regulations on registered charities in Canada under the Income Tax Act, particularly compliance with information reporting requirements to maintain transparency and public accountability (Prime Minister mandate letter to relevant minister:.
[25] The T1236 form, Qualified Donees Worksheet, provides detailed information about the money given from one registered charity to another.
[39] Recent controversy over the ability of U.S. donors to give to Canadian organizations could influence important cross-border issues, in particular those relating to oil pipelines.
Some experts call into question whether supporting a person against criminal charges falls in line with one of the four goals of Canadian charities.