Non-profit, charities and charitable organizations

In Alberta, non-profit groups can choose to incorporate under a variety of provincial and federal government acts and become a non-profit corporation. Choosing the incorporation act depends on the activities and purpose of the organization and its intended clients. Alberta’s Societies Act is one of the most common incorporation acts that non-profits in Alberta choose for incorporation to become a society.

Despite the cost, statuary requirements, and administrative process and filings, incorporation has some advantages for non-profit organizations, including:

Acquiring legal identity

As a legal entity, a non-profit corporation can act as a 'person;' Therefore, it can buy, sell and own assets, including land; make contracts, sue, and be sued.

Limited liability for board members

As a separate legal entity, incorporated non-profits can provide some protection for their board members and limit their liability, as long as board members act within their authority, with the best interest of the organization in mind and actively oversee the activities of the organization.

Better access to grants

Many funding bodies, including governments, require non-profits to be incorporated to be able to award the grant in the name of the non-profit corporation rather than their board members.

Non-profit groups can also choose to become registered charities with the Canada Revenue Agency. Registered charities are organizations that are established and operate for charitable purposes and they cannot use their income to benefit their members. They must be established and must operate for charitable purposes and the benefit of the public.

To become a charity (a registered charity), non-profit groups need to register as a charity with Canada Revenue Agency (CRA) to be able to issue official tax receipts to their donors. Tax receipts can benefit donors, and therefore, they can be a significant factor when donors decide whether or not to support the fundraising activities of an organization.

Registered charities may also benefit from increased credibility in the community because they must follow certain rules and guidelines to maintain their registration. Organizations can apply for registered charity status only if their purposes can be described as one of the following:

• relief of poverty 
• advancement of education 
• advancement of religion 
• other purposes that do not fall under any of the other headings, but are beneficial to the community – these purposes are determined by courts

The primary advantages to being a registered charity are:
 

• the organization may issue official tax receipts for gifts it receives from individuals and corporations
• you are exempt from paying income tax
• you are eligible to receive gifts from other registered charities
• you gain increased credibility in the community
• many goods and services you provide are exempt from the GST and HST

How to register

• Learn how to become a registered charity with the CRA.

Non-profit groups may also be registered as charitable organizations in Alberta. This means that organizations are registered under the Alberta Charitable Fund-raising Act. This registration should not be confused with being a registered charity with the Canada Revenue Agency (CRA). It does provide a charitable registration number but does not allow organizations to write charitable donation tax receipts. Charitable status for tax purposes is only granted by the Canada Revenue Agency (CRA).

A charitable organization must be registered under the Charitable Fund-raising Act if:

• it uses a fundraising business 
• it intends to raise more than $25,000 in gross contributions in its financial year from solicitations (requests for contributions) to individuals in Alberta 
• during or after a campaign it finds it has raised more than $25,000 (if so, the charity must register within 45 days after the contributions reach $25,000)

Get more information on the Charitable Fund-raising Act and complete the application form to register a charitable organization.

Learn more about Charitable Fund-raising