If you’ve ever searched for a charity to support, you’ve probably noticed that the same few words keep coming up: registered charity, nonprofit, NGO. They often get used as though they mean the same thing, and when you’re deciding where your gift will go, it’s fair to want to know whether they do.
In Canada, a registered charity is an organization the Canada Revenue Agency (CRA) has approved to issue official donation receipts. A non-profit organization (NPO) is a group run for purposes other than profit, such as a club or an association, that isn’t registered with the CRA. NGO is a broader, everyday label for organizations that work independently of government, and it can describe either one.
Many organizations fit more than one of these words, because each one answers a different question. Registered charity describes how an organization is recognized by the CRA. Nonprofit describes what happens to its money. NGO and humanitarian describe the kind of work it does. We use all of them at Heart for Africa (Canada), and here’s what each one means, and why it matters when you decide where to give.
What Is a Registered Charity in Canada?
A registered charity is an organization the CRA has registered because it is established and operated only for charitable purposes. Those purposes fall into four categories: relief of poverty, advancement of education, advancement of religion, and other purposes that benefit the community. Registration comes with a registration number, and with responsibilities. A registered charity files a T3010 return with the CRA every year, must spend a minimum amount each year on its own charitable activities, and is exempt from income tax.
It also comes with something donors notice right away: a registered charity can issue official donation receipts for tax purposes. The Government of Canada keeps a public list of registered charities, so anyone can confirm that an organization is registered before they give.
What Is a Non-Profit Organization (NPO)?
The CRA describes a non-profit organization as an association, club, or society run for purposes other than profit, such as social welfare, civic improvement, pleasure, or recreation. Hobby clubs and amateur sports leagues are common examples. An NPO isn’t registered with the CRA, has no registration number, and can’t issue official donation receipts.
The CRA treats the two as separate categories, so an organization operating as a charity is a registered charity rather than an NPO. In everyday conversation, though, “nonprofit” is also used as a broad word for any organization that doesn’t distribute its earnings to owners or shareholders, and charities are part of that group too. That’s why you’ll see registered charities calling themselves nonprofits, and why the label alone doesn’t tell you whether a gift will come with a receipt.
What Is an NGO?
NGO stands for non-governmental organization. It’s a general label for organizations that work independently of government, and it’s often used for groups doing humanitarian and development work around the world. In Canada, charities and nonprofit organizations are both sometimes described as NGOs. The CRA’s own comparison sorts organizations into registered charities and NPOs, so NGO describes what an organization does and who it is independent from, and registration status tells you how it is recognized.
Registered Charity vs. Non-Profit Organization at a Glance
| Registered charity | Non-profit organization (NPO) | |
|---|---|---|
| Registered with the CRA | Yes, with a registration number | No |
| Official donation receipts | Can issue them | Cannot issue them |
| Purpose | Established and operated only for charitable purposes | Social welfare, civic improvement, pleasure, recreation, or other non-profit purposes |
| Income tax | Exempt from income tax | Generally exempt, but may owe tax on property income or capital gains |
| Annual return | T3010 Registered Charity Information Return | May have to file a T1044, T2, or T3 return |
| Spending requirement | Must spend a minimum amount each year on charitable activities | None |
Why the Difference Matters When You Give
The most practical difference for a donor is the receipt. A gift to a registered charity can come with an official donation receipt, and a gift to an NPO cannot. The label on a website doesn’t settle that question, so it’s worth taking two minutes to confirm registration using the CRA’s Find a charity tool. We walk through that step by step, along with five other questions worth asking, in our guide to finding a charity worth supporting.
The second difference is accountability. A registered charity reports to the CRA every year and has to show that it is spending on its charitable purposes, which is part of what gives donors confidence that a gift is doing the work it was meant to do.
Where Heart for Africa (Canada) Fits
Heart for Africa (Canada) a registered Canadian charity, and we also call ourselves a nonprofit and a humanitarian organization. Each of those words describes something true about us.
Registered charity is our status with the CRA, and it’s why gifts to Heart for Africa (Canada) come with an official donation receipt. Our business number is 859163560RR0001, and you can confirm that yourself in a couple of minutes using the CRA’s Find a charity tool.
Nonprofit describes how we work: no owners or shareholders, with what comes in going toward our mission.
Humanitarian describes the work itself, caring for more than 470 children at Project Canaan in Eswatini, Africa, where they live in family-style homes, attend school on site, and eat food grown on our own farm.
A gift to our general fund supports the whole project at once: the homes, the school, the farm, the local people are able to employ and more. Because those gifts go to a registered Canadian charity, they work the way donors expect, and you can confirm that for yourself before you give.
If you’d like to be part of this work, you can make a year end gift to our general fund by clicking below.