According to Statistics Canada, taxpayers reported $8 billion Canadian dollars in charity donations in 2008. To start a nonprofit organization in Canada, you will need to register at the provincial and federal level. A successful start usually requires solid planning and strong fund-raising channels. You can choose to pursue charitable status from the Canadian Revenue Agency (CRA), but this is not required to operate.
List the needs of your community or region. Look for areas where you can help either monetarily, through volunteer support, through educational awareness or advocacy. Create a list of your core competencies and match them with your community needs. Narrow down the possible nonprofit areas to work on to two or three.
Track other organizations already working in these areas. Identify if they are succeeding or if they need help. Find out how much they spend on operations yearly, and analyze the amount of federal or provincial funding available for this type of nonprofit. Nonprofits are required to publicize their financial records. You can also contact your local government to estimate how much funds they have available through grants and loans. This will help you decide if there is enough financial support to maintain your new nonprofit.
Write a mission statement for you organization. Include the values guiding the operation and the community or environmental benefit your nonprofit will bring to Canada.
Incorporate or register your nonprofit. Incorporation of a nonprofit organization is no different from incorporating a company. You can incorporate either at the federal or provincial level. Registering a nonprofit is a less stringent process, but it creates limitations such as not being able to accept tax-deductible donations and using a maximum of 10 percent of the budget for advocacy projects.
Obtain charitable status from the Canadian Revenue Agency. You can only obtain this type of status if your nonprofit is incorporated. Charitable status allows you to issue receipts to donors for income-tax purposes.The process usually takes six to 18 months to obtain. Charity status also allows you to file for provincial and property tax exemptions, own your own property and create a bank account.
Get liability insurance, property insurance and worker's compensation insurance appropriate to the type of work your nonprofit will do.
- Hire a local Canadian lawyer during the incorporation and planning stages to help you plan ahead and start on the right foot.
- Business plan
- Liability insurance
- Property insurance
- Fund-raising channels
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