Charity and Non-Profit

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Registered Charity and Non-profit

CMHA/Fort Frances is a registered charity. Charities engage in activities which benefit the community as a whole; however, not all “good works” are considered “charitable” in a legal sense.
Organizations must adhere to certain legal requirements listed under the Income Tax Act in order to be considered a registered charity; if they do not, organizations risk being de-registered, which means they are no longer eligible for certain tax benefits.

Legally, a charity must devote substantially all its resources to charitable activities which carried on by itself. In addition, more than 50% of its directors, trustees, officers or similar officials must deal with each other at arm’s length, which means that they must act independently of each other. As well, no more than 50% of its funds can come from one person or organization, unless that one person/organization is the federal, provincial or municipal government, another registered charity or another non-profit organization.

Non-Profit
In addition to being a registered charity, CMHA/Fort Frances is an incorporated non-profit organization. It’s incorporated so it can exist as a separate legal entity, with its own property and bank account. Incorporation ensures the organization’s continued existence and personal protection in issues of legal liability.

Non-profit organizations do not exist for commercial purposes. Its members must not benefit personally as investors. Where commercial enterprises are in the business of making money by selling good or services, non-profit organizations do not profit from the goods or services they provide. Under the Income Tax Act, no part of a non-profit organization’s income is payable to or otherwise available for the personal benefit of any proprietor, member or shareholder. All levels of government can pass laws and bylaws regarding non-profit activity. Under the Income Tax Act, the federal government regulates tax exemptions and under the Excise Act, it regulates goods and services tax exemptions. At the provincial level there are special rules for non-profits for taxation and at the municipal level, non-profit organizations’ activities are licensed.

By law, incorporated non-profit organizations must have a Board of Directors. The Board of Directors is in charge of and directly accountable for the overall directions and policies of the organization. The Articles of Incorporation outline what power the Board of Directors has while the organization’s Bylaws specify how the Board is to act.

By-laws
By-laws are legally required when an organization is incorporated. They outline the following: