{"id":3055,"date":"2024-03-12T16:15:32","date_gmt":"2024-03-12T20:15:32","guid":{"rendered":"https:\/\/www.ontariobusinesscentral.ca\/blog\/?p=3055"},"modified":"2026-02-17T13:05:04","modified_gmt":"2026-02-17T18:05:04","slug":"what-is-the-difference-between-a-not-for-profit-and-a-charity","status":"publish","type":"post","link":"https:\/\/www.ontariobusinesscentral.ca\/blog\/what-is-the-difference-between-a-not-for-profit-and-a-charity\/","title":{"rendered":"What is the Difference Between a Not For Profit and a Charity?"},"content":{"rendered":"\n

Originally Published: Dec 18, 2019<\/em><\/p>\n\n\n\n

While it is commonly believed that charities and nonprofit organizations are synonymous, there are a few important differences between these types of organizations that should be noted before you begin the incorporation process.<\/span><\/p>\n\n\n\n

A Not For Profit organization has many also known as (AKA) names, including NFP, NPO, NGO, Not-For-Profit, NonProfit, and NonShare. These words are all common terminologies for the same type of legal entity, which is a corporation without share capital.<\/span><\/p>\n\n\n\n

The <\/span>Charities and Nonprofit incorporations<\/span><\/a> are both registered in the same process, with some key differences for registered charities, which are essential to be included to obtain charitable status. The first step in determining whether you are a notforprofit vs charitable organization is determining whether your purposes are considered charitable purposes or not.<\/span><\/p>\n\n\n\n

The charitable status is only available to those corporations where the object or purpose clauses of the corporation are deemed to be a charitable organization.  The <\/span>Canada Revenue Agency<\/span><\/a> ultimately reviews those organizations who apply for Charitable status in Canada and determines whether the corporation is considered a charitable organization. If this charitable status is approved, the corporation is able to <\/span>obtain a charitable tax number<\/span><\/a> to provide donation tax receipts to those who provide financial support to the organization.<\/span><\/p>\n\n\n\n

A non-charitable not for profit, in the simplest terms, provides to the community as a public benefit, and its focus is not on obtaining donations to support those endeavours. A non-charitable nonprofit organization cannot issue official receipts for income tax purposes, even when donations are received. With registered charities, much of the focus is to gain financial donations to be used exclusively for charitable purposes.<\/span><\/p>\n\n\n\n

Our team at <\/span>Ontario Business Central<\/span><\/a> assists individuals who wish to start a business as either a Not For Profit or Charitable Organization for both the Provincial incorporations in Ontario and the Federal Incorporations for Canada.  We hope you find this information a beneficial resource.<\/span><\/p>\n\n\n\n

We are able to assist you to complete either the <\/span>Ontario<\/span><\/a> or <\/span>Federal<\/span><\/a> Not For Profit or Charitable organization, and <\/span>our staff are available to answer any additional questions<\/span><\/a> you may have related to this topic.<\/span><\/p>\n\n\n

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What is a Not For Profit?<\/h3>\n\n\n\n

A Not For Profit corporation is incorporated to the benefit of a community and is a separate entity to those who are directors or members of the corporation, who cannot receive personal benefits from the organization. The directors or members who oversee the corporation do so for the benefit of the community and not for the personal benefit of themselves as individuals.\u00a0 These individuals do not own the corporation but work for and by the corporation. A Not For Profit organization cannot apply for charitable status with the Canada Revenue Agency.<\/p>\n\n\n\n

Taxation<\/strong>
<\/strong>The corporation will be required to file a T2 return within 6 months of the fiscal year end and is generally exempt from paying income tax unless the corporation owns property and has capital gains from that ownership.<\/p>\n\n\n\n

GST and HST<\/strong>
<\/strong>The Not For Profit corporation is required to pay GST and HST on purchases made on behalf of the corporation and may claim a partial rebate on GST or HST paid out.<\/p>\n\n\n\n

Types of Not For Profit objects are as follows<\/h3>\n\n\n\n