Starting a charity can be an excellent way to make a difference in your community and the world. However, before incorporating a charity, it is essential to have a clear and solid charitable purpose. A charitable purpose is the reason behind the existence of your charity, and it should be aligned with your mission and vision.
In Canada, charities are regulated by the Canada Revenue Agency (CRA). To qualify for charitable status, an organization must demonstrate that it has a charitable purpose that falls within one of the four categories defined by the CRA: relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community.
Having a clear and solid charitable purpose is important for a number of reasons:
- Eligibility for Charitable Status
As mentioned, to be registered as a charity, an organization must have a charitable purpose that falls within one of the four categories defined by the CRA. Having a well-defined charitable purpose will help you meet this requirement and increase your chances of being approved by the CRA.
- Transparency and Accountability
Having a clear and solid charitable purpose helps to ensure transparency and accountability. Donors want to know where their money is going, and a well-defined charitable purpose can help reassure them that their donations are being used for the intended purpose. A clearly stated purpose can also help the charity’s board of directors make decisions in a transparent manner.
- Focus and Direction
A solid charitable purpose helps to provide focus and direction for the organization. It helps to ensure that the organization is working towards a specific goal, and it can help to guide decision-making.
- Branding and Marketing
A well-defined charitable purpose can help with branding and marketing efforts. A clear and concise purpose statement can be used in promotional materials and can help to communicate the charity’s message to potential donors and supporters.
It is important to note that having a solid charitable purpose can also have some limitations. For example, it can limit the scope of the activities that the charity can undertake. It is important to strike a balance between having a well-defined charitable purpose and having flexibility to pursue new opportunities that align with the organization’s mission.
In conclusion, having a clear and solid charitable purpose is critical to the success of a charity. It helps to ensure eligibility for charitable status, transparency and accountability, focus and direction, and branding and marketing. It is important to take the time to develop a well-defined charitable purpose that is aligned with your mission and vision.