Common Types of Canadian Foundations

Philanthropy in Canada has always been vital to the relationships among Canadians and to the relationships that Canada has within the global community. The care and generosity that exists in the Canadian culture of philanthropy manifests itself in three common forms of registered charities as outlined by the Canadian Revenue Agency and the Income Tax Act.

Private Foundations

This type of foundation is established as a corporation or a trust. It only has charitable purposes and carries out its own charitable activities and funding of qualified donees. A private foundation is at least 50% controlled by a person or group of persons that do not deal with each other at arm's length, and make up at least 50% of the directors, trustees or other similar officials of the charity.

Public Foundations

This kind of foundation is established as a corporation or trust that generally gives more than 50% of its annual income to qualified donees, which are usually other registered charities. It generally receives its funding from different arm's length donors and more than 50% of the officials deal with each other at arm's length.

Charitable Organization

These can be established as a corporation, a trust, or under a constitution. It primarily completes its own charitable activities, and has more than 50% of its officials working with each other at arm's length. It will typically be funded by different arm's length donors.

Regardless of which form a philanthropic endeavor, it is important to select the right structure for a Canadian foundation as it will make all the difference for the organization.