1. Social enterprises and non-profits should measure ‘impact’ the same way that for-profits do.
http://impactinvesting.marsdd.com/knowledge-hub/social-finance-guide/
Challenges to Implementing Social Finance Policy in Canada
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2. Nonprofits that have social enterprises should pay income tax on profits earned or transfer the activities to a for profit subsidiary in order to maintain tax exempt status.
https://www.cpacanada.ca/en/business-and-accounting-resources/strategy-risk-and-governance/not-for-profit-governance/publications/social-enterprise-questions-for-nfp-directors
http://socialenterprisefund.ca/wp-content/uploads/2010/01/Guide-to-Social-Enterprise-2010.pdf
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Here is an Example of the writing method:
A non-profit organization can obtain a tax-free or tax-exempt status by having a charitable status. A charitable status is only given by the CRA. There are two factors for a non-profit organization to gain a charitable status which are: 1) the non-profit organization’s purposes and activities fall within the legal concept of charity recognized by the courts and 2) the non-profit organization meets the other requirements of the Income Tax Act. A non-profit organization can fall into four charitable purposes which are: 1) the relief of poverty, 2) the advancement of education, 3) the advancement of religion and 4) certain other purposes that can benefit the community in a way which the court has deemed as charitable. So when an non-profit organization’s purposes falls into either one of the charitable purposes, clearly shows how they will meet its charitable purposes, meet the requirements of the Income Tax Act and clearly shows that the funded money is used for the cause they support, they are qualified to have a charitable status and are able to receive a tax-free status.
However, they are non-profit organizations that have a charitable status and a tax-free status but use the donations for their own purposes and not for the cause the non-profit organization supports. An example can be the Humane Society of Canada for the Protection of Animals and the Environment. The CEO of the Humane Society of Canada for the Protection of Animals and the Environment, Micheal O’ Sullivan has been caught of the CRA for using the donations given for his own purposes. This charity has lost its tax-free status because they broke the requirements in having a charitable status. As one can see, even if a non-profit organization has a charitable status, they can still break the laws and rules of having a charitable status.
In conclusion, I say that non-profit organizations that falls into either one of the charitable purposes, clearly shows how they will meet its charitable purposes, meet the requirements of the Income Tax Act, clearly show that the funded money is used for the cause they support and do not break the rules and requirements of having a charitable status should have a tax-free status while the other charities that break the rules and requirements and/or uses the donations as profit should be revoked of their tax-free status and their charitable status.
MLA STyle
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