Three types of charities can obtain registered status under the Income Tax Act. A charity whose primary focus is to carry on activities in pursuit of a particular charitable purpose is described as a charitable organization. These charities carry out their own activities and programs directly. A charity whose primary function is to fund the activities of other charities is described as a charitable foundation. Foundations can be public or private. A public foundation solicits funds from the general public. A private foundation generally receives funds from one person, a corporation, or a group of related persons or corporations.
Many public and private foundations distribute grants to qualifying charities. Grants are sums of money given to charitable or non profit organizations that do not have to be repaid. Certain corporations, governments, small businesses, financial institutions, and individuals also operate grant programs.