In general, eligible organizations fall into one of two categories.
In order to be considered a charitable organization for the purposes of lottery licensing, an organization must have objects or purposes and activities that are exclusively and wholly charitable. A charitable organization cannot have a mixture of charitable and non-charitable purposes or activities.
Charitable organizations have a number of characteristics:
The Office of the Public Guardian and Trustee has supervisory responsibility for charitable organizations and their use of charitable funds. Charitable organizations must comply with the reporting requirements of the Charities Accounting Act and the ownership restrictions set out in the Charitable Gifts Act.
Charitable organizations may register with the Canada Revenue Agency. However, registration as a charitable organization for the purposes of the Income Tax Act does not automatically qualify an organization for lottery licensing.
Organizations that have a mixture of charitable and non-charitable objects or purposes may be considered to be “non-profit with charitable objects.” A non-profit organization with charitable objects is eligible to receive lottery licences if its charitable mandate falls within one of the four charitable classifications and it meets all the other relevant criteria.
Non-profit organizations have a number of characteristics in common with charitable organizations. However, non-profit organizations do not have the same level of restriction placed on their business activities and the public benefit that they provide.
If an organization’s application does not include documentation proving its status as a charitable organization, it should be considered against the eligibility criteria to determine whether it is a non-profit organization with charitable objects.
If a licensing official receives an application from an organization that appears to be a sub-group, “partner” or auxiliary of another eligible organization, the official must ask the following questions in order to determine the status of the two organizations:
If the comparison shows that the two organizations exist for the same purposes, the parent group may be licensed if it is an eligible organization. The sub-group, “partner” or auxiliary may only be licensed where the parent group chooses not to conduct lottery events and permits the sub-group, “partner” or auxiliary group to hold lottery licences on its behalf.
If two or more eligible organizations amalgamate, the resulting entity must be treated as one organization for lottery licensing purposes. For example, if two community service organizations that each have a break open ticket licence amalgamate, the new organization may have only one licence. When two or more eligible organizations amalgamate, licensing officials must complete a full eligibility review.
Eligible organizations that amalgamate must disburse the funds in their designated lottery trust accounts for the purposes approved by the licence. The funds may be disbursed after amalgamation. If the funds are not disbursed before amalgamation, the licensing authority must approve the disbursement of funds.
When an eligible organization amalgamates with an ineligible organization, the new organization may or may not be eligible for lottery licensing. Licensing officials must complete a full eligibility review before issuing any new lottery licences.
An eligible organization that amalgamates with an ineligible organization must disburse the funds in its designated lottery trust account before amalgamation, for the purposes approved on the licence. The licensee must notify the licensing authority of the disbursement.
Prior to the disbursement of funds the lottery licensing authority must approve any request to hold lottery proceeds in a designated lottery trust account past the date of amalgamation and must also give prior approval of any final disbursement that occurs after amalgamation.