Charitable organization

A charitable organization^[1] or charity is an organization whose primary objectives are philanthropy and social well-being (e.g. educational, religious or other activities serving the public interest or common good).

The legal definition of a charitable organization (and of charity) varies between countries and in some instances regions of the country. The regulation, the tax treatment, and the way in which charity law affects charitable organizations also vary. Charitable organizations may not use any of their funds to profit individual persons or entities.^[2] However, some charitable organizations have come under scrutiny for spending a disproportionate amount of their income to pay the salaries of their leadership.

Financial figures (e.g. tax refund, revenue from fundraising, revenue from the sale of goods and services or revenue from investment) are indicators to assess the financial sustainability of a charity, especially to charity evaluators. This information can impact a charity's reputation with donors and societies, and thus the charity's financial gains.

Charitable organizations often depend partly on donations from businesses. Such donations to charitable organizations represent a major form of corporate philanthropy.^[4]

To meet the exempt organizational test requirements, a charity has to be exclusively organized and operated,^[1] and to receive and pass the exemption test, a charitable organization must follow the public interest and all exempt income should be for the public interest.^[1] For example, in many countries of the Commonwealth, charitable organizations must demonstrate that they provide a public benefit.^[5]