As it has been pointed out, when time comes to establish this classification, in practice, it becomes extremely difficult to know in which classification you fit. Increasingly, not for profits are operating at various levels and conducting a different type of activities. The desire was to make it less complicated for individuals who are incorporating or operating within a not for profit to determine in which category he fits.
To simplify things, baselines, minimum criteria and some level of flexibility were instituted enabling individuals to put together a corporation and its regulations in a way that makes it possible for the corporation to carry out its operations and make its objectives. A distinction just had to be made between solicitation and the origin of funds as a result of the public interest component of funding which essentially means public money.
The goal was to essentially avoid a overall complex situation linked to the classification process which would only have led to debate over which category you actually fit into.