Under Canadian Law, there are four heads of charity that an organization must fall under to be considered charitable. The four heads are: relief of poverty, advancement of education, advancement of religion, or other purposes beneficial to the community in a way the law considers charitable. This post is the final part of our series on each of the four heads of charity. In this post, we dive into other purposes beneficial to the community as a charitable purpose and the activities that align with it.
Criteria put Forth by the Canada Revenue Agency (CRA)
When assessing whether a purpose in this category qualifies as charitable, the CRA looks for certain criteria to be met. Firstly, the purpose must be aimed at improving social conditions, enhancing the quality of life, or serving the common good. It should positively impact the community or a significant segment of the population. Additionally, the activity must be well-defined, achievable, and measurable. It should have clear objectives and a plan for implementation. The CRA expects organizations to show how their proposed activities will provide a benefit to the community while also providing evidence of the outcomes achieved. The CRA assesses each application individually, considering the specific facts and circumstances surrounding the organization and its intended purpose. The above criteria are used by the CRA to determine if an organization qualifies for charitable status.
Other purposes beneficial to the community in a way the law considers charitable
The CRA recognizes that there are various activities that can contribute to the betterment of the community, which may not fall under the predefined categories of charitable purposes. Some purposes included in this category are the promotion of health incentives, protection of the environment, protection of animal welfare, and advancement of the arts. Other purposes involve assistance for individuals with physical and/or intellectual disabilities, providing care or support for the elderly, administration of youth programs to address social issues, and providing support to struggling families. Providing amenities to the public and preserving heritage sites is also considered as beneficial to the community and can constitute as charitable.
Activities that provide a benefit to the community
Activities that fall under this category must align with the organization's purpose in a way that benefits the community. Looking at promotion of health as a purpose, some activities that an organization could pursue would be providing medical services to the public, implementing health incentive initiatives, providing counselling or support group services, or by providing emergency responder services. Another acceptable purpose is the promotion of animal welfare, which can be done through implementation of animal rescue programs, operation of adoption centers, providing emergency veterinary services, and providing education about animal welfare to the public. Each purpose within this category has many activities that can be implemented, the crucial factor being that the activities contribute to the community's betterment.
Recognition by courts
To qualify as a charity under this category, not only do the above conditions have to be met, but the proposed purposes must also be in alignment with those already deemed by courts to qualify as offering other benefits to the community. In other words, CRA can only approve applications for purposes that have already been recognized by the courts. Recognized purposes under the category of “other benefit to the community” are more limited than clients might expect, and the courts are slow to recognize new purposes under this category. For example, a recent judgement from British Columbia determined that a trust established to help people experiencing poverty to prosecute claims of wrongful dismissal is not charitable. Therefore, an organization can have a worthwhile purpose of benefit to the community that has not been recognized by the courts as charitable. In this case, the organization would have to apply to the court for recognition of their purpose as charitable. Alternatively, legal counsel can work with clients to determine what elements of the proposed purposes and activities could qualify as charitable without an application to the court.
Conclusion
The CRA acknowledges that there are many purposes that benefit the community in a way that can be deemed charitable, the expectation being they meet the criteria outlined above. Organizations aspiring to qualify under this category must provide a clear and compelling case, demonstrating how their activities will contribute to the betterment of society and serve the common good. So, while there are many purposes that provide benefit to the community, not all are considered charitable.
Outsiders Law has extensive knowledge when it comes to the charity application process. We can help organizations who want to become registered charities under the category of other purposes beneficial to the community in a way the law considers charitable. If your organization is interested in this, please contact us.
Disclaimer
The information provided in this article is for educational purposes only. Nothing contained herein should be considered as legal, professional, or tax advice. Please contact us directly if you require legal assistance.
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