Applicants assisting ethnocultural communities

Policy statement

Reference number
CPS-023

Effective date
June 30, 2005

A. Purpose

This policy sets out the guidelines that the Canada Revenue Agency (CRA) Charities Directorate use to determine if an ethnocultural organization or an applicant providing assistance to ethnocultural communities in Canada can be registered as a charity.

B. Statement

A group that provides assistance to an ethnocultural community or communities, or that educates the public about a particular culture, may be eligible for charitable registration. This policy outlines possible options for such groups, within each of the categories of charity as defined by the parameters of charity law and the Income Tax Act. You may be interested in this policy if you are:

C. Definitions

In this section, we explain some of the terms we use in this policy.

An ethnocultural community or group is defined by the shared characteristics unique to, and recognized by, that group. This includes characteristics such as cultural traditions, ancestry, language, national identity, country of origin and/or physical traits.

To the extent that religion is inextricably linked to the group's racial or cultural identity, it can also be recognized as a defining characteristic. In some cases, a group may view its common origin as pan-national, or it may be based on geographic region of origin. These characteristics are the basis on which, generally speaking, one group culturally distinguishes itself from another.

Sometimes encompassed by the term ethnocultural are groups that identify as ethnoracial or racialized.Footnote 1  Some use these terms instead of ethnocultural, to make it clear that groups distinguishable by a visible characteristic (often skin colour, but also other shared physical traits) are more vulnerable to discrimination and disadvantage.

Aboriginal peoples: The case law recognizes Aboriginal peoples as having a distinct status (based on their unique historical, legal, and constitutional position in Canada). As a result, organizations that restrict certain services to Aboriginal peoples can already qualify for registration as a charity. For more details, see Policy statement CPS-012, Benefits to Aboriginal peoples of Canada.

Disadvantage: This is reflected in the barriers some groups face to full and equal participation in Canadian society.Footnote 2 They may be disadvantaged socially, politically, educationally, as well as economically. For example, members of some ethnocultural and ethnoracial communities experience discrimination, unequal access to services (for example, due to language or cultural barriers), high levels of poverty, and greater vulnerability to violence (for example, the target of hate crimes).Footnote 3  This disadvantage sometimes results in substandard living conditions in neighbourhoods that have inadequate housing, high crime rates, low educational achievement, and public health problems. Not all ethnocultural communities in Canada will face disadvantage, nor will ethnocultural communities experience exclusion in the same way.Footnote 4

Ethnocultural work: This term describes the range of activities undertaken by an ethnocultural community, as well as by organizations helping an ethnocultural community or group of communities. It includes helping individuals, as well as addressing systemic issues. Whether or not specific activities qualify as charitable depends on a range of factors that we outline in this policy.

Note

We use the terms objects and purposes interchangeably in this policy.

D. Implementation

Rationale

1. Many organizations play a vital role in meeting the needs of ethnocultural communities, and in helping immigrants and refugees in Canada. It is recognized that the role played by such organizations, through the provision of programs and services, is of significant value, not just to the individuals and communities served, but also to the broader Canadian community. These organizations are increasingly important, given the shift in public need that corresponds to changing Canadian demographics, as well as the rates of poverty experienced by racialized groups in particular. For example, ethnoracial minorities have become more significant demographically,Footnote 5  and recent studies document the considerable barriers faced by ethnoracial communities, both as new and as long-standing Canadians.

2. To ensure that race and ethnicity do not restrict a person's full and equal participation in Canadian society, services to help new Canadians are needed. Individuals who are part of ethnocultural and ethnoracial communities who are not immigrants, but who continue to face disadvantage, may also need assistance. (For example, this could be someone born in Canada whose parents were immigrants, as well as someone whose ancestors have been in Canada for many generations.) For organizations that address these public needs, and that want to become registered as charities, the process is not always straightforward. In response, we have developed this policy to clarify what purposes and activities are acceptable within the parameters defined by charity law and the Income Tax Act.

E. Organization of this policy

3. This policy covers the following areas:

F. An overview of ethnocultural work

4. This section describes, in general terms, what ethnocultural work includes; it is not intended as a guide for what is charitable. Determining if the purposes, activities, and intended beneficiaries of ethnocultural work qualify for registration depends on a range of factors that are outlined later in this policy.

5. Organizations that do ethnocultural work may be limited to a specific area (for example, a municipality, region, or province), or they may be national in scope. They may be groups made up of members from the communities themselves, groups unrelated to the communities, or both. Their activities may include providing facilities, programs, or direct services, or functioning as an umbrella group (see paragraphs 48 to 51 of this policy). They may want to assist a specific ethnocultural community, or a grouping of communities. They may address the needs of newly established communities, or those that are long-standing, but that still face disadvantage.

6. The following are some examples of ethnocultural work:

7. Sometimes ethnocultural work is focused on a sub-group such as youth, seniors, or women. This is out of an awareness that there are intersecting or overlapping factors that define the types or degrees of disadvantage. There may also be a focus on concerns that emerge for these communities in ways that are specific to them (for example, discrimination, unemployment, or violence).

G. General requirements for registration

8. Depending on their approach, applicants who help ethnocultural communities can potentially qualify under any of the four identified categories of charitable purposes. Each of the purposes proposed by the applicant must fall within at least one of the following four categories: Footnote 6

9. It is also acceptable to propose purposes that fall under combinations of two or more of these headings.

10. All of the objects set out in the applicant's governing documents must be charitable, otherwise the applicant cannot be registered. For example, if an applicant includes an object that is not accepted as charitable at law (such as an ethnocultural group whose purpose is to organize social events for its members),Footnote 7  the applicant cannot be registered because not all of its objects would be charitable.

11. It is important that charitable purposes be properly stated and activities sufficiently detailed to ensure the organization conducts only charitable activities. For information on charitable purposes and activities see Guidance CG-019, How to draft purposes for charitable registration, Describing your activities, Factors that will prevent an organization from being registered as a charity, and What is a governing document

A note about advocacy

12. Ethnocultural work can involve advocacy a charity may undertake for disadvantaged individuals, such as to help them gain access to entitled services or resources. Advocacy may also take the form of a public policy dialogue and development activity (PPDDA), whereby a charity seeks to influence the laws, policies, or decision of a government, whether in Canada or a foreign country. The Income Tax Act places no limits on the amount of PPDDAs a charity can engage in, as long as a charity's PPDDAs are carried on in furtherance of its stated charitable purposes.

Public benefit

13. To be eligible for registration, organizations must also be established for the benefit of the public. There are two distinct but closely related parts to public benefit based on case law:

14. The onus of establishing that the purposes and activities are both charitable and established for the benefit of the public is on the applicant. For more information on how public benefit is determined, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.

Focusing or restricting benefit

15. Activities or services, typically those arising in the fourth category of charity, other purposes beneficial to the community, must be directed at the public or to all members of the public who need the help or facilities being provided.Footnote 9  For example, an organization that provides social services to anyone who needs them, or an organization that provides settlement services to all refugees and immigrants in need of such services would meet this requirement. Organizations that want to focus on a specific community can also potentially be registered. However, there has to be a logical connection between the focus and the benefit provided, and that connection needs to be explained in the application for charitable status.Footnote 10  Excluding some individuals or parts of the community with the identified need would not be acceptable.Footnote 11 This requirement applies to all groups proposing to focus their services more narrowly than the general public, including ethnospecific organizations.

16. When is the focus relevant to achieving the charitable object(s)? Operating a facility open to all seniors, but that addresses the needs of people from the same ethnocultural group, by focusing on their culturally specific needs such as language, diet, and customs, would be one example. (For more details, see Guidance CG-026, Relieving conditions attributable to being aged and charitable registration). Setting up job preparation assistance focusing on ethnospecific communities with similar training needs and barriers to employment, would also be an example of a sufficient link.

17. Focusing employment assistance on an ethnic group when there is no identified need would not meet the criteria (for example, a well-established community, that has no difficulty accessing employment assistance due to linguistic or cultural reasons, and, as a group, is not disproportionately affected by unemployment). An organization that provides services to the members of their ethnospecific community based on personal affinity alone would not be establishing a sufficient link between the purpose and the beneficiary, since the selection criteria for beneficiaries is not sufficiently related to the charitable relief being provided.

18. Providing substantiating documentation such as a needs assessment or research would be advisable for any group with fourth category purposes limiting their beneficiaries, in order to establish that there is a need to focus the services in the manner proposed. This might include, for example, demographic information about the intended beneficiaries, their specific service needs, or the availability of appropriate services or barriers to access. Many documents and reports detailing such information are publicly available, and links to some of the online resources available are listed in Appendix B of this document.

19. Organizations that restrict services to a specific community—in other words, those closed to the public—can also potentially qualify. In order to restrict services to a specific group of beneficiaries (for example, racial, cultural, or similar criteria), the reason for the restriction must be directly related to the charitable purpose for which the organization was set up. However, considerably more justification would be required for an outright restriction of beneficiaries, because such organizations have a far greater burden of establishing public benefit than organizations that only want to focus their services. Few circumstances will require an absolute restriction. Most applicants will want to address specific community needs by focusing services as outlined above.

20. The following are some examples of the circumstances in which services could potentially be restricted to specific beneficiaries (not open to the public at large).

A. Where the restriction is justified by an identifiable need affecting a segment of the community:

B. Where the restriction would be the most efficient or effective way of meeting a specific need:

21. More details about the factors that are considered when applicants propose to restrict or focus benefit can be found in section 3.2.2 of Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.

Is promoting multiculturalism a charitable purpose?

22. There are few cases in which the Canadian courts have considered the issue of charitable registration in connection with multiculturalism or multicultural endeavours. As a result, the legal meaning of the term is vague. Multiculturalism is an expansive concept,Footnote 12  and as a purpose, it would also not fall within any of the recognized categories of charity. For example, promoting multiculturalism might encompass purposes that could not be considered charitable, such as the promotion of a particular culture, which lacks the necessary element of altruism to enable it to qualify as a charitable purpose.Footnote 13  As a result, applicants for charitable status who include as their purpose the promotion of multiculturalism are not eligible for registration.

23. However, there are many potentially charitable purposes that further multiculturalism. Given the range of possibilities, they cannot be listed here, but many illustrations can be found in the section that follows, as well as Policy statement CPS-021, Registering charities that promote racial equality. Rather than saying that your organization's purpose is to promote multiculturalism, you should state the purpose that you are undertaking that contributes to the promotion of multiculturalism. This might include, for example, educating about or promoting racial (including ethnic) equality, fostering positive relations between such communities, or advancing education by increasing the public's knowledge and appreciation of a particular group's art, culture, language, and traditions. Other examples include helping with the settlement of refugees and immigrants in need of such services.Footnote 14

H. Ethnocultural applicants and the four categories of charity

24. We discuss the four categories of charity in this section. The details that are specific to each category are outlined, and where relevant, the types of applicants are also grouped within each of the four categories according to whether they are:

25. Some proposed purposes will fit into more than one of these groupings, just as some will fit into more than one category of charity. Multi-service organizations will also not fall neatly into any one grouping. You should consult all of the relevant sections that relate to the makeup of your organization.

26. For more information on each of the four categories of charity, go to Charitable purposes.

Relief of poverty

27. In this category of charity, public benefit is usually assumed if the purpose of the program or service is to alleviate poverty. The beneficiaries may be restricted according to almost any criteria, as long as the service provides the basic necessities of life (such as clothing, food, or shelter), or gives people experiencing poverty access to the simple amenities that most people take for granted (for example, helping with payments for medical care for new Canadians who are experiencing poverty and are not eligible for provincial health insurance). Many organizations providing the basic necessities and simple amenities will also consider needs relevant to the cultural group(s) being served.

28. Community services such as food banks and shelters that are designed to alleviate the poverty of a particular ethnocultural community are acceptable.

29. Ethnocultural organizations (such as groups made up of individuals from one or multiple ethnocultural communities set up to help these groups) that focus on the alleviation of poverty are also acceptable.

30. Settlement organizations that provide help specifically for refugees or immigrants who are experiencing poverty have been found by the courts to be charitable. When an organization seeks to qualify for charitable registration status because it is relieving the poverty of immigrants, it will need to limit its services to beneficiaries in need. Refugees are usually assumed to be economically disadvantaged.

31. For more examples of ethnocultural work that would and would not qualify under relief or poverty, see the lists below:

Acceptable

An example of accepted wording for this category: "To relieve poverty by providing food and other basic supplies to persons of low income, by establishing, operating, and maintaining shelters for the homeless, and by providing counselling and other similar programs to relieve poverty."Footnote 16

Unacceptable

Advancement of education

32. The advancement of education in the charitable sense includes purposes that educate by either:

33. There are guidelines that describe the requirements for both types of purposes. See Guidance CG-030, Advancement of education and charitable registration, and Policy statement CPS-029, Research as a charitable activity.

34. Community services such as those providing educational activities to help ethnocultural communities, or activities that educate agencies or the public in general (for example, with regard to cultural sensitivity) are acceptable.

35. Ethnocultural organizations that educate about co-operation among people of different cultures, or educate the public about a particular culture are acceptable. However, the focus for the latter needs to be clear. There is an important difference between educating Canadians about a culture, which is charitable, and promoting a culture, which is not. When an ethnospecific group's purpose is to provide activities only for the group itself (for example, an inward focus on preserving their language or cultural practices, rather than a broader focus on educating the public), this would not have the public character required of a charity. Applicants should show how their activities would enhance knowledge or further education for the benefit of the public. Although it can sometimes be difficult to differentiate a group that is promoting its own interests from one that is educating about its culture, a distinction between them can often be made by looking at the purpose or general orientation of the group, its activities, and who will benefit from its programs.

36. Settlement organizations that provide training and educational activities to foster the integration of refugees and immigrants needing such help are acceptable. Examples of this are educating about citizenship or how to find employment, as well as training in official languages.

37. For more examples of ethnocultural work that would and would not qualify under advancement of education, see the lists below:

Acceptable

Unacceptable

Advancement of religion

38. This category refers to promoting the spiritual teachings of a religious body, and maintaining the doctrines and spiritual observances on which those teachings are based. A religious body is considered charitable when its activities serve religious purposes for the public good.Footnote 18   An example of accepted wording for this category would be "to advance and teach the religious tenets, doctrines, observances, and culture associated with the (specify faith or religion) faith."Footnote 19 Footnote

39. Religious worship focused on a specific linguistic community is acceptable.

Note

CRA is looking at various issues that arise under this category of charity with a view to publishing comprehensive guidance on the advancement of religion. The final policy will be linked to this section when it becomes available.

 Other purposes beneficial to the community

40. The fourth category includes charities whose purposes do not fall within the other three categories, which are of benefit to the public in a way the law regards as charitable. Many organizations engaged in ethnocultural work will typically fall within this category—ethnospecific community groups are often well-situated to address discrimination and disadvantage, or to meet specific needs in their community because they have first-hand knowledge of how best to help. The fourth category covers a broad range of programs, including various community and immigrant settlement services, as well as organizations that promote racial equality through positive race relations efforts and the elimination of racial discrimination, which is considered a charitable purpose in the fourth category of charity.

41. Activities and services in this category are generally expected to be open to the public at large.Footnote 20   When an organization wants to focus its services, or place a restriction on who can benefit, it has to be able to show that there is a logical link between the benefit being offered and any restriction on the community being served. An acceptable focus or restriction would be one that flows from or is clearly linked to the purpose that is proposed, without unreasonably excluding beneficiaries that would otherwise be eligible. For more details on the requirements involved, see paragraphs 15 to 21 of this policy, and also section 3.2.2, "Restricting or focussing benefit to a specific group of beneficiaries", in Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.

42. The onus is on the applicant to explain the link between the purpose and the need for the intended focus or restriction. (For resources, see Appendices A and B.)

43. Community services or ethnocultural organizations: Examples of some of the activities that could potentially be undertaken by community service and ethnocultural organizations in this category of charity can be found in the table below. Community capacity-building efforts, such as helping people from disadvantaged communities overcome social exclusion, develop the skills to solve problems, and act collectively to improve their lives and local conditions can be acceptable in some cases. For more information, see Guidance CG-014, Community economic development activities and charitable registration.

44. Settlement organizations with activities that facilitate the settlement and integration of refugees and immigrants in need of these services are acceptable. Such activities might include counselling support, interpretation, employment preparation and assistance, or social services. They could also include capacity-building efforts (see above).

45. An organization that offers services required by certain immigrants could potentially focus its services, if it can be established that this would be required to adequately meet the settlement-related needs of those immigrants. For example, providing employment services to immigrant women who are at risk of permanent exclusion from the workforce, or who cannot become self-supporting without help, would be an acceptable beneficiary group when such a need exists. However, it would not be acceptable to provide employment assistance to immigrants not in need of these services.Footnote 21 

46. Umbrella organizations are generally not involved directly in meeting the needs of individuals, and often serve a membership made up of similar groups. There are two types of umbrella organizations.

47. The first, charities established to assist other registered charities, work to improve the effectiveness of charities. Improving the efficiency and effectiveness of other registered charities is considered a charitable purpose in and of itself, and is acceptable in the fourth category of charity. To qualify for registration, this type of organization must demonstrate that at least 90% of the beneficiaries of its services are registered charities.

48. The second type, umbrella organizations advancing a recognized charitable purpose, are established to further a particular charitable purpose other than helping charities. They are often made up of registered charities, but may also contain non-registered groups that, for a variety of reasons, do not seek registration. One example of an umbrella organization advancing a recognized charitable purpose would be a network of community groups and settlement agencies that work collaboratively to find solutions to employment barriers faced by refugees and new immigrants. Another example would be groups participating in an anti-racist or positive race relations coalition that share research, informational materials, or expertise, and act as a clearinghouse for the promotion of racial equality.

49. For more details on the first type of umbrella organization, charities established to assist other registered charities, see Policy statement CPS-026, Guidelines for the registration of umbrella organizations and title holding organizations.

50. For more examples of ethnocultural work that would and would not qualify under other purposes beneficial to the community, see the lists below:

Acceptable

Unacceptable

Appendix A – Research

Appendix B – Resources

Footnotes

References

Page details

Date modified: