Introduction - Segment 1
Welcome to “Introduction”, part of the Arts Activities and Charitable Registration (Guidance CG-018) webinar.
My name is Jean Pierre Bernard and I am from the Charities Directorate at the Canada Revenue Agency.
In today's presentation, we'll discuss the new CRA guidance document, the CG-018, Arts Activities and Charitable Registration.
The guidance was issued on December 14, 2012. This publication followed a targeted consultation process and a full public consultation process.
This guide replaces Summary Policy CSP-A08, Arts, and Summary Policy CSP-A24, Artists.
Before getting into the specifics of the document, I'd like to outline some of the key points.
- Arts activities can further a number of different charitable purposes, from educational purposes to health-related purposes (for example, art therapy).
- This guidance is mainly for those organizations whose activities focus on developing or promoting the arts through the following three purposes.
- advancing education
- advancing the public's appreciation of the arts
- promoting the commerce or industry of the arts
- The guidance outlines the criteria that need to be met for registration for these three purposes. If the charity has other purposes it wants to further through arts activities, it should consult other guidance products for details on those purposes.
So why create a new guidance?
Traditionally, charities promoting the arts were registered under the second charitable category—the advancement of education.
In 1999, the Supreme Court of Canada's Vancouver Society decision outlined specific criteria for activities to be considered charitable under the advancement of education category.
This includes the need for such activities to be in the form of structured programs that contain what has been described as a teaching or learning component. Many common arts activities, such as performances, exhibitions, and presentations, do not meet these criteria.
However, since the courts had previously recognized purposes that advance the public's appreciation of the arts under the fourth category, registration was still possible, but with different criteria.
The guidance explains the different possibilities for registration and details how organizations that have arts activities can meet the public benefit requirement in each category.
Charities whose activities further the second category purpose of advancing education will see little change.
Charities whose activities fall under the fourth category purposes of:
- advancing the public's appreciation of the arts and
- promoting the commerce or industry of the arts now have clear guidelines on how to show public benefit, as it is required for all four category purposes.
What is the public benefit requirement?
In charity law in Canada, charities may be registered if their purposes fall into one or more of the four categories of charitable purposes:
- relief of poverty;
- the advancement of education;
- advancement of religion; and
- other purposes beneficial to the community that the law regards as charitable.
To be registered as charities, organizations have to meet a number of requirements, one of which is the public benefit requirement.
The public benefit requirement involves a two-part test:
- a charitable benefit needs to be provided; and
- the charitable benefit needs to be provided to the public or a large enough segment of the public.
All registered charities must be able to show that their purposes, and the activities that further these purposes, deliver the necessary public benefit.
How organizations meet the charitable benefit requirement will differ, depending on the purposes being furthered.
The public part of the public benefit requirement is met through the standards that are applied to all charities.
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