Social Businesses; Community land trusts; CED activities - Segment 4


Welcome to Social Businesses, Community Land Trusts and Community Economic Development Activities, part of the Community Economic Development Activities and Charitable Registration (Guidance CG-014) webinar.

Generally, social businesses for individuals with disabilities are different from on-the-job training as they seek to provide permanent employment, rather than employment for a limited time period.

Social businesses must also meet certain criteria in order to be eligible, however, as noted earlier, we removed some criteria that were not relevant and made other criteria “should haves” rather than “must haves''.

In all cases, the social business, must directly further a charity's stated charitable purposes.

The two “must haves” in terms of characteristics are as follows:

  • The workforce is composed entirely of individuals with disabilities (with exceptions for the supervisory staff); and
  • The work is specifically chosen and structured to take into account the special needs of individuals with disabilities in order to relieve conditions associated with those disabilities which would normally prevent the individuals from being able to work.

Social businesses for individuals with disabilities

The two “should have” characteristics for social businesses are as follows:

  1. It is expected that some associated job-related training that enhances the general skills of the eligible beneficiaries be incorporated into the programs; and
  2. That the eligible beneficiaries be involved in a significant way in managing and making decisions for the social business.

A social business must focus on helping eligible beneficiaries and not on making profit. For more information, go to policy statement – CPS-019, What is a related business?

Community Land Trusts

A community land trust is set up to ensure that land will continue to be available to the benefit of a community.

For example: an organization could purchase a piece of land to be used as a communal vegetable garden in an urban area.

Generally, community land trusts operate by developing properties and leasing them to eligible beneficiaries.

For example, an organization could create a community land trust by leasing a building to provide housing for individuals who are poor or who have a disability.

As with the other activities, a community land trust must directly further a charity's stated charitable purposes and not simply be a traditional investment.

CED activities that promote commerce or industry

Promoting a particular industry or trade will only be charitable if doing so results in a charitable benefit being provided to the public or a sufficient section of the public.

Examples of the types of purposes that could enhance an industry as a whole and potentially deliver a charitable public benefit include those that:

  • promote greater efficiencies within the industry, if those efficiencies benefit the general public; or
  • promote and facilitate the achievement, preservation and maintenance of high standards of practice within an industry, if doing so benefits the general public.

Purposes and activities must NOT focus on advancing the interests of members of that industry.

Objective evidence is used to determine whether a benefit to the public will result from promoting an industry. The non-expert opinions of the founders, directors, trustees, members or supporters of the organization are not considered objective evidence, and an expression of non-expert opinion or belief, or merely stating that a public benefit will result from a purpose, is not enough.

Purposes that are not charitable as promoting commerce or industry:

  • Promoting entrepreneurship by helping entrepreneurs bring new and innovative ideas to the marketplace.
  • Or promoting business development by providing funding (including start-up loans), and mentorship programs.

CED activities in areas of social and economic deprivation

CED activities may be charitable if they improve socio-economic conditions for the public benefit in an area of social and economic deprivation.

Deprived areas have one or more of the following characteristics at 1.5 times the national average:

  • unemployment for two or more consecutive years;
  • crime, including family violence;
  • health problems, including mental health issues, drug and alcohol addiction, and suicide; and
  • children and youth at risk (taken into care or dropping out of school).

Special consideration relating to the assessment of private benefit are generally allowed in deprived areas.

For example, a charity that wishes to provide health care services in a remote area and needs to recruit health care professionals from other areas could offer such things as higher pay or reduced clinic overhead to attract health care providers, provided that the incentives are not unreasonable.

The same can be said about preventing further unemployment by providing training for the workers of a specific company in a deprived area, where, without this training, the company would be forced to close or dismiss workers.

Appendix A: Terms and definitions

Appendix A of the Guidance was added because there are many terms related to CED and multiple definitions for each one. The definitions may be helpful for readers interested in considering the concepts further. They are provided for reference only and will not be used as determining factors in any registration or auditing processes.

The following definitions are available in section F of the guidance:

  • Community Economic Development
  • Social Enterprise
  • Social Finance
  • Community Capacity Building

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