Advancement of education and charitable registration
November 27, 2020
This guidance replaces Policy commentary CPC-027, Publishing a magazine; Policy statements CPS-003, Daycare facilities, CPS-013, School councils; and Summary policies CSP-B05, Broadcasting, CSP-S08, Scholarships, CSP-E01, Advancement of education, CSP-I06, Provision of information, and CSP-S09, School associations.
In addition to the requirements set out in this guidance, there are a number of other general requirements related to charitable registration. For more information, see Guidance CG-017, General requirements for charitable registration.
Guidance products can be updated. If you have comments or suggestions to improve the guidance, we would like to hear from you. To provide comments or obtain additional information, contact the Charities Directorate.
1. The Canada Revenue Agency's (CRA) Charities Directorate registers charities under the Income Tax Act, and ensures that registered charities continue to meet all associated legal and administrative requirements.
2. In this guidance, unless otherwise stated:
organization includes applicants for charitable registration, as well as registered charities
- charity law refers to common law (case law or court decisions) and legislation (primarily the Income Tax Act)
3. This guidance explains the CRA’s administrative policy on charity law, including the criteria an organization with purposes to advance education must meet to be eligible for registration.
B. General requirements for determining eligibility for charitable registration
Charitable purposes and activities
4. The purposes (or “objects”) of an organization, found in its governing documents, are the goals or objectives it is created to achieve. (For more information, see Guidance CG-019, How to draft purposes for charitable registration.) The activities of an organization are the ways it furthers its purposes.Footnote 1
5. To be registered as a charity, an organization’s purposes must be exclusively charitable. This means each purpose must satisfy the following three elements:
- fit within one of four broad categories of charity:
- relief of poverty
- advancement of education
- advancement of religion
- other purposes beneficial to the community in a way the law regards as charitable
- provide a public benefit
- define the scope of the organization’s activities
6. All of an organization’s resources must be devoted to activities that further its exclusively charitable purposes.Footnote 2
7. An organization’s purposes, and the activities that further them, must provide a public benefit. Public benefit is a two-part test. There must be a charitable benefit, and it must be provided to the public or a sufficient section of the public. In addition, any private benefit must be incidental.
8. The first part of the test requires that there is a recognizable, provable, and socially useful benefit.
9. Purposes that advance education are presumed to provide a charitable benefit, unless the contrary is shown. This means that if the benefit is not clear, an organization may have to show that a charitable benefit will result.Footnote 3
10. The CRA will examine a purpose and the activities that further it, to determine whether they meet the benefit requirement. The CRA first considers whether the purpose fits within the advancement of education category (by examining the content and process criteria explained in section D of this guidance). The CRA then considers any evidence that questions benefit. For example, operating a school to teach children appears to be a purpose that advances education, but if the school teaches illegal activities, it would not provide a charitable benefit.
11. If the charitable benefit is questioned, an organization should provide evidence that is objective, reliable and relevant. The CRA will consider evidence of widespread acceptance by those who are knowledgeable about the subject.Footnote 4
12. Purposes that are illegal or contrary to Canadian public policy do not provide a charitable benefit.Footnote 5
13. The second part of the test requires that the benefit is provided to the public or a sufficient section of the public.
14. The section of the public that may benefit from purposes that advance education (the beneficiaries) must not be unjustifiably restricted. For information on acceptable restrictions on beneficiaries for purposes that advance education, see the Scholarship section of this guidance.
15. Any private benefitFootnote 6 must be incidental to achieving the charitable purpose. This means it must be necessary, reasonable, and proportionate to the resulting public benefit.
16. For more information about public benefit, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.
17. There are other requirements an organization must meet to be eligible for registration. For more information, see Guidance CG-017, General requirements for charitable registration.
C. Education under charity law
18. Although the concept of education is broad, and all experience may be said to educate,Footnote 7 what qualifies as education under charity law is more limited. For the most part, it means to provide knowledge or develop abilities by deliberate teaching or training.Footnote 8
19. Before 1999, Canadian courts had generally limited education to structured classroom teaching of traditional academic subjects, offered at schools, colleges and universities.Footnote 9 The courts also considered education to include the improvement of a useful branch of human knowledge through research.
20. In 1999, the Supreme Court of Canada expanded educationFootnote 10 to include more informal training that would still “advance the knowledge or abilities of the recipients.”Footnote 11 But the Court was careful to limit its expansion,Footnote 12 recognizing that what is charitable should evolve incrementally to reflect changing times, by comparing new purposes to those the courts previously found to be charitable.Footnote 13
21. Today, the advancement of education includes purposes that educate by:
- training that provides knowledge or develops abilities
- improving a useful branch of human knowledge through research
22. This guidance addresses the first type of purposes, training that provides knowledge or develops abilities, and describes the criteria they must meet to be considered charitable. It also addresses special topics related to the advancement of education.Footnote 14
23. The second type of purposes, improving a useful branch of human knowledge through research, is addressed in Policy statement CPS-029, Research as a charitable activity.
D. Purposes that educate through training
24. Purposes that educate through training generally fall into two groups:
Examples of purposes that educate through structured and targeted teaching or learning:
- To advance education by operating a private secondary school in (specify location).
- To advance education by providing adult continuing education courses in business and accounting in the community of (specify location).
- To advance education by providing a series of seminars on the history of Indigenous art in Canada to the general public.
- To advance education by providing a series of workshops on basic car maintenance to the general public.
- To advance education by providing distance learning programs in business and accounting to the public.
- To advance education by providing general-interest art classes to the public.
- To advance education by providing French language training to the public.
- To advance education by providing courses, seminars and workshops on marketing, finance and bookkeeping to artists.
26. To be charitable, the education advanced by these purposes must meet both the content and process criteria.
The content criteria (education) include:
The process criteria (structured and targeted teaching or learning) include:
27. To advance education, the subject matter must be usefulFootnote 20 and have educational value. This means it must provide a charitable benefit to the public.
28. The educational value is often clear (for example, the study of history, economics, or geology).Footnote 21 However, a subject may be considered to have no educational value if it is too frivolous (such as the public exhibition of “junk"Footnote 22 ), improper or harmful (such as teaching how to pickpocketFootnote 23 or the benefits of smoking tobacco), or irrational (such as teaching that the earth is flatFootnote 24 ), or if it is illegal or contrary to Canadian public policy.Footnote 25
29. The subject matter should be well-reasoned, meaning it should be factual or accurate, and fully and fairly analyzed. It may be theoretical or practical, speculative or technical, scientific or moral. It may include training in necessary life skills or practical subjects.Footnote 26
30. Education in the charitable sense can provide knowledge or develop abilities for many reasons. It might do so for its own sake or as a means to an end.Footnote 27 For example, cooking may be studied for personal interest, or to advance a career as a chef.
31. If the charitable benefit of a subject is questioned because the educational value is not clear, an organization may have to show it is present. In that case, an organization should provide evidence that is objective, reliable and relevant. The CRA will consider evidence of widespread acceptance by those who are knowledgeable about the subject.Footnote 28
32. Simply promoting a particular point of view, or attempting to persuade, does not advance education under charity law.Footnote 29 Concerns arise when the subject matter contains information and opinion that is mostly biased or one-sided. This often occurs when a subject is controversial.Footnote 30 The subject matter should reflect a genuine attempt to provide knowledge or develop abilities.Footnote 31
33. Although an organization may educate from a particular perspective, in that it may have a point of view on a subject, there needs to be a clear attempt to encourage awareness of different views. This allows recipients to make up their own minds.Footnote 32 For example, an educator may share an opinion or view while teaching a course, but the course material should be reasonably objective. It should reflect a genuine attempt to further students’ knowledge or abilities.
34. However, a purpose to educate about a subject that presents a point of view which is generally accepted to be for the public benefit can advance education. For example, to educate that peace is preferable to war, or that smoking is harmful, is clearly for the public benefit, and can therefore be charitable. The benefit of peace is not controversial. But if the public benefit of the subject is not obvious, or it is not possible to determine it is for the public benefit, the purpose does not advance education, and is therefore not charitable.Footnote 33
35. The CRA considers an activity to educate in the charitable sense if it represents a reasonably objective attempt to identify and disseminate accurate, well-reasoned information.Footnote 34 Indicators that an activity is promoting a point of view or attempting to persuade, rather than educate, may include:
- providing incorrect or distorted information
- leaving out information reasonably required to understand a subject
- teaching a subject by providing materials that are not well-reasoned (factual or accurate, and fully and fairly analyzed)
- providing opinion or one-sided argument
- using language that is emotional, exaggerated or inflammatory
36. The process criteriaFootnote 35 are about how the education is organized and presented. Although all criteria must be present, there is some overlap, or shared indicators, as listed below.
37. To advance education, information or training must be provided in a structured manner.Footnote 36 Indicators of structure (all are required) consist of:
- a clearly defined educational goal
- a course outline or plan designed by qualified individuals
- educational materials (a thorough body of knowledge) that can further the educational goal
38. Structure may also require access to any tools, aids or equipment that may be required to enable students to learn (for example, a course in computer-assisted design may require access to a computer and specialized software).
39. Education may be delivered in a variety of ways, and by way of a variety of media. For example, it may be delivered through recreational activities or in print or online format, as long as all criteria are present.
40. The amount of structure required depends on the nature of the activity and the audience. For example, the structure required for a formal college course on horticulture will be different from the structure required for a one-day community workshop on backyard vegetable gardening. But both courses may further a purpose that advances education.
41. To determine if there is enough structure, an organization should consider the educational materials, the audience, and the method of delivery. For example, by going hiking with a friend who happens to be a geologist, the hiker may, by chance, learn some local geology. On the other hand, going for an organized hike with the same friend, designed as a structured course or workshop on local geology, may be educational in the charitable sense. The geologist would intend to teach a subject (educational goal), and would develop a plan, a route, and educational materials to permit learning.
42. There must be a legitimate, targeted attempt at educating. “Simply providing an opportunity for people to educate themselves, such as by making available materials with which this might be accomplished but need not be, is not enough.”Footnote 37
43. A targeted attempt at educating also means the educational activities and associated materials are developed by qualified individual(s) and adapted to meet the learning needs of the students, taking into account age, education level, and learning style.
44. The focus should be to educate. Activities that do not themselves educate, such as entertainment or recreational activities, may be acceptable if they are an incidental way of furthering the charitable purpose.
45. Indicators of a legitimate, targeted attempt to educate (all are required) consist of:
- educational materials prepared by qualified individual(s)
- educational materials adapted to meet the learning needs of the students
- a process to ensure audience engagement and participation, such as registration or attendance (registration is important, for example, in the case of self-study or distance learning)
46. For example, creating a website that provides information on personal financial planning may be informative, but would not be a targeted attempt to educate. However, a course designed for teens on practical money skills, taught by a qualified teacher, that used similar information, might advance education. In the same way, a course for older adults on planning for retirement taught by a qualified instructor using similar information might advance education. Both courses would need to be designed to meet the needs of the students, and include teaching or learning.
47. To advance education, there must be a teaching or a learning component, or both.Footnote 38 Both teaching and learning require students to be actively engaged with the subject matter. There must be more than simply an opportunity for people to educate themselves.
48. A teaching component requires that direct instruction is provided. Teaching could include, for example, lecturing, guiding, coaching, or leading discussions. A learning component requires that there be systems to assess learning. These systems could include testing, evaluation, or observing a demonstrated skill. For example, teaching a structured course in child care might advance education. Alternatively, if the course was designed by a qualified individual as a plan of self-study or distance learning, and students registered, were provided with materials, and were tested at the end, this might also advance education.
49. Indicators of a teaching component (both are required) consist of:
- instruction by an individual who is qualified
- opportunity for students to obtain feedback, clarification, or answers to questions
50. An indicator of a learning component consists of:
testing, evaluation, demonstration of skill, or other assessment of learning achievement
51. The courts have recognized certain other purposes that advance education. Most are connected with and support formal or traditional classroom education. They include, for example, building and maintaining schools, providing scholarships to students, and providing books and equipment to students or schools. Some of these purposes are discussed below.
52. The establishment and maintenance of a scholarship,Footnote 39 bursary,Footnote 40 or prizeFootnote 41 may be a charitable purpose under the advancement of education, if the funds advance education and provide a public benefit.
53. Scholarships or bursaries cover expenses connected with training that provides knowledge or develops abilities, as well as research.Footnote 42 This includes tuition and associated expenses,Footnote 43 such as room and board, travel expenses, books and school supplies. Prizes reward, and therefore encourage, educational achievement.Footnote 44
Restrictions on beneficiary group
54. To meet the public benefit test for purposes that advance education, the beneficiary group should be clearly identifiedFootnote 45 and not unjustifiably restricted.
55. Generally, this means the beneficiary group must be sufficiently open in nature to show a true objective of benefiting the public.Footnote 46 However, it is acceptable if the opportunity to benefit is available to a large enough group, but by its nature it can only help one or a few at a time. For example, a single annual scholarship open to all students at a school or scholarships for students studying a particular subject at a school, is acceptable.Footnote 47
56. Beneficiaries may be restricted by eligibility criteria (who is eligible to apply) or by selection criteria (how beneficiaries will be selected from among those who apply).
57. The beneficiary group cannot be restricted to named individuals.Footnote 48 Also, the beneficiary group cannot be restricted to those who have a personal connection with one or more persons or entities,Footnote 49 such as a person’s relatives,Footnote 50 employees of a certain company,Footnote 51 or members of a certain organization,Footnote 52 regardless of the size of the group.Footnote 53
58. However, beneficiaries may be restricted:
to employees or dependents of employees in an industry or profession as a whole,Footnote 54 because members of an industry or profession do not involve a personal connection
if the restriction has been recognized by the courts. Historically, this included students attending a particular school or university,Footnote 55 students sharing a common nationality or ethnic origin,Footnote 56 sex,Footnote 57 disability,Footnote 58 or religion,Footnote 59 or the inhabitants of a sizable geographic area, such as a town or village.Footnote 60 Some of these restrictions may no longer be acceptable, as discussed in paragraph 59, below
if the restriction is shown to be linked or relevant to achieving a charitable purposeFootnote 61 (for example, a scholarship to attend a school for the hearing impaired may be restricted to persons with hearing impairment)
if a personal connection has been identified as a preference, rather than an obligationFootnote 62 (for example, a scholarship offered to students of a school, with a statement that in selecting recipients, preference may be given to relatives of an individual or employees of a company)
59. Organizations that seek to restrict beneficiaries must always ensure the restrictions are not illegal or contrary to Canadian public policy. Restrictions that may be contrary to public policy often involve a prohibited ground of discrimination specified in the Canadian Charter of Rights and Freedoms or federal or provincial human rights legislation. Restrictions the courts have sometimes found to be discriminatory, and therefore contrary to public policy, are generally based on notions of racism, sexism or religious superiority.Footnote 63 When considering restrictions on beneficiaries for purposes that advance education, recent court decisions in this area should be examined.
Selection of beneficiaries
60. An organization should establish a process to select recipients. Scholarships and bursaries may be awarded based on factors relevant to the educational purpose such as scholastic achievement, demonstrated ability, financial need, or a combination of these. They may also be awarded based on achievement in sport or other activities that are connected with, or part of, a school curriculum or program that advances education.
61. There is no poverty requirement for a purpose that advances education.Footnote 64 Therefore, beneficiaries do not have to demonstrate financial need to be eligible (unless it has been specifically included as a selection criterion).
Information to enable assessment
62. Organizations that provide scholarships, bursaries, or prizes must ensure the public benefit test is met. They should therefore maintain and be able to provide the following information:
- the nature of the scholarship, bursary, or prize
- the eligibility and selection criteria
- how and where the awards are advertised
- the process used to select beneficiaries (including whether an application form is required, who is on the selection committee and why they were selected, and whether the organization is represented on the committee)
- the amounts that are awarded
- how the funds are distributed (to the student or to the educational institution). If funds are provided in stages based on continuing eligibility (such as by attending a school or maintaining certain grades), information on monitoring ongoing eligibility should be included
Examples of purposes that advance education by providing scholarships, bursaries, or prizes to students:
- To advance education by providing science fair awards to middle school students to encourage academic excellence.
- To advance education by providing bursaries and other financial assistance to students attending (specify) university.
- To advance education by providing scholarships to students from (specify) school to be used for post-secondary education.
Schools and tuition fees
63. Establishing and operating a school, college, or university can be a charitable purpose, even if the school charges fees, provided the school is not for private profit.Footnote 65 The presence of fees does not mean a program is not charitable, as long as the public benefit test is met.Footnote 66 For more information, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.
Providing educational facilities, teachers, equipment, and supplies
64. Providing and maintaining educational facilities (such as schools) that will be used to advance education is a charitable purpose. This is because they are connected with and support education. In the same way, providing teachers for a school, and providing equipment and supplies (such as desks, textbooks, computers, and notebooks), that will be used to advance students’ education are charitable purposes.
65. Since there is no requirement for an element of poverty in a purpose that advances education, an organization does not have to consider the financial means of recipients.Footnote 67 However, providing educational equipment and supplies may also further a relief of poverty purpose if the beneficiaries are shown to be poor.
Sports and education
66. The promotion of sport is not a charitable purpose. However, a purpose to educate the students of a school by providing sporting activities and facilities as part of a school curriculum or program can be charitable.Footnote 68 This is the case even if the sporting activity is provided by a separate entity, but takes place in the school context.Footnote 69 This is because the courts have recognized sport as being a necessary element to developing a well-rounded student.Footnote 70
67. Providing sporting equipment and facilities to a school that includes sport in its curriculum is a purpose that advances education.Footnote 71
68. A purpose that advances education may be furthered through sport if the sporting activity itself is shown to be a reasonable way to further the purpose and it meets the content and process criteria. For example, an organization set up to teach children life skills, such as teamwork and co-operation, could use a sporting activity, such as baseball, as part of its program. The program must be structured and targeted, and instruction must be provided by a qualified individual.
69. A school program with an alternative structure (such as one set up to help young athletes complete their academic studies) may advance education if the focus is on academics. A focus on training students in order to develop them as athletes reflects a purpose of promoting sport rather than advancing education.Footnote 72 For more information, see Policy statement CPS-027, Sports and charitable registration.
Community groups and clubs
70. Instructing children in loyalty, good citizenship, and discipline in the context of youth groups such as Scouts or Guides,Footnote 73 and operating a club to provide chess tournaments to youth,Footnote 74 have been found to be purposes that advance education. Purposes such as operating an after-school club that provides homework help or that teaches arts and crafts or leadership skills to children could also advance education if it meets the content and process criteria.
71. These programs may include recreational or sports activities if they are shown to be reasonable ways to achieve the educational purpose, and are part of an overall program that advances education.
Alumni associations / School councils
72. Establishing an alumni association to further the education of students of a school or other educational institution may be a charitable purpose.Footnote 75 Alumni associations often fundraise to support the educational institution, or provide scholarships, bursaries, or prizes to its students.
73. The focus of the organization must be on education. Social or other activities that do not themselves educate may be acceptable if they are an incidental way of furthering an educational purpose. Any private benefit provided to the association’s members must remain incidental to achieving the charitable purpose.
74. In the same way, establishing a school council (also known as a parent association or home and school association) to further the education of students of a school may be a charitable purpose. Many school councils provide programs and educational equipment and supplies, such as books, science, or sports equipment to a school,Footnote 76 or provide scholarships or bursaries to its students.
75. If the alumni association or school council intends to gift funds to an educational institution, the institution would have to be a registered charity or other qualified donee. Most provinces have legislation regulating school councils, and in some provinces school councils must operate under a school board that is a qualified donee. If the school is administered by a board that is a qualified donee, the funds may be paid to the board, which may choose to use the funds to benefit the school.
76. If the educational institution is not a registered charity or qualified donee, it may be possible for the alumni association or school council to transfer funds to it if a number of conditions are met.Footnote 77
77. Establishing a student union to further the educational purpose of an institution, such as a college or university, may be a charitable purpose.Footnote 78 However, organizations with a purpose to establish a student union often have difficulty conducting their activities without providing more-than-incidental private benefit to members. They may also provide social activities or other activitiesFootnote 79 that are in excess of what is charitable. For more information, see Policy statement CPS-024, Guidelines for registering a charity: Meeting the public benefit test.
Museums and libraries
78. Establishing and operating a museumFootnote 80 or libraryFootnote 81 that benefits the public, and establishing and operating a library that is connected with a school and benefits its students, may be purposes that advance education. However, a private library that is only open to members is unlikely to be charitable.Footnote 82
79. Establishing and operating a public museum or library may also be considered charitable under the fourth category of charity, other purposes beneficial to the community in a way the law regards as charitable.Footnote 83
E. Special topics
Production and broadcasting / publishing books, magazines or other materials
80. Producing and distributing in-depth news and public affairs programs is not a purpose that advances education regardless of whether the programs are distributed by publishing, broadcasting, cable, satellite, or Internet. Even if the programming meets the content criteria, it does not meet the process criteria. In particular, it does not meet the requirement for more than simply providing an opportunity for people to educate themselves.Footnote 84
81. In the same way, a purpose to produce and distribute (including by publishing or broadcasting) books, magazines, newspapers, films, or documentaries,Footnote 85 must meet both the content and process criteria to be considered to advance education.
82. Producing educational material may sometimes be a purpose that advances education. For example:
- producing structured textbooks may meet the content criteria, but does not generally meet the process criteria unless they are used as part of an educational program that includes teaching or learning
- producing films that are structured to teach particular topics may meet the content criteria, but does not generally meet the process criteria unless they are used as part of an educational program that includes teaching or learning
83. On the other hand, simply using written material in a classroom does not make the production of that material an educational purpose.Footnote 86 Even if the material meets the content criteria, the structured format component of the process criteria may not be met.
84. The courts have recognized “the special legal position in Canadian society” of Indigenous people. Providing radio and television programming relevant to Indigenous people, and providing information—including by a newspaper—to the Indigenous community, are charitable purposes under the fourth category.Footnote 87
85. To hold conferences can be a purpose that advances education.Footnote 88 The conferences must meet the content and process criteria. The public part of the public benefit test could be met by any of the following:
- inviting a sufficient section of the public to attend
- distributing conference materials to the public (such as by publishing on the Internet or in a journal)
- showing that participants will share the knowledge obtained at the conference with a sufficient section of the public
Vocational or professional education
86. Advancing education by providing vocational or professional training can be a charitable purpose.Footnote 89 The focus must be promoting knowledge or skills, not commercial interests. Any private benefit must remain incidental to achieving the charitable purpose.Footnote 90 The training could be to develop skills required for a particular type of employment or the more general “employability” skills needed to obtain and keep employment (for example, resumé writing, organization skills, or language training), and must meet the content and process criteria. Entrepreneurial training, such as how to prepare a business plan, obtain financing, and related skills, may also advance education.
87. If employment-related training is only provided to employees of a specific employer, it may result in unacceptable private benefit. For more information, see Guidance CG-014, Community economic development activities and charitable registration.
Providing information and education
89. However, an organization established to advance an education or other charitable purpose may provide information about its programs to the public or carry out other activities that provide information if the activities are an incidental way to further its charitable purpose.
90. Although all experience may loosely be considered educational,Footnote 92 in order to advance education under charity law, experiences, such as field trips, outings, and travel (such as student exchanges) must meet the content and process criteria. A field trip or outing that is connected with a formal education curriculum has been found to advance education under charity law.Footnote 93
91. The courts have also determined that simply providing an opportunity for people to educate themselves by making available tourist accommodation is not a charitable purpose,Footnote 94 despite the appellant’s claim that facilitating travel by providing low-cost accommodation in the form of a youth hostel advanced education.
Preschool and daycare programs
92. To advance education by providing a preschool or daycare program can be charitable if it meets the content and process criteria. However, providing child care alone is unlikely to meet these criteria.
93. Providing pre-school or daycare programs may also further a relief of poverty purpose if the beneficiaries are shown to be poor. If the programs further the relief of poverty, the education content and process criteria do not apply.
94. A purpose to advance education by providing a summer camp can be charitable. An organization must show that the focus of the camp is to educate, and that its educational activities meet the content and process criteria.
95. Social, recreational, or sports activities can themselves educate if they meet the content and process criteria. For example, a camp activity of teaching the basic elements of safe canoeing and water safety, and then practicing such techniques to reinforce them, could advance an educational purpose. Providing an organized canoe trip for youth that is designed for and focused on teaching skills such as teamwork and leadership, could also further a purpose that advances education.
96. Activities that do not themselves educate may be acceptable if they are an incidental way of furthering the educational purpose.
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