Distinction between self-help and members' groups
September 7, 2000
This policy statement outlines the Directorate's policy concerning organizations that focus on "self-help," and clarifies the distinction between these and members' groups.
The courts have recognized as charitable organizations that provide education, therapy or rehabilitation to eligible clients. The Directorate recognizes these purposes can be achieved through peer support, and refers to such organizations as "self-help" groups. However, organizations that focus on advancing the interests of their members and not on the community at large, are considered non-charitable "members' groups."
1. This policy applies to the purposes and activities of applicant organizations and registered charities.
Differences between self-help groups and members' groups
2. Self-help groups routinely make their membership available to anyone in the community meeting the criteria of charitable need. For example, groups of persons with addiction problems, prisoners, single parents, persons with disabilities, or victims of crime. In some cases, membership will be broad enough to also include interested members of the public. If a fee is associated with the group, it is nominal.
3. Members' groups, on the other hand, are usually formed exclusively to further their own interests, and therefore lack the necessary element of altruism required to be charitable at law. Their direct benefits are tied primarily to membership and are available only to members. Some examples include professional associations, unions, hobby groups, co-operatives, tenants' or property-owners' associations, and in some cases, advocacy groups. Members' groups also frequently require a professional or similar qualification, and may charge a substantial membership fee.
Members' groups and the relief of poverty
4. Members' groups that are set up for the relief of poverty are potentially charitable. For example, in Re Clark's Trust,Footnote 1 a friendly society paid benefits to its members in "sickness, lameness or old age" in accordance with its constitution. The Court ruled that a friendly society was not a charitable institution, but appeared ready to accept a similar organization that required a member to also be poor as eligible to receive benefits.
Members' groups and organizations promoting a particular cause
5. Members' groups are not the same as organizations promoting a particular cause, which could potentially be recognized as charitable (for example, organizations that promote racial harmony, reduce family violence, or a particular ethnic group). Although both are composed of members who have a personal stake in the matter, organizations promoting a cause act on behalf of their membership as well as members of the community who could benefit – even non-members who remain unaffiliated with the organization.
Peer-support groups are a type of self-help group
6. It has long been recognized that peer-support groups help people cope with particular problems. For example, there are groups for persons with addictions, single parents, those with particular diseases, as well as for people with difficult socialization problems.ootnote 2
7. Peer support groups usually involve a number of people trying to overcome the same difficulty. An experienced counselor or a social worker will often lead sessions for participants to exchange views on their personal experiences and on how to cope with them. These sessions are sometimes coupled with a buddy-system approach, where a person undergoing a temporary crisis can rely on a friend at a particularly difficult time.
Self-help groups and social activities
8. Although informal surroundings could well lead to a more open or dynamic group, an organization providing only social activities would likely not have the necessary direction and focused activity to produce a charitable result.Footnote 3 Normally, it is expected that group meetings are called for the purpose of addressing problems, with specially trained people attending to provide guidance and support.
Can an organization be both a members' group and a self-help group?
9. In cases where an applicant is both a members' group and a self-help group, the applicant cannot qualify for registration as a charity, because it must be constituted and operated exclusively for charitable purposes. However, indirect benefit to an organization's members does not automatically disqualify the organization from registration.
- Re Mead,  I W.L.R. 1244
- Re Hobourn Aero Components, Ltd.'s Air-Raid Distress Fund, Ryan v. Forrest,  Ch. 194
- I.R.Comrs. v. Falkirk Temperance Café Trust (1926), 136 L.T. 27; 1927 S.C. 261; 28 (I) Digest (Reissue) 479
- General Medical Council v. IRC (1928), 97 L.J.K.B. 578
- M. Chesterman, Charities, Trusts and Social Welfare, London: Weidenfeld and Nicolson, 1979, pp. 175 ff
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