Promotion of volunteerism

Policy statement

Reference number
CPS-025

Effective date
May 1, 2008

Purpose

This policy statement outlines the Charities Directorate's policy on organizations that promote volunteerism.

Statement

Promoting volunteerism in the community-at-large can be considered a charitable purpose.

Implementation

An organization may be registered as a charity if its purpose is to promote volunteerism in the community-at-large through broad-based activities.

Promoting volunteerism is analogous to several charitable purposes, and the analogies are strengthened by a number of other factors.

Common law

1. In the Law and Practice Relating to Charities, Hubert Picarda states that:

"The principle that a trust to foster good citizenship is charitable now appears to be well established."^{ootnote 1}

This statement was based, in part, on the decision in Re Webber,^{Footnote 2} which found that a Boy Scouts Association, whose purpose was to instruct "boys of all classes in the principles of discipline, loyalty and good citizenship," was charitable.

2. It has been suggested that volunteerism is evidence of good citizenship.^{Footnote 3} This idea has been reinforced by social research that found that volunteerism is critical to building social cohesion, which in turn fosters generosity, reciprocity, and ultimately results in more altruistic acts.^{ootnote 4}

3. The voluntary sector is the third major sector of activity in Canada (the other two major sectors are the public and private sectors).^{Footnote 5} Given the scope of the voluntary sector and volunteer activity in Canada,^{Footnote 6} promoting volunteerism generally is comparable to promoting industry, trade, and commerce for the benefit of the community-at-large. Efforts to promote industry, commerce, agriculture, horticulture, and craftsmanship^{Footnote 7} have each been held charitable where the organization's mandate was directed to providing a benefit to the public by enhancing the particular activity (for example, in terms of providing for greater efficiency and higher standards).

4. Promoting volunteerism is also in keeping with the general intent of other charitable purposes that benefit the community-at-large, such as gifts for the benefit of a locality,^{Footnote 8} gifts for the improvement of a city,^{Footnote 9} beautification and advancement of a township,^{Footnote 10} and providing municipal infrastructure such as bridges, ports, causeways, and highways.

General

5. In the United Kingdom, the Charity Commissioners have registered a number of volunteer organizations.^{Footnote 11} The Internal Revenue Service in the United States has given some verbal indication that they view such organizations favourably.

6. As noted above, volunteerism is significant in Canada, and in the last decade, government recognition has been increasingly apparent. In 2000, the federal government demonstrated its commitment to the voluntary sector by launching a $95 million voluntary sector initiative (VSI). In Budget 2004, the federal government continued its support by providing $6 million over two years to advance VSI by strengthening the sector's capacity to collaborate and innovate. The Department of Canadian Heritage supports volunteerism generally, and the United Nations declared 2001 as the "International Year of the Volunteer." Recipients of the Order of Canada have included citizens committed to their communities, and upon becoming Governor General, the Right Honourable Romeo Leblanc created a specific award—The Governor General's Caring Canadian Award—to recognize volunteers, "those who give so much to their fellow citizens, and whose compassion and charity are part of the Canadian character." The presence of government support or commitment does not in itself qualify an organization as a charity, but significant, broad-based government support for a number of years is a positive indicator of potential public benefit.

Policy guidelines

7. An applicant constituted for the purpose of promoting volunteerism in the community-at-large through broad-based activities (as described below), may be eligible for registration. To be registered under this policy, the applicant has to satisfy the following criteria:

a. Its formal purposes must clearly state that it is promoting volunteerism generally for the benefit of the community-at-large (for example, the applicant is created to benefit the community by providing and strengthening volunteerism in the community-at-large). Acceptable wording might be:

to encourage Canadians to volunteer
to improve the capacity of organizations to involve volunteers
to increase the public's awareness and support for voluntarism and the voluntary sector
to promote public participation with volunteer and community organizations with an aim to foster good citizenship and encourage healthy communities
to provide courses, seminars, workshops, and other educational programs of use to volunteers

b. It must accomplish its purpose through broad-based activities, which may or may not be set out in the purposes. Broad-based activities means a range of activities of interest generally to volunteers and the community-at-large, and should not be limited merely to funding. Types of activities include:

increasing public awareness and support for volunteerism through, for example, news releases and community newsletters
encouraging residents to volunteer in the social development and social services of their community
providing a means and method for recruiting and referring volunteers
providing a community information resource on volunteering

The applicant may also provide training, but the training should be of general interest to volunteers-at-large, such as a board member development program that helps potential volunteers understand the duties and responsibilities of serving on a board, as opposed to training that is more specific like sport coaching. It is expected that successful applicants will have a number of activities and will not, for example, only provide a referral service. Further, the simple recruitment and/or involvement of volunteers in the implementation of an organization's own charitable programs, although generally an acceptable activity, is not considered promoting volunteerism.

c. The applicant has to clearly promote volunteerism to the community-at-large through broad-based activities. It cannot support only one organization or one particular type of organization that reflects a single interest, unless the beneficiaries are registered charities or otherwise qualified donees. For example, an organization that promotes volunteer support for public hospitals is not promoting volunteerism generally, but it could otherwise qualify for registration. On the other hand, an organization that promotes volunteerism primarily in community sports programs, such as minor hockey or soccer, could not be registered under this policy because promoting sports is not charitable at law.

d. The applicant can provide services only to qualified donees and non-profit organizations as described in paragraph 149(1)(l) of the Income Tax Act. The applicant's objects do not have to state this restriction—but if they do not, the CRA will make sure that the applicant understands the limitation, and the registration letter will specifically outline the restriction. While it is not absolutely necessary for CRA officers to establish that the beneficiaries are in fact non-profit organizations, the CRA officer will review the list of beneficiaries or potential beneficiaries to determine whether these include for profit groups. For example, the officer can expect to see amateur sports groups, youth organizations, theatre or choral societies but not local businesses or business associations. The applicant must have a mechanism in place that demonstrates it is exercising due diligence in ascertaining that beneficiaries are non-profit organizations. If the organization provides services to political parties or their affiliates, they cannot be provided in a manner that supports or opposes a political party or candidate for political office and must be equally available to all political parties.

e. If the applicant funds any organizations, these must be qualified donees.

Footnotes

Footnote 1

H. Picarda, The Law and Practice Relating to Charities, London: Butterworths, 1995, p.137

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Footnote 2

Re Webber [1954] 1 WLR 1500

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Footnote 3

See the Charity Commission publication RR13, The promotion of the Voluntary Sector for the Benefit of the Public, at A8 on their website.

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Footnote 4

R. Putnam, Bowling Alone, Simon & Schuster, 2000

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Footnote 5

Strengthening Canada's Charitable Sector: Regulatory Reform: Final Report of the Voluntary Sector Initiative Joint Regulatory Table, March 2003.

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Footnote 6

With $90 billion in annual revenues and $109 billion in assets, the charitable sector is comparable in size to the entire economy of British Colombia. As a whole, the sector accounts for one-eighth of Canada's Gross Domestic Product. The sector employs 1.3 million Canadians (roughly 9% of the country's labour force) and pays over $40 billion annually in salaries and benefits. In 1997, over 1.1 billion hours of volunteer work was performed by 7.5 million Canadians (31.4% of the population) through an organization. This represents an increase of 40% in the absolute number of volunteers since 1987 (compared to a 20% increase in the population). Source: Building on Strength: Improving Governance and Accountability in Canada's Voluntary Sector, Final Report of the Panel on Accountability and Governance in the Voluntary Sector, February 1999.

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Footnote 7

Crystal Palace Trustees v. Minister of Town and Country Planning [1951] Ch. 132 (industry and commerce); Yorkshire Agricultural Society v. IRC [1928] I K.B. 611; Brisbane City Council v. Att.-Gen. For Queensland [1978] 3 AII E.R. 30 (P.C.) (agriculture); Re Pleasants (1923) 39 T.L.R. 675 (horticulture); Annual Report of the Charity Commissioners for 1973, paras 71-5 (craftsmanship.)

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Footnote 8