Charitable Purposes and Activities that Benefit Youth

Guidance

Reference number
CG-020

Issued
June 24, 2013

This guidance replaces CPS-015, Registration of Organizations Directed at Youth.

Table of contents


A. Introduction

1. The Canada Revenue Agency’s Charities Directorate registers charities under the Income Tax Act. It also ensures that registered charities continue to meet all associated legal and administrative requirements.

2. This guidance explains the Charities Directorate’s interpretation of the relevant common law (case law or court decisions) and legislation (the Act) to determine whether an organization established to benefit youth is eligible for registration as a charity under the Act.

3. Many organizations that have purposes and activities that benefit youth consider applying for registration as a charity. For information about this and other options, go to the webpage Is registration right for you?

4. In this guidance, unless otherwise stated, relevant terms and concepts are defined as follows:

“charity” and “registered charity” include all three types of registered charities as defined under the Act: charitable organizations, public foundations, and private foundations;

“organization” includes registered charities (charitable organizations, public foundations and private foundations), as well as applicants for registration;

“youth” means young people, without restriction to a specific age range, which will depend on the nature of the charitable purposes and activities in question. For example, activities for latch-key children benefit a different age group than activities for post-secondary school students; and

“at-risk youth” generally refers to youth who are in danger of not making a successful transition to healthy and productive adulthood as a consequence of a range of possible issues, including, but not restricted to, learning difficulties, socio-economic environment, social relationships, and family/school situations.

5. An organization must meet a number of general requirements to qualify for registration under the Act. For detailed information about registration requirements, see Guidance CG-017, General Requirements for Charitable Registration.

6. This guidance provides general information only. All decisions about specific organizations are made individually, applying the law to the facts in each case. The facts may come from the organization itself or from other information available to the Charities Directorate.

B. Purposes and activities that benefit youth

Purposes that benefit youth

7. The purposes [Footnote1] of an organization as contained in its governing documents are the objectives it is created to achieve. The activities of an organization are the ways in which it furthers these purposes. [Footnote 2]

8. To be registered as a charity under the Act, the law requires that an organization’s purposes:

  • be exclusively charitable—meaning that they fall within one of four broad categories of charity: relief of poverty (first category); advancement of education (second category); advancement of religion (third category); and certain other purposes beneficial to the community in a way the law regards as charitable (fourth category)—and provide a charitable benefit to the public, or a sufficient section of the public; and

  • define the scope of the organization’s activities. Subject to limited exceptions, all of the organization’s resources must be devoted to activities that further its stated charitable purposes.

9. While purposes in each of the four categories of charity described above can benefit youth, purposes that address or prevent specific problems faced by youth—such as juvenile delinquency, substance abuse, eating disorders, teen pregnancy, depression, family conflict, and suicide—can be charitable under the fourth category.

Public benefit

10. The public benefit requirement means that a purpose, generally through its activities, must deliver a tangible or objectively measurable, and socially useful, benefit to the public, or a sufficient segment of the public. [Footnote 3]

Eligible beneficiaries

11. Eligible beneficiaries are the members of the public who can potentially qualify to receive benefits from a purpose or from the activities that further a purpose. Different charitable purposes have different requirements about how eligible beneficiaries are defined. Sometimes, restricting eligible beneficiaries is justified, or even required, based on the nature of the purpose. Other times, benefits must be available to the public as a whole. This means that some purposes that benefit youth must be available to all youth, while other purposes can restrict benefits to particular youth. Below are examples under the first three categories:

  • relieving poverty by distributing school supplies to youth who are poor;

  • advancing education by operating a public school, subject to applicable geographic, age, religious, or gender restrictions; or

  • advancing a religious faith by operating a summer camp, restricted to youth of that faith.

12. Generally, fourth category purposes that benefit youth must be open to all youth. However, fourth category purposes that address or prevent specific problems faced by youth can be restricted to particular youth when the restriction is relevant to the purpose. For example:

  • promoting health by providing counselling for youth who have been victims of physical or sexual abuse;

  • preventing, and addressing problems of substance abuse by offering counselling, workshops, and opportunities for healthy recreation to youth at risk for, or demonstrating, such problems;

  • addressing youth unemployment by providing job skills training and employment assistance to youth who are shown to need assistance;

  • protecting susceptible youth from harm or victimization by operating after-school programs or facilities for runaways or battered youth;

  • promoting health by operating a mobile medical clinic for homeless youth;

  • addressing, or preventing the abuse of youth by providing counselling about coping with bullying or peer pressure (may or may not be restricted to particular youth);

  • promoting mental health and the prevention of youth suicide by operating a youth crisis call centre; or

  • addressing problems specific to aboriginal youth by providing outreach and intervention programs. [Footnote 4]

13. For more information on how to properly define eligible beneficiaries, see Policy Statement, CPS-024.

Activities - sufficient structure and focus

14. Generally, the public benefit from a charitable purpose should be a reasonably direct result of the purpose and of the activities that will be conducted to further it, and be reasonably achievable. [Footnote 5] Vague, general benefits to the public at large will be unlikely to deliver the necessary benefit. [Footnote 6] Also, the benefits of an incidental activity that does not further an organization’s purpose (such as an occasional social event held by a charity with a purpose to relieve poverty) will not satisfy the public benefit requirement. [Footnote 7]

15. To show that an activity can reasonably be expected to provide the necessary public benefit, substantive evidence of a causal connection is needed. In most cases, this means that an organization must show that an activity has sufficient structure and focus to actually address or prevent the specific problem faced by youth.

16. An organization established with a purpose of helping youth deal with identified problems, and that provides only recreational activities that are not structured and focused on addressing these problems, cannot qualify for registration. For example, simply keeping youth off the streets does not, in and of itself, further a charitable purpose. Without monitoring, teaching, or some sort of structure and focus, it will be difficult to establish that an activity is addressing or preventing identified problems.

17. Sufficient structure and focus can be shown in various ways, including:

  • the form of the activity itself (for example, structured group discussions, instructional workshops, or psychological counselling sessions);

  • the presence of interaction between qualified individuals and youth (for example, experienced adult supervisors that are available for counselling and/or listening, and that interact with youth); or

  • the roles and responsibilities of youth within an activity (for example, providing opportunities for youth to participate in supervisory or administrative capacities in a monitored environment).

18. When eligible beneficiaries of fourth category purposes are restricted to particular “at-risk” youth (those directly affected by, or experiencing, the identified issue or problem), other youth can also participate in the activities or programs by serving as role‑models, allies, and champions to attract at‑risk youth to those activities, and help provide charitable benefits as well as structure and engagement. However:

  • the focus of the activity must be to provide benefits to at-risk youth;

  • the participation of other youth must be shown to help provide benefits to at‑risk youth; and

  • any benefits provided to youth that are not at-risk (private benefit) must be incidental (reasonable, necessary, and proportionate) to those provided to at‑risk youth. For more information on private benefit, see Policy Statement, CPS-024.

19. Examples of activities that could further purposes that address or prevent specific problems faced by youth include:

  • mediating disputes between youth and their family members or others;

  • providing programs to prevent and resolve identified issues;

  • conducting counselling, workshops, and/or discussion groups on identified topics such as drug or alcohol abuse, depression, suicide, or eating disorders;

  • developing anger management skills;

  • counselling youth on how to cope with bullying or peer pressure;

  • providing safe, supervised facilities for youth who would otherwise be alone after school;

  • operating safe, supervised housing for runaways;

  • operating a block parent program;

  • offering programs to facilitate the reconciliation of runaways with their families;

  • helping youth to write resumes and prepare for job interviews; and

  • teaching life skills such as managing money. [Footnote 8]

C. Other topics

Advancement of education and youth

20. To further advancement of education purposes, information or training activities must be provided in a structured manner and for a genuinely educational purpose—that is, “to advance the knowledge or abilities of the recipients—and not solely to promote a particular point of view...”. [Footnote 9] The form of these activities requires an actual teaching or learning component. What is needed is a legitimate, targeted attempt at educating others, whether through formal or informal instruction, training, plans of self-study, or otherwise. 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.

21. The content of these activities can include traditional academic subjects or practical topics and skills, provided they can be characterized as “useful.” [Footnote 10]

22. Examples of educational activities include:

  • teaching youth to read and write;

  • teaching a second language;

  • teaching job seeking and job interview skills;

  • specific career or job skills training;

  • on-the-job training, such as co-op placements;

  • practical business training and experience (as part of a structured learning program); and

  • specialized training for youth with identified problems, barriers or challenges, such as learning disabilities or attention deficit disorders.

23. In the case of youth, activities that develop emotional and moral maturity, the ability to effectively interact with others, teamwork, co‑operation, good citizenship, and leadership skills will also be considered to be educational in most cases, provided the necessary form (an appropriately structured teaching or learning component) is present.

24. Examples of activities that may advance education include:

  • a guided visit to a historical building that includes a teaching or learning component (as opposed to simply arranging such a visit);

  • a guided outing (for example, to a museum, theatre, or zoo) that forms part of a scholastic activity;

  • supervised opportunities to learn appropriate social interaction skills; and

  • a sporting activity that is connected to formal education. [Footnote 11]

25. To a limited extent, ancillary and incidental activities that do not have a teaching or learning component are permitted, particularly if they form part of activities that do. [Footnote 12] An example would be field trips to reward young students for good behaviour in class.

Social or recreational activities

26. Social or recreational activities are only charitable if they directly further a charitable purpose. Therefore, an organization must show how its social activities provide a charitable benefit. [Footnote 13]

27. Generally, for social or recreational activities to further a charitable purpose, they must be structured in such a way that they provide a charitable benefit to youth. For example, activities such as youth dances, movie nights, concerts, and sporting events that are supervised by qualified, responsible individuals may further a charitable purpose if they are part of a structured and focused approach to dealing with identified issues that affect at-risk youth. Critical factors include the degree of supervision or interaction, and the degree to which the social activities actually further the charitable purposes of the organization.

28. On the other hand, issues such as delinquency or substance abuse will not necessarily or actively be addressed by simply offering opportunities or facilities where social or recreational activities might take place. By themselves, activities for youth such as operating coffee houses, hosting card games, providing video games, or organizing dance parties will unlikely further a charitable purpose.

29. While unstructured social or recreational activities can be offered to provide a constructive alternative to undesirable environments that contribute to youth problems, or to encourage youth to participate in other structured activities conducted by an organization, these unstructured activities are only permitted if they are ancillary and incidental [Footnote 14] to the organization’s charitable purposes.

Sports activities

30. The law does not recognize purposes that promote sport as charitable. [Footnote 15] However, some sports activities can further charitable purposes that benefit youth such as when they help build self-esteem, prevent addiction, or assist in the recovery from addiction.

31. Where an organization will further its charitable purpose through a sports activity, it must demonstrate that the activity is a structured and focused attempt to address an identified youth issue. Participation in sports alone is not enough. Substantive evidence of a causal connection between the activity and the delivery of the charitable benefit is needed. For example, when participation in sports activities is shown to be part of a structured program to prevent the delinquency of at-risk youth, the sports activities may directly further a charitable purpose. Therefore, it is not the inherent nature of a sports activity that determines whether it is charitable, but rather how that sports activity furthers a charitable purpose.

32. An organization would need an appropriate selection process that ensures that the at-risk youth identified in its purposes benefit from its sports activities. It is not necessary that only these youth participate, but the factors set out in paragraph 18 of this guidance apply.

33. In the same way, simply providing sports equipment or opportunities for youth to play sports is unlikely to directly further a charitable purpose, unless the program is restricted to providing equipment and registration fees to poor youth as an activity to further a relief of poverty purpose.

34. For more information, see Policy Statement CPS-027, Sports and Charitable Registration.

Drop-in centres

35. A drop-in centre can be operated to further a variety of charitable purposes. Each purpose could provide benefits to a different category of youth. For example:

  • addressing or preventing violent behaviour of at-risk youth by helping them develop anger management skills;

  • addressing or preventing drug addiction among youth by offering self‑help and peer support programs; and [Footnote 16]

  • protecting youth from harm by providing a latch-key program for children (specify a beneficiary group, such as children attending elementary school).

36. Drop-in centres must carry out structured and focused activities that are clearly directed toward addressing or preventing specific problems facing youth. Drop-in centres can also allow youth to help deliver activities or participate in decision-making processes (for example, serve as board or committee members, assist in maintaining facilities, and plan and carry out fundraising activities). They usually include counselling and/or life skills training, together with:

  • a safe environment that prohibits alcohol, drugs, weapons, or fighting on the premises;

  • adult supervision at all times to help direct activities, resolve conflicts, and deal with emergency situations. Some drop-in centres work with social workers, physicians, psychologists, conflict mediators, or other individuals who have experience working with youth; and

  • possible partnership or participation with the police, the courts, schools and other agencies that provide social services and assist youth.

37. To show that their activities are structured, focused, and clearly directed toward addressing or preventing specific problems facing youth, drop-in centres can use appropriate qualification criteria and screening processes to select individuals that will interact with youth.

Footnotes

[Footnote 1]

For more information, see Guidance CG-019, How to Draft Purposes for Charitable Registration.

[Footnote 2]

A charitable activity is one that directly furthers a charitable purpose. See Vancouver Society of Immigrant & Visible Minority Women v. Minister of National Revenue, [1999] 1 S.C.R. 10 (Vancouver Society) per Iacobucci J. at paragraph 154. 

[Footnote 3]

Where the benefit is not tangible, it must be demonstrated to be valuable or approved by “the common understanding of enlightened opinion for the time being.” For more information about public benefit, see Policy Statement CPS-024, Guidelines for Registering a Charity ‑ Meeting the Public Benefit Test .

[Footnote 4]

See Policy Statement CPS-012, Benefits to Aboriginal Peoples of Canada

[Footnote 5]

For more information, see Policy Statement CPS-024, and, for example, In re Grove-Grady, Plowden v. Lawrence, [1929] 1 Ch. 557 per Russell L.J. at p.588; National Anti-Vivisection Society v. I.R.C., [1947] 2 All ER 217,[1948] A.C. 31 (HL) per Lord Wright at p. 49; I.R.C. v. Oldham Training and Enterprise Council, [1996] B.T.C. 539; Hadaway v. Hadaway, [1954] 1 W.L.R. 16 (P.C.); Gilmour v. Coats et al, [1949] A.C. 426 (HL) per Lord Simonds at pp. 446-447.

[Footnote 6]

For more information, see Policy Statement CPS-024, and, for example, Oppenheim v. Tobacco Securities Trust Co Ltd., [1951] A.C. 297 per Lord Simonds at p.306; IRC v. Educational Grants Association Ltd., [1967] Ch 993; and Independent Schools Council v. Charity Commission for England and Wales; Attorney General v. Charity Commission for England and Wales and another, [2011] UKUT 421 (TCC) (Independent Schools).

[Footnote 7]

For more information, see Policy Statement CPS-024, and, for example, Commissioners of Inland Revenue v. Yorkshire Agricultural Society, [1928] 1 K.B. 611 per Atkin LJ at p. 631; and Independent Schools, supra note 5 at paragraphs 196-200.

[Footnote 8]

Teaching activities that further a fourth category purpose do not necessarily have to meet the same requirements for educational activities. However, these activities must be shown to deliver the required benefit, as explained in paragraphs 14 ‑ 19 of this guidance.

[Footnote 9]

Vancouver Society, supra note 1, per Iacobucci J. at paragraph 169.

[Footnote 10]

Vancouver Society, supra note 1, per Iacobucci J. at paragraphs 170 and 171.

[Footnote 11]

See Waters' Law of Trusts in Canada (2005) 3rd edition, on page 726, where it is noted: “physical health has long been recognized as a necessary complement of the mental well-being which education requires of its students.” See also IRC v. McMullen, [1981] A.C. 1 (H.L.); Re Mariette, [1915] 2 Ch. 284; Re Mellody, [1918] 1 Ch. 228; Kearins v. Kearins, [1957] S.R. (N.S.W.) 286; and CRA Guidance CPS-027, Sports and Charitable Registration.

[Footnote 12]

Vancouver Society, supra note 1, per Iacobucci J. at paragraph 167.

[Footnote 13]

Social activities for disabled youth are not subject to this guidance. Social activities that further purposes that assist disabled youth to integrate into society or provide social rehabilitation may qualify as charitable under the fourth category of charitable purposes by providing relief from conditions associated with disability.

[Footnote 14]

The CRA generally interprets ancillary and incidental to mean subordinate or secondary to, and supportive of, the charity’s purposes, and of relatively modest size.

[Footnote 15]

See A.Y.S.A. Amateur Youth Soccer Association v. Canada (Revenue Agency), 2007 SCC 42 per Rothstein J., for the majority, at paragraph 40: “The trend of the cases supports the proposition that sport, if ancillary to another recognized charitable purpose such as education, can be charitable, but not sport in itself.”

[Footnote 16] 

See Policy Statement CPS-016, Distinction Between Self-Help and Members' Groups

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