CRA has releasted its guidance on “Arts Activities and Charitable Registration Guidance” (CG-018). CRA had conducted an earlier consultation on arts and charity registration and this is the final version.
Here is a summary
“Arts Activities and Charitable Registration Guidance
Reference number CG-018
Issued December 14, 2012
This guidance replaces Summary Policy CSP-A08, Arts, and Summary Policy CSP-A24, Artists.
Organizations that carry out arts activities may be eligible for charitable registration under the Income Tax Act if all their activities further charitable purposes.
Teaching or training artists, art students, or the public through sufficiently structured activities may further a charitable purpose under the second category of charitable purposes—the advancement of education.
Exhibiting, presenting, or performing artistic works are activities that may further a charitable purpose under the fourth category of charitable purposes—advancing the public’s appreciation of the arts.
Activities that enhance an art form and style within the arts industry for the benefit of the public may further a charitable purpose under the fourth category of charitable purposes—promoting the commerce or industry of the arts.
Activities that further the fourth category charitable purpose of advancing the public’s appreciation of the arts must satisfy two criteria: art form and style and artistic merit.
Art form and style: Art form means the field or medium in which an artist works, while style means the different disciplines or methods of expression within an art form. To meet the art form and style criterion, an organization must show a common or widespread acceptance of the form and style of art within the Canadian arts community.
Artistic merit: Artistic merit means the quality of an artistic exhibition, presentation, or performance. Once an organization has established common or widespread acceptance of an art form and style, it must be able to show that the quality of its exhibitions, presentations, or performances is sufficiently high to be considered charitable under common law.
Activities that further the fourth category charitable purpose of promoting the commerce or industry of the arts must satisfy the art form and style criterion and may need to satisfy the artistic merit criterion depending on the particular facts.
To be charitable, arts activities must be undertaken in a way that ensures that any resulting private benefit is incidental, meaning that it is necessary, reasonable, and not disproportionate to the public benefit that is delivered. If a private benefit is more than incidental, an organization can face sanctions or have its charitable registration revoked.
Appendix A provides a summary of the key characteristics of the main charitable purposes that can be furthered through the arts.
Appendix B gives examples of purposes that can be furthered through the arts.
Appendix C contains a list of art forms and styles that are commonly recognized in relation to fourth category purposes. These art forms and styles will usually be accepted as satisfying the art form and style criterion without more information. The artistic merit criterion may have to be satisfied, depending on the particular facts.”
Here is the link to the full document: http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cgd/rts-ctvts-eng.html
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.