CRA Releases Guidance on Arts Activities and Charitable Registration

December 29, 2012 | Andrew Valentine

On December 14, 2012, CRA released Guidance
Arts Activities and Charitable
.  The Guidance replaces
CRA’s former published policy statements on arts and charitable registration,
which were quite limited in scope.  The
Guidance provides a thorough summary of CRA’s positions on how organizations
conducting and supporting arts activities can obtain and maintain charitable

We reported previously
in this Newsletter on a draft version of CG-018 that was released in November
2011.  The final Guidance has not been
changed significantly from the draft version released in November.

The Guidance confirms that there are three
broad categories of activities related to the arts that may qualify as
charitable purposes under one or more of the four heads of charity.  These are:

  • teaching or training artists,
    art students, or the public through structured activities (which may be
    charitable as advancement of education);
  • exhibiting, presenting, or
    performing artistic works (which may be charitable under the fourth head of
    charity – advancing the public’s appreciation of the arts); and
  • activities that enhance an art
    form or style within the arts industry for the benefit of the public (which may
    also be charitable under the fourth head of charity – promoting commerce or
    industry of the arts).

The Guidance states that in order to be
found charitable under the fourth head of charity – which includes activities
that advance the public’s appreciation of the arts, as well as activities that
promote commerce or the arts industry – it will be necessary to satisfy two
criteria: (i) art form and style and
(ii) artistic merit.  These criteria are intended to ensure that
the artistic works being presented and/or promoted fall into recognized categories
of art forms and styles – e.g., “jazz music”, with “music” constituting the art
form and “jazz” constituting the style – and meet a minimum standard of quality
so as to be considered to deliver a charitable benefit.

The Guidance elaborates on the tests that
CRA will apply in determining whether these criteria are met.  With respect to art form and style, CRA
states that an organization must demonstrate common or widespread acceptance of
both the form and style of art within the Canadian arts community.  Appendix C to the Guidance sets out art forms
and styles that will be presumed to have common and widespread acceptance,
without further evidence.  For new art
forms or styles, organizations are expected to provide enough information to
enable the CRA to assess whether they have received common and widespread
acceptance.  Evidence that will support
the common or widespread acceptance of an art form/style includes:

  • the art form and style is
    taught at accredited Canadian institutions of higher learning;
  • the art form and style is
    recognized by a national or provincial/territorial arts body in Canada; and
  • the art form and style is
    recognized in established Canadian academic arts journals or arts publications.

To demonstrate that an artistic work has
artistic merit, organizations must meet an objective test to demonstrate the
quality of the work.  In addition to
providing a detailed description of the artistic work, organizations will need
to demonstrate that the work was selected for exhibition or promotion through
an open, unbiased selection process and that the work has been reviewed or
vetted by independent sources (mainstream media sources, arts publications,
etc) and/or that the artist has established artistic training and

The Guidance also discusses the issue of
private benefit, noting that charitable arts organizations must operate to
provide a public benefit to the broad community and not to support the careers
of specific artists.  Any private
benefits that arise from an organization’s activities must be incidental only.

CRA also addresses the criteria applied to
the charitable registration of arts councils, which typically exist to promote
public participation in the arts, as well as museums, art galleries and
performance venues.  The criteria applied
to these organizations are consistent with those discussed above.

Arts organizations that have charitable
registration, or are considering whether to seek charitable registration,
should consult the Guidance carefully. 
Miller Thomson’s Charities and Not-for-Profit lawyers have worked with
charitable arts organizations and can provide advice and assistance with
obtaining and maintaining charitable registration.


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