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CRA has released a new Guidance, CG-020, that sets out the Charities Directorate’s position on when an organization that is established to benefit youth will qualify for registration. Registered charities that provide services for youth, as well as organizations that may be considering seeking registration, should review the Guidance carefully as it clarifies the Charities Directorate’s current views on several important issues.
The Guidance confirms that the concept of “youth” is not tied to a particular age range and refers only to “young people”. The nature of an organization’s activities will determine the specific age range that is relevant for the purposes of determining that organization’s charitable status. As an example, CRA contrasts an organization that provides services to latch-key children and an organization that provides services to post-secondary students. The age group served by these organizations will differ, but both can potentially qualify for charitable registration as organizations benefitting youth.
As with all registered charities, organizations benefitting youth must have exclusively charitable purposes. CRA notes that purposes that address specific problems associated with youth – such as juvenile delinquency, substance abuse, eating disorders, teen pregnancy, depression, family conflict, and suicide – can be charitable under the fourth head of charity: purposes beneficial to the community in a way the law regards as charitable. Much of the commentary in the Guidance focuses on services intended to address these issues.
In order to qualify for registration, an organization must meet the “public benefit test” and be able to demonstrate that its purposes and activities deliver a tangible social benefit to the public or a sufficient segment of it. The Guidance discusses the concept of “eligible beneficiaries” and the extent to which a charity can restrict who may benefit from its programs. CRA notes that, in general, an organization that is established to benefit youth must make its services available to all youth and not restrict its services to sub-sets of this group, unless the restriction is related to the charitable purpose. CRA provides a list of examples of charitable youth services that are restricted to certain youth. These examples include:
- mental and physical health services and counselling to youth with specific issues (e.g., victims of abuse, youth with substance abuse issues, homeless youth);
- job training and employment assistance services to youth who are shown to need assistance; and
- services addressing problems specific to aboriginal youth.
The Guidance emphasizes that an organization’s programs must have sufficient structure and focus to address, with measurable evidence of success, specific problems faced by youth. The organization must be able to show a causal connection between the activity and the achievement of the charitable purpose. CRA states that evidence of such structure and focus can shown in many ways, including by the nature of the activity itself, the presence of interaction between youth and qualified personnel (e.g., adult counsellors, etc), and roles and responsibilities given to the youth participating in the activities. Throughout the Guidance, CRA endeavours to distinguish between activities that merely provide opportunities for youth to get off the streets without any further structure (for example, by providing coffee houses, arcades, etc.) and activities that incorporate structured programming designed to address specific issues (e.g. structured discussions, counselling). CRA states that only the latter will qualify as charitable. While the line between these two types of activities is difficult to draw in many cases, it is clear that evidence of specific program planning and structured, charity-led activities aimed at addressing specific youth issues will be important in satisfying CRA that a program has sufficient structure to qualify as charitable. The Guidance (at paragraph 19) provides a number of examples of programs that, in its view, meet this requirement.
The Guidance also discusses several specific topics and the criteria by which certain specific types of youth programs and activities will be evaluated. These include educational programs, social and recreational programs, sports programs, and the operation of drop-in centres. In general, CRA emphasizes the need to demonstrate the causal connection between the program and a specific charitable benefit.
In general, the Guidance is thorough and helpful in clarifying the Charities Directorate’s interpretation of the law in this area. Youth organizations should review it carefully and consider these factors when planning and implementing activities.