Sunday, November 13, 2011

Canada Revenue inviting publishers to comment on charitable guidance document

The Canada Revenue Agency's charities directorate is inviting public comment on its proposed Guidance on Arts Organizations and Charitable Registration. The deadline for such comments is January 12, 2012.
This appears to be a genuine opportunity for arts and cultural magazine publishers and magazine organizations regionally and nationally to influence the way the charities directorate interprets the law as it relates to charitable registration in Canada. While it requires some work, the effort may (we say, may) be repaid with greater clarity.
The application and interpretation of the Income Tax Act and various related common law decisions over more than a century has often resulted in decisions that are opaque and infuriatingly arbitrary. 
One not-for-profit literary or cultural magazine might get charitable status while another, very similar, publication is denied, even though any sensible citizen would declare that both meet the requirements of being involved in "educational" activities of public benefit. (They are most certainly not in business for the money....) The ability to give charitable tax receipts to individual and corporate donors can make a significant difference to fundraising success.
From time to time, magazines or their foundations with existing charitable status even have to defend themselves from attempts to withdraw the status. And some magazines have had an expensive, multi-year struggle to achieve charitable registration.  The CRA has always maintained that every application is judged on its own merits and that none are precedents for others. The proposed guidelines may go some way towards better defining the rules, so the language and its interpretation is very important.
Part of the problem is that there is no specific rule book, no law of charity in this country and interpretations and rulings are made within the charities branch in what often a giant game of "Guess what we're thinking." The fact that a 21st century magazine can see its charitable status denied on the basis of an 1891 decision from Britain can cause considerable gnashing of teeth. 

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