As the school year draws to a close, you may be thinking about sending your children to camp this summer. Many religious organizations operate summer camps, which usually include some sporting activities. A recent policy statement from Canada Revenue Agency (CRA) provides some indication as to whether or not these sporting activities will be considered “charitable” at law.
Generally speaking, in order for an organization (including an organization that operates a summer camp) to qualify for charitable status, all of its purposes must be charitable at law and it must be established for the benefit of the public. Specifically, the purposes of the organization must fall into one or more of the following four categories:
- Relief of poverty;
- Advancement of education;
- Advancement of religion; or
- Other purposes beneficial to the community and that are considered charitable at law.
Previously, the Supreme Court of Canada held that “the promotion of amateur sports involving the pursuit of fitness” did not fall under the vaguely defined fourth category of being a purpose beneficial to the community.
The recent CRA policy statement, however, states that “when a recognized charitable purpose is furthered through activities that include sport, or where sport is an incidental and ancillary activity only, [an] organization can potentially qualify for charitable status.” What this means is that the sporting activities must directly further an organization’s work of relieving poverty, advancing eduction, advancing religion or fulfilling a purpose that is beneficial to the community. Alternatively, the sporting activities may be ancillary and incidental to the main purpose, which means that “only a very small portion of the organization’s total resources (personnel, funds, and property) are devoted to the sport activities in question.”
In the policy, CRA gives specific examples of sporting activities that may qualify as furthering a recognized charitable purpose for each of the four categories of charitable purposes. For example, summer camps having a sports component and operated for low-income participants could potentially qualify under the relief of poverty category. Additionally, sports as part of an educational program, such as a school curriculum or even groups like Guides or Scouts, can qualify under the advancement of education category. Under the fourth category, purposes beneficial to the community, sporting activities as part of a youth program for building self-esteem or used for therapy or rehabilitation purposes, such as therapeutic horseback riding programs for people with disabilities, could also be acceptable.
With respect to the advancement of religion, the Policy points out that religious organizations sometimes carry out sport activities that are ancillary and incidental to their charitable purpose of advancing religion. That is, a religious summer camp may offer some sport activities in addition to the main activity of religious instruction. For these organizations, CRA warns that, “it must be clear that the sport element has not become a collateral non-charitable purpose.”
But how do sporting activities become a “collateral non-charitable purpose” for religious organizations? They become a collateral non-charitable purpose when:
- They do not directly further an organization’s spiritual teachings; an
- They use more than a very small portion of the organization’s personnel, funds, and property.
So must religious summer camps suddenly stop playing soccer and other sports? Not necessarily. There is an argument to be made that teaching children how to play sports is an opportunity to teach them that sports and competition are gifts from God and examples of His creation at work. Furthermore, a full understanding of Christianity recognizes that the Christian faith ought to apply to every area of one’s life, including sports. Responding to these gifts with praise and thanksgiving and recognizing God’s sovereignty over all things, including sports, are valuable lessons to learn. Teaching them to children is really a lesson in living as Christians.
Given that the courts have previously defined the advancement of religion as not only the promotion of the spiritual teachings of the religious body concerned but also “the maintenance of the spirit of the doctrines and observances upon which [they] rest”, it is not hard to see how teaching these lessons could be considered as furthering the advancement of religion.
So how does this affect your decision to send your children to summer camp? It probably doesn’t. You will not get a charitable receipt for the camp fees since you and your children are receiving a benefit.
However, it will affect those who run summer camps, particularly if they are,or want to be, a registered charity that is able to offer charitable receipts for their fundraising activities. For these organizations, since the promotion of sports per se is not a charitable purpose, they need to make sure that any sporting activities are used to further, or are merely ancillary and incidental to, a recognized charitable purpose.
This article was written by Ian C. Moes, a lawyer who practices in charity law at the law firm of Kuhn LLP. It is only intended as a guide and cannot cover every situation. It is important to get legal advice for specific situations. If you have questions or comments about this case or other charity law matters, please contact us at 604-864-8877.