Related business (there are 2 types)
- Directly advances the goals of the charity: Linked to charity’s purpose and subordinate to that purpose (not a purpose in its own right
- Run substantially by volunteers (90%) – No link to purposes required
**Foundations – no business activities allowed
What is business?
- Deriving revenue from providing goods and services
- Activities undertaken with “intent to profit”
Not considered a business:
- Soliciting donations
- Selling donated goods
- Fees in context of charitable programs – e.g.. low-income housing rent, university tuition, museum admissions
Indicators that not a business activity:
- Attached fees designed to defray costs
- Services not comparable to marketplace offerings
- Fees set according to charitable objective, not marketplace
- Fundraising events- start and end point, not continuous, does not occur with regularity and frequency
Carrying on a business: Continuous or regular operation.
- Recognition re: changes in the range of economic development activities conducted by registered charities
- Particular focus in the Guidance is “program related investments”. PRIs, broadly speaking, are investments (as opposed to outright grants or expenditures) that directly further an organization’s charitable purpose.
What is a related business? (CRA Policy CPS-019). This policy statement outlines the Directorate’s policy for determining whether an applicant organization or an existing registered charity is carrying on an acceptable business (a “related” one) or an unacceptable business (an “unrelated” one).