Can charities engage in research? CRA offers policy draft

Community Action, Feb 20, 2008

What research can charities engage in? The Canada Revenue Agency Charities Directorate offers a draft policy statement aimed at setting the legal and administrative requirements a registered charity is expected to fulfill, in order to conduct or fund research as a charitable activity.

The policy statement is intended to guide any organizations that have a charitable purpose, such as the promotion of health or the relief of poverty, and that carry out research as a way of furthering or achieving those purposes. It is also applicable to any registered charity set up to conduct research in the humanities, or social and natural science.

The draft policy statement indicates that research will be considered a charitable activity if:

* it is a reasonable way to achieve or further the organization's charitable purpose;

* the research is likely to uncover new knowledge;

* it is carried out for the public benefit that could arise from it and not primarily for self interest, or for mainly private commercial consumption; and

* the results are disseminated and made freely available to others who might want access to them.

An example of research that would be acceptable is an organization that is established to relieve poverty by providing food to the homeless and might further such a charitable purpose by researching whether the number of working people using the food-bank declines when the level of the minimum wage increases.

Examples of research that would not be acceptable would be:

* research that concerns the internal deployment of an organization's administrative, management or fundraising resources; or

* research on donation patterns of its donors simply to increase the amount of funds it raises annually.

"Such research is not charitable because it is conducted for an organization's internal advantage, rather than to directly bring about or further a charitable purpose."

However, the policy statement advises a registered charity may use a minor part of its resources for such research, deemed not acceptable as charitable activity, but a registered charity cannot use the amounts expended on such activities to meet its annual disbursement quota.

The policy document indicates the factors to be considered when a charity seeks to protect any intellectual property rights that might arise from its charitable research.

It also explores the private benefit issues that might occur when a charity collaborates with a private entity to fund or conduct research as a charitable activity.

www.cra-arc.gc.ca