National Arts Service Organizations

By: Joel Sector

Introduction

An arts organization that meets specific conditions is eligible to apply to the Department of Canadian Heritage to be designated as a National Arts Service Organization (a ?NASO?), and subsequently to the Canada Revenue Agency, Charities Directorate, for status as a Registered National Arts Service Organization (a ?RNASO?) under the Income Tax Act (the ?Act?). This designation was designed to assist arts service organizations in raising funds from the private sector and was added to the Act in 1991. While the legislative requirements for registered charities and RNASOs are distinct, both enjoy the same tax treatment.

What are they?

There are very specific requirements that need to be met to qualify for RNASO status. In order to qualify, organizations must have as their exclusive purpose and function the promotion of the arts on a nation-wide basis. Nation-wide is typically determined by a large membership, meaning the organization must have members from several provinces and must carry out its activities in at least several provinces. The specific sector(s) of the arts that membership must be drawn from are theatre, photography, dance, sculpture, crafts, design, drawing, sound recording, music, opera, painting, film/video and literary arts. Organizations must qualify as not-for-profits under the Act, operate in one or both of the official languages of Canada and the Board must not qualify as a private foundation.

What they do?

Arts organizations and arts service organizations are not one in the same. The difference is that the former produce works - such as plays, operas and ballets, whereas the latter do serve to promote the arts. Specifically, the activities of a RNASO are confined to one or more of the following:

a) promoting one or more art forms;

b) conducting research into one or more art forms;

c) sponsoring art exhibitions or performances;

d) representing interests of the arts community or a sector thereof (but not of individuals) before legal or governing bodies;

e) Conducting workshops, seminars, training programmes and similar development programmes relating to the arts for members of the organization where such activity results in members including the value of the programme in income under paragraph 56(1)(a) of the Act;

f) educating the public about the sector represented by the organization;

g) organising and sponsoring conventions, conferences, competitions and special events relating to the sector represented by the organization;

h) conducting arts studies and surveys of interest to members of the organization relating to the sector represented by the organization;

i) acting as an information centre by maintaining resource libraries and databases relating to the sector represented by the organization;

j) disseminating information relating to the sector represented by the organization; and

k) paying amounts to which paragraph 56(1)(n) of the Act applies in respect of the recipient and which relates to the sector represented by the organization.

Finally, an organization cannot be a registered charity and a RNASO at the same time. A registered charity can apply for RNASO status by submitting a letter with its application requesting revocation of its charitable status should it meet the requirements of a RNASO.

What are the benefits?

Many arts service organizations do not qualify for registered charity status. RNASO allows these groups the same tax privileges as charities registered under the Act. These include the issuing of tax receipts, an exemption from income tax under the Act and other benefits under other acts. These privileges provide an invaluable means of financial support to qualifying applicants.

Recognition Process

The application for designation as a NASO and RNASO is the same and available on the Canadian Heritage website (www.pch.gc.ca). The completed application should be forwarded to the Department of Canadian Heritage, Arts Policy Branch, 15 Eddy Street, 3rd Floor, Gatineau, Quebec K1A 0M5. A refusal by the Department of Canadian Heritage to designate an organization as a NASO is not subject to appeal under the Act (although an organization could invoke judicial review in such a circumstance). In the case where an organization is designated a NASO but CRA decides not to register it, the organization may appeal the refusal to register by filing a Notice of Appeal with the Federal Court of Appeal.