Canada Customs Agence des douanes

and Revenue Agency et du revenue du Canada

Your file

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3014329

Shiv Datt Talwar

President

Spiritual Heritage Education Network Inc.

408 Tamarack Drive

Waterloo, ON

N21, 4G6

April 19, 2002

Dear Sir:

Subject: Spiritual Heritage Education Network Inc.

Reference is made to the Application for Registration (form T2050) filed on behalf of the above-noted organization for the purpose of registration as a charity under the Income Tax Act.

We have now had the opportunity to examine the material submitted in support of the above-noted application and it is our opinion, based upon a review of the applicable jurisprudence including the statutory provisions of the Income Tax Act and the common law, that it is unlikely that Spiritual Heritage Education Network Inc. (hereinafter referred to as "SHEN") will qualify for registration.

The Income Tax Act provides that in order to qualify for registration, a charitable foundation must be constituted and operated exclusively for charitable purposes and a charitable organization must devote all its resources to its own charitable activities. The term "charitable" is not defined in the Act. As such, it is necessary to refer to the principles of the common law that have been enunciated by the courts in order to determine whether a particular purpose or activity is charitable.

The courts have not defined the term "charitable " so as to encompass any and all purposes that may contain an element of public benefit. Rather, it has been held that for a purpose to be considered charitable at law it must fall within at least one of the four following categories or headings: 1) the relief of poverty, 2) the advancement of education, 3) the advancement of religion and, 4) other purposes beneficial to the community as a whole in a way which the law regards as charitable. Activities or programs that are considered charitable under the 4th heading of charity are derived from previously decided cases. In qualifying a particular purpose or activity as "beneficial to the community", we must be able to draw analogy to precedents that have specifically recognized similar purposes or activities as charitable.

The objects for which SHEN has been incorporated and the means by which it intends to achieve these objects are contained in paragraph 4 of its letters patent. In brief, the stated goal of the organization appears to be to provide education with respect to spiritual heritage and to achieve this goal, in large part, through the use of the Internet to disseminate information with regard to this topic. You will appreciate that the definition of education and the manner by which education may be imparted has a particular and restricted meaning within the law of charities. It is narrower than what may be the layman's perception and is rooted in the jurisprudence developed over the years by the courts. The term "Spiritual Heritage" is not specifically defined in SHEN's letters patent, however, the mission statement provided in Enclosure C of your documentation, contains the following:

"The mission of the proposed Spiritual Education Network is to provide easy access to the thinking and finding of people who have spent their lives studying the nature of humankind and its relationships in the universe. The motivation behind the mission is to assist humankind in realizing its full potential by understanding and living by spiritual principles discovered by such people.

People, who have realized such spirituality, as envisioned herein, agree about its fundamental nature. They declare that the immanent self is the same as, or at least akin to, the Universal Principle. They also say that the innermost desire of everyone is to personally discover this Truth. Once such spirituality is experienced, one recognizes the Ultimate Truth in all things and feels a sense of self in everything. This recognition has the potential of helping human beings become better by observing the ethic of unity of all creation. Such spiritual discoveries comprise a human heritage worth preserving and promoting. They are the source of all ethic and peoples' only hope toward realizing true understanding, peace, equanimity, justice, and harmony."

The above mission or objective goes beyond what is permissible within the parameters of charitable education as it is inherently a promotion of a particular view of the world and an attempt to influence individuals to conduct their lives and affairs pursuant to certain principals.

Within the common law applicable to charities, a purpose would be defined as "political" where it is intended: 1) to further the aims of a recognized political party; 2) to promote the spread of general political doctrine; 3) to persuade the public to adopt a particular attitude of mind towards some broad social issue, such as community relations or international peace; or 4) to attempt to influence changes in the law or government policy. It appears that SHEN is undertaking its education with a view to persuading the public to adopt a particular attitude of mind with regard to the ethical standards by which to conduct one's life and affairs. Such purposes would be considered political and thus non-charitable.

We would add that even if SHEN's objects were to be considered charitable, to be considered as advancing education in the charitable sense, it would be insufficient for SHEN to merely disseminate materials over the Internet. In particular, the courts have held that in order for an organization to qualify as charitable under the category of advancement of education it must engage in activities targeted at educating others, simply providing an opportunity for people to educate themselves by making available materials, such as books, videos, and newsletters, with which this might be accomplished but need not be, is insufficient for the activity to be regarded as charitable within the accepted legal definition of charitable under the category, of the advancement of education. The mere dissemination of information over the Internet would thus also be unlikely to meet the requirements of the advancement of education in the charitable sense.

For these reasons, therefore, and based upon the material you have supplied, it is unlikely that SHEN can be registered as a charity. If, however, you do not agree with our interpretation, you have an opportunity to respond, addressing all of the above-mentioned concerns, and explaining how SHEN's purposes and activities are charitable at common law. In that case, you should write to us within 60 days of the date of this letter. If the Canada Customs and Revenue Agency's further review is unfavourable, you have the right to appeal to the Federal Court of Appeal pursuant to sections 172(3) and 180 of the Income Tax Act.

If we do not receive a response within the required time, the Department will then base its decision on the reasoning set out above, and the file may be closed accordingly without further contact from the Division.

SHEN might qualify for exemption from tax as a non-profit organization under paragraph 149(l)(1) of the Act. Determination of such status is the responsibility of the Canada Customs and Revenue Agency's Tax Services Office. The enclosed Interpretation Bulletin explains the requirements for non-profit organizations. If needed, further clarification in this respect may be obtained from the Kitchener/Waterloo Tax Services Office, located at 166 Frederick Street, Kitchener, ON N2G 4N1, or from the CCRA's Business Enquiries and Registrations' toll-free number, 1-800-959-5525. You may also consult CCRA's web site, www.ccra-adrc.gc.ca. We would stress, however, that such recognition does not convey authority to issue official donation receipts for income tax purposes.

We wish to assure you that we are not judging the worthiness of SHEN's activities or goals. Our determination is based upon the legal definition of what is "charitable", a definition which does not necessarily correspond with the popular understanding of the term.

While, we are unable to approve your application, we trust the foregoing fully explains our position.

Yours sincerely,

--Signed--

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Charities Directorate

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