Opinion ID: 2074724
Heading Depth: 2
Heading Rank: 1

Heading: Organizational Qualification

Text: [¶ 26] Organizational qualification for a charitable exemption is dependent on fact-finding demonstrating that: (1) the organization's stated purpose is charitable within the meaning of the law; (2) the organization is in fact organized and using its property in good faith for its stated purpose; (3) there is no pretense to avoid taxation; (4) there is no profit motive in the organization's activity; and (5) any production of revenue is purely incidental to a dominant purpose which is benevolent and charitable. Poland Spring Health Inst., 649 A.2d at 1100; Green Acre, 150 Me. at 354, 110 A.2d at 584. [¶ 27] The Town cannot seriously dispute CFRC's organizational qualification for the exemption. The record establishes that CFRC received from the Town a charitable exemption for which organizational qualification is a prerequisite. Further, CFRC engages in some endeavors, like food distribution, that the Town does not dispute are charitable. [¶ 28] According to the joint stipulation, CFRC's purposes are limited to providing religious, charitable and/or educational services within the meaning of § 501(c)(3) of the Internal Revenue Code. These stipulated purposes are similar to organizational purposes that we have stated qualify for the benevolent or charitable exemption in the opinions discussed above. See Episcopal Camp, 666 A.2d at 108. Notably, CFRC's purposes are more specifically charitable than the preserve land and environmental education purposes supporting the exemption application in Cushing Nature & Preservation Center, 2001 ME 149, ¶ 2, 785 A.2d at 343-44. The County Commissioners did not have the benefit of the joint stipulation in reaching their decision. [¶ 29] On the other points, there appears no dispute that CFRC is organized and using its property in good faith for its stated purpose; there is no finding of any pretense to avoid taxation; there is no profit motive in CFRC's activity, it is losing money on its operations; and what revenue is generated is purely incidental to a dominant purpose that is benevolent and charitable. Thus, CFRC meets all the organizational criteria we have established to support a charitable exemption. The clarification of CFRC's purposes in the agreed stipulation may be important to the County Commissioners in reviewing organizational qualification for the exemption.