Suffolk. Appeal from a decision of the Appellate Tax Board.
Hennessey, C.j., Quirico, Braucher, Kaplan, & Wilkins, JJ.
Taxation, Real estate tax: exemption. Charity. Corporation, Charitable corporation. Words, "Educational."
The opinion of the court was delivered by: Wilkins
In a proceeding to determine whether a charitable corporation conducting a summer program for arts educators and advanced arts students was exempt from taxation under G. L. c. 59, § 5, Third, the evidence was insufficient to support the Appellate Tax Board's finding that the corporation's activities benefited only a limited class of persons. [599-602]
Discussion of factors to be considered in determining whether a corporation is operated primarily for educational purposes within the purview of G. L. c. 59, § 5, Third. [602-605]
Cummington School of the Arts, Inc. (CSA), appeals from a decision of the Appellate Tax Board (board) denying CSA an abatement from local property taxes assessed from 1972 through June 30, 1975. CSA, which owns 150 acres of land and various buildings in Cummington, claims that its real and personal property is exempt from taxation under G. L. c. 59, § 5, Third, as property of a "literary, benevolent, charitable or scientific institution." The board concluded that CSA was not entitled to the statutory exemption and denied CSA's petitions for abatement. *fn1 We conclude that the board's decision is not supported by the evidence and remand the consolidated proceedings to the board for further consideration.
Each summer CSA, which is organized under G. L. c. 180, conducts an arts program for arts educators and advanced arts students. The assessors and the board agree that CSA was incorporated for educational purposes and has "all the external indicia of a charity." None of its activities is carried on for private profit, and CSA is exempt from Federal income taxation. For forty-one years prior to 1972, the assessors treated CSA's real estate and personal property as exempt from local taxation under G. L. c. 59, § 5, Third. The present dispute, which arose when the assessors refused in 1972 to continue to exempt CSA's property, centers on the question whether, in its actual operations, CSA is being conducted as a public charity for educational purposes.
To qualify for the exemption, CSA had the burden of establishing not only that the purposes for which it was incorporated are charitable, but also that in actual operation it is a public charity. Massachusetts Medical Soc'y v. Assessors of Boston, 340 Mass. 327, 332 (1960). Fisher School v. Assessors of Boston, 325 Mass. 529, 533 (1950). Jacob's Pillow Dance Festival, Inc. v. Assessors of Becket, 320 Mass. 311, 313 (1946). In an attempt to meet this burden, CSA offered certain exhibits and the testimony of four witnesses who had been associated with its summer programs during one or more of the tax years in question. *fn2 It is not necessary to recite in detail the evidence concerning CSA's operations. It is sufficient to note that teachers in the arts and advanced students in the arts attend the summer programs. A few participants attend with their families. CSA charges participants for attendance, but those who cannot pay receive scholarship aid. Arts educators are considered as participants, along with arts students, and they are not compensated. CSA receives approximately two-thirds of its income from public contributions. CSA has no formal schedule of instruction, and any teaching relationships are informal. Participants engage in independent study, workshops, Discussions, exhibitions of work, and free public performances, related to their arts projects. Participants are solicited in part through publications and mailings and are chosen by a committee of CSA's board of trustees. CSA introduced exhibits listing its participants by year. These exhibits showed a significant turnover among the people who participated in summer programs from one year to the next. The error which we perceive in the board's decision arises from its misinterpretation of this evidence concerning participation in CSA's programs.
We view the Conclusions expressed by the board in its report as resting largely, if not exclusively, on its finding that CSA was operated primarily for the benefit of a limited class of persons and that the public at large benefited only incidentally from CSA's activities. The board relied heavily on three opinions of this court (Massachusetts Medical Soc'y v. Assessors of Boston, 340 Mass. 327 ; Boston Chamber of Commerce v. Assessors of Boston, 315 Mass. 712 ; Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248 ) in which tax exemptions were denied because the activities of the taxpayers were of primary benefit to a limited class of people. Even if we were to accept as warranted the board's finding that CSA's activities did not benefit the public at large or some part thereof (see Assessors of Dover v. Dominican Fathers Province of St. Joseph, 334 Mass. 530, 540 ; Assessors of Boston v. Garland School of Home Making, 296 Mass. 378, 388 ), the board's Conclusion that CSA's activities did not benefit an indefinite class of persons is not justified on the evidence. *fn3 Educational organizations may qualify under G. L. c. 59, § 5, Third, as charitable if they benefit an indefinite class from among the public, even if they do not directly benefit the public generally. Assessors of Dover v. Dominican Fathers Province of St. Joseph, supra at 540. Assessors of Boston v. Garland School of Home Making, supra at 387.
The board noted that the arts educators attending CSA in 1972 were listed also as participants in the 1972 summer session and that three of the participating arts educators were members of CSA's board of trustees as well. These facts do not show that the group of persons benefiting from CSA's operation was a closed one. Obviously, the number of participants in 1972 was finite, as must be the case. But, as the board seemingly found, no one may attend CSA for more than three summer sessions. *fn4 CSA's uncontroverted evidence showed an attempt to obtain participants by notices in national literary publications and by announcements at college campuses. More importantly, that evidence also indicated that there was a substantial, but not total, turnover of participants from year to year. *fn5 Many schools and colleges qualifying for exemption have a greater continuity of attendance by students from year to year than CSA. See Assessors of Lancaster v. Perkins School, 323 Mass. 418, 421 (1948). We conclude that the board's finding that the operation of CSA benefited only a limited group of persons cannot stand. In this respect CSA is in a position more akin to that in Assessors of Dover v. Dominican Fathers Province of St. Joseph, 334 Mass. 530, 540 (1956), and in Assessors of Boston v. Garland School of Home Making, 296 Mass. 378, 388 (1937) (student bodies which changed composition from year to year), than that present in Boston Symphony Orchestra, Inc. v. Assessors of Boston, 294 Mass. 248, 255-256 (1936) (largely unchanging class of season ticket holders). The board must reconsider the evidence before it, and consider any additional evidence it may choose to receive, to determine whether CSA has met its burden of establishing its right to an exemption.
We believe it may be instructive to the board, CSA, and the assessors to comment on the considerations which the board should have in mind in its further deliberations. We are prompted to do so in part because the circumstances of CSA's nontraditional operations must be examined carefully to ascertain whether CSA has established that its activities are predominantly educational, and thus charitable, or whether CSA has shown merely that it furnishes facilities for summer vacations for people interested in the arts. See American Inst. for Economic Research v. Assessors of Great Barrington, 324 Mass. 509, 513 (1949). We are further moved to comment as to matters on which the board should focus its attention because the "findings of fact and report" refers to particular circumstances which may have influenced the board's Conclusion, although the board did not explicitly state its reliance on them. In certain respects, the board's "findings of fact and report" adopts the tone of a disbelieving, biased advocate rather than that of a dispassionate arbiter of the issues of fact and law argued before it.
We start with the established principle that an educational institution of a public charitable nature falls within the statutory phrase "literary, benevolent, charitable or scientific institution." G. L. c. 59, § 5, Third. *fn6 Assessors of Boston v. Garland School of Home Making, 296 Mass. 378, 386 (1937), and cases cited. Although the question of the credibility of witnesses is for the board, CSA's evidence appears to support the Conclusion that it is not carried on for private profit, and we do not understand the assessors to have argued or the board to have found the contrary. We have already noted that CSA is operated for an indefinite class of persons. The question thus is whether CSA is operated primarily for an educational purpose.
We have construed the word "educational" as including education in the "broad and comprehensive" sense of the term. Mount Hermon Boys' School v. Gill, 145 Mass. 139, 146 (1887). Our cases have recognized an institution's entitlement to exemption even where its educational goals were not within traditional areas of education. See, e.g., Assessors of Lancaster v. Perkins School, 323 Mass. 418 (1948) (special education for the retarded); Assessors of Boston v. Garland School of Home Making, supra (education in home making). Cf. Boxer v. Boston Symphony Orchestra, Inc., 342 Mass. 537, 539 (1961) (tort case: summer music school); Newton Centre Woman's Club, Inc. v. Newton, 258 Mass. 326, 330-331 (1927) (support for numerous civic activities, including a music school and free art exhibitions). Thus, the fact that CSA does not make "significant contributions to the educational mainstream," as the board might be read to have found, is not decisive of the issue it must decide. That fact merely makes CSA's burden of persuasion and the board's fact-finding tasks more difficult. "he more remote the ...