We assist Canadian charities understand their legal and ethical obligations when operating charities in Canada or abroad and provide insights and information to non-Canadian charities interested in operating or fundraising in Canada.
The charitable sector in Canada has become highly competitive. There are over 86,000 Canadian registered charities. Donors, regulators, media, the public as well as other stakeholders, have increasingly high standards for charities and their operations. GlobalPhilanthropy.ca will assist non-profits and charities in Canada in trying to be transparent, legal, ethical and effective.
The CRA announced that it has revoked a charity, Skyway Foundation of Canada, for issuing inflated receipts for donations of marketable securities. In our Receipting Kit we note: "When a donor donates shares on certain stock exchanges, the CRA has “as a general rule, accepted the use of the closing bid price of the share on the date it is received or the mid-point between the high and the low trading prices for the day, whichever provides the best indicator, given the circumstances, of fair market value on normal and active market trading.” In some cases, such as thinly traded shares, this may not be appropriate." CRA notes in its press release that "During 2008, a private group of taxpayers engaged in transactions designed to artificially inflate the value of publicly traded shares. These shares were subsequently donated to the Organization which, in turn, issued official donation receipts totaling approximately $2.6 million. Subsequent to the donation, in 2009, these shares lost nearly 95% of their value resulting in a substantial loss to the Organization." it appears that this revocation was for thinly traded shares that were artificially inflated.
As many of you know on October 17, 2011, the Canada Not-for-profit Corporations Act (CNCA) came into force. Canadian non-profits under the Canada Corporations Act (CCA) have 3 years to make the transition. The bad news first - today is the deadline. The good news is that about 9000 CCA corporations of 19,000 or so have moved over to the CNCA. About another 1000 are in the pipeline according to Industry Canada and being processed. The next bit of good news that you should know is that although the deadline for the transition is October 17, 2014, dissolution is not automatic today and in fact Industry Canada will apparently start very slowly dissolving corporations beginning in November and focusing in on corporations who have not filed their corporate returns for many years.
I was delighted to read a publication "Donor Beware: Investigation into the sufficiency of the Canada Revenue Agency's warnings about questionable tax shelter schemes". The special report was prepared in December 2013 by J. Paul Dubé, the Taxpayers' Ombudsman. The 39 page report rips into charitable gifting tax shelters. Although it is generally very positive about the work of CRA in trying to educate taxpayers and denying the tax credits it does make some recommendations for CRA to increase educational efforts to donors on the dangers of these schemes. I was quite pleasantly surprised that there were a number of references to articles I have written or websites that I edit.
On October 3, 2014, CRA released an updated resource on tax shelter arrangements on the CRA website. This page provides detailed information on what is a tax shelter, provides links to case law dealing with tax shelters, and cautionary steps for individuals considering getting involved in a tax shelter.
We have prepared a more detailed article on Canada’s Anti-Spam Legislation (CASL) for Canadian Registered Charities and Non-profit Organizations. CASL is a complicated piece of legislation that applies to CEM that are either sent from, or accessed on, a computer system in Canada, unless an exemption applies.