Canadians are increasingly asking “How Much Should A Canadian Charity Spend on Overhead?” Is this the right question?
89% of charities issue inappropriate receipts according to statistics from the CRA when they audit charities. Other than non-filing the T3010 this is the greatest reason that charities face revocation. Here is my paper that I delivered to the Ontario Bar Association (OBA) Institute 2011 entitled Top Receipting Concerns for Canadian Registered Charities.
Here is a revised version of the Canadian Charity Law Checklist by Mark Blumberg. In addition to reminding charities of questions to ask it also provides links to relevant resources.
CRA has just released a new guidance called “Canadian Registered Charities Carrying out Activities Outside Canada”. http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cgd/tsd-cnd-eng.html Although the name indicates “foreign activities” this document deals with a lot more than foreign activities. It covers the relationship between a Canadian charity and any non-qualified donee, whether in Canada or abroad. If a Canadian charity has dealing with, for example, a non-profit that does not have charitable status then the same rules apply as a Canadian charity dealing with a foreign entity. Essentially, almost all organizations outside of Canada are non-qualified donees. If you are going to transfer resources to them you need to maintain “direction and control” over those resources. This document helps a Canadian charity understand what is required for direction and control. Failure to maintain direction and control can result in a 105% penalty of the amount transferred and/or revocation of charitable status.
In this article “CRA’s Consultation on Foreign Activities: What is New and Interesting with Canadian Charities Conducting Foreign Activities” I discuss what is new in the draft consultation.
In this article I discuss how Canadian charities can work with other Canadian or International Organizations that are not registered Canadian charities as long as they maintain direction and control of the Canadian resources.
So much is written about legal issues relating to charities in Canada. In this article I try to distill the ten most important things you need to know about charity law in Canada.
The title is self explanatory. CRA’s website is a valuable resource for anyone involved with charities. As a charity lawyer I am at the website daily and encourage others to make use of the material and information.
Charities, by virtue of their reputation and access to resources, in some cases make a tempting target for terrorists who are trying to acquire funds and/or legitimacy. Canadian charities need to be diligent in ensuring that their resources are used appropriately and not diverted to non-charitable uses, including terrorism. This article provides some basic guidance as to steps a Canadian charity can take to avoid having their resources misappropriated for terrorism or other inappropriate uses such as fraud.
Here is a sample contractor agreement for a Canadian registered charity conducting foreign activities I prepared it for the Capacity Builders Charity Law Information Program (CLIP) in order to assist charities with understanding what such an agreement could look like.
Canadian Charities and Foreign Activities -This article published in The Philanthropist describes the permissible structured relationships and agreements, review a number of cases dealing with Canadian charities operating abroad, and highlight some of the challenges facing Canadian charities that have foreign activities.
32 ideas for managing risk with volunteers.
Most Canadian charities that lose their registered charity status have lost it for one reason - that is non-filing of the T3010 Registered Charity Information Return.
Canadian charities generally cannot just gift funds to foreign charities. This article discusses appropriate direction and control over foreign activities and projects by Canadian charities.
In April 2008, CRA released a Consultation on proposed policy regarding fundraising by Registered Charities (RC4456-e) (“Fundraising Consultation”). This document is a relatively short six page overview, and CRA has recently provided charities with a more detailed document entitled “Background information for proposed policy on fundraising by Registered Charities” which is 29 pages (“Background Document”). The background document provides greater detail, further definitions of terminology and CRA’s positions on various points. In this article I will discuss the content of the Fundraising Consultation and Background Document, discuss and analyze the criticisms from others of these documents, and provide my own comments.
In this article I discuss various options for non-Canadian non-profits and charities interested in fundraising or operating in Canada.
This article discusses certain ‘charitable’ gifting schemes which threaten to undermine the public and regulators confidence in the charitable sector. This article also discusses a plan to deal with this problem.
There are many options for foreign universities who are interested in fundraising in Canada and I have discussed 6 different options. It is time to think of your alma mater or your parent’s alma mater and how Canadians can support these universities.
Here is a copy of a presentation I recently delivered on promoting bequests to charities. As charities seek to diversify or increase revenue, bequests become an even more important potential source. It covers some of the advantages and disadvantages with using bequests, whether an organization should create a bequest program, 16 steps to setting up a planned giving program that emphasizes bequests, as well as legal, ethical, and practical issues to keep in mind.
Here is a copy of a presentation I recently delivered to a number of Canadian charities in Ottawa entitled “Legal Issues for Canadian Charities Conducting Foreign Activities and International Development”.
Here is a copy of a paper I wrote a few years ago on Charitable Remainder Trusts (CRT) in Canada. The CRT vehicle is extensively used in the US and less so in Canada. There is a concern that if the rules for CRT are made more favourable this will result in greater immediate tax benefits to a few wealthy people, but not much benefit for Canadian charities for decades to come if at all.
On July 2, 2008 the Lobbying Act came into force and many non-profits and charities are completely unaware of its existence or its effect on their activities. Lobbying is defined broadly under s. 7 of the Lobbying Act and includes the development of any legislative proposal by the Federal Government, or lobbying on the passage, defeat or amendment of any bill or resolution, advocating for amendments to any regulation, “the development or amendment of any policy or program of the Government of Canada”, or “the awarding of any grant, contribution or other financial benefit by or on behalf of Her Majesty in right of Canada”. Canadian non-profits and charities that do political advocacy or lobbying with the federal government need to consider whether their activities fall within the requirement to register under the Lobbying Act. This article may be helpful in understanding whether a charity or non-profit must register.
I recently delivered a presentation to a number of international development charities in Ottawa entitled “Encouraging Bequests While Avoiding Legal and Ethical Issues”. It covered issues such as the CRA Fundraising Policy and its effect on planned giving and bequests, 15 steps to create a basic planned giving program with or without money, 18 legal concerns with bequests to avoid, and 6 ethical issues with bequests and planned giving to be aware of. A copy of the presentation is in PDF here.
This article discusses the T3010 and the importance of filing it accurately and on time.
This article discusses the difference between an acceptable intermediary relationship between a Canadian charity and a foreign charity or NGO (a structured arrangement) and an unacceptable arrangement such as a conduit.
Here is a copy of my presentation to the Canadian Association of Paralegals on Establishing a Canadian Non-Profit or Charity - Avoiding practical, legal and ethical problems.
Here is a copy of my article ‘Bequests - Avoiding problems with the ultimate planned gift’ which was presented at a recent Ontario Bar Association Conference.
This article discusses how Canadian charities can obtain legal services in a way that will not break the bank. This is a big problem. According to the T3010 statistics a majority of charities spend zero on professional services which services include legal and accounting services. This is far from desirable if one thinks that accountability, transparency, good governance and compliance with the laws are important.
This article discusses considerations in setting up a registered Canadian charity and how to establish the charity.
This article provides information and suggestions as to how a Canadian charity should, and should not, deal with CRA audits. It also discusses possible CRA responses and the likelihood of each response.
Here is an article I wrote for Charity Village entitled “Is it legal and ethical to take over a dormant Canadian charity? ”
Here is a copy of the powerpoint slides from a presentation delivered by Danie Huppé-Cranford to the International Committee on Fundraising Organizations (ICFO) Annual General Meeting, May 14, 2010 entitled “Compliance Overview - Major Non-Compliance Issues”.
CRA has released its guidance “Upholding Human Rights and Charitable Registration”. Any Canadian charity dealing with human rights issues will want to read this document.
