Blog

May 05, 2010

Changes to what you must report on Form T3010B, Registered Charity Information Return

CRA has put out a notice on changes to the T3010 as a result of the March 2010 Federal budget.  Here is the PDF I created of the CRA notice: Changes to what you must report on Form T3010B, Registered Charity Information Return

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May 05, 2010

Holy Web changes Batman - Charities Directorate changing URLs

CRA is updating their charities and giving links.  So this http://www.cra-arc.gc.ca/chrts-gvng/chrts/chrts-menu-eng.html will become this www.cra.gc.ca/charitiesandgiving   I will really miss those long and impossible to remember URLs - ok may be I do actually remember them!  Here is more information from CRA.

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May 05, 2010

What happens when a Canadian non-profit no longer qualifies for non-profit status -see CRA letter

Here is a CRA letter that discusses “What happens when a 149(1)(l) entity no longer qualifies for the tax exemption?” and various related issues.  Here is the PDF CRA_letter_on_what_happens_when_a_149(1)(l)_entity_no_longer_qualifies_for_the_tax_exemption.pdf

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May 05, 2010

“Dodging dubious donations – from yachts to barrels of books”

Here is an article entitled “Dodging dubious donations – from yachts to barrels of books” by John Webster Hochstadt who is the editor of Gift Planning in Canada.  It discusses the importance of having good policies such as a gift acceptance policy and the importance of declining questionable gifts.  http://www.canadianfundraiser.com/newsletter/article.asp?ArticleID=3297&ClientID=13785

May 04, 2010

CRA publishes Questions and Answers on 2010 Budget and Disbursement Quota changes

The CRA has released a Question & Answer on the Disbursement Quota Reform contained in the Canadian 2010 Federal Budget.  You can read the Q&A at http://www.cra-arc.gc.ca/gncy/bdgt/2010/chrt-eng.html

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May 02, 2010

MANGO’s Top Tips on the Warning Signs of Fraud in Charities

Here is Mango (Management Accounting for Non-governmental Organisations) Top Tips on the Warning Signs of Fraud in Charities - MANGO is a UK organization that provides valuable training and resources in financial management.

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May 01, 2010

CRA letter on charitable donation of publicly listed shares and whether gift

Lengthy letter from CRA on “Whether donations to registered charities of shares listed on a designated stock exchange constitute gifts for the purpose of the deduction for gifts under subsection 110.1(1) of ITA?” and the answer is yes.

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May 01, 2010

When is Fundraising considered to be “Conduct that is a main or independent purpose of the charity”?

There has been some confusion over when conduct that is a main or independent purpose of the charity in terms of CRA’s Fundraising Guidance.

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May 01, 2010

Is a foundation created to fundraise for a Canadian charity main purpose fundraising?

In the fundraising guidance it talks about registered charities cannot have fundraising as a main purpose.  Some people are confused by this.  What about a hospital foundation, university foundation or other foundatioon that spends almost all of its time fundraising and then gifting over the funds to a Canadian registered charity.

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May 01, 2010

Latest Charity Tax Shelter Information from CRA - further decline in charity tax shelters

In Cathy Hawara’s presentation to the Canadian Bar Association on April 30, 2010 in slide 15 she notes the most up to date statistics on charitable gifting tax shelters.  “The scope of the problem is significant; the CRA estimates that since 2003 there has been approximately: 172,300 participants, $5.4 billion in claimed donations.  The Charities Directorate has revoked 35 charities and RCAAAs for participating in tax shelter schemes. 2006 to 2009 saw participation drop by 80% to 10,800 individuals and the amount of “donations” drop by 76% to $284 million.”

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April 30, 2010

CRA Charities Directorate in 2010 - Cathy Hawara presentation to National Charity Law Symposium

Here is a copy of the presentation by Cathy Hawara to the National Charity Law Symposium in Toronto April 30, 2010.  The presentation provides an update and also discussion of number of current and important topics.
Here is the presentation CRA Charities Directorate in 2010 - Cathy Hawara presentation to National Charity Law Symposium

April 30, 2010

How does a Canadian charity determine appropriate compensation for an executive of the charity?

There has been some public concern expressed about executive compensation at charities.  It is important that charities have appropriate mechanisms to ensure that the charity is neither paying executives too little or too much for the services provided.  If you pay too little you might find out too late that the executive is moving on - the cost to a charity of such change at the top can in some cases be substantial.  As well, paying too little has a cascading effect on all salaries in the organization and the charity may have trouble keeping people at different levels.  If you pay too much you are not effectively using the assets of a charity, you will have others in your organization feeling that they are not sufficiently compensated and you will quite legitimately upset various stakeholders such as the public, media and CRA.

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April 27, 2010

Free Seminar on Transparency and Effectiveness in the Charitable Sector - ICFO

This seminar in Kitchener looks very interesting and I will hopefully be able to make it.  It is of the International Committee on Fundraising Organizations (ICFO).

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April 26, 2010

IRS Databook has interesting statistics on US charity sector

According to the IRS in the US there are 1,238,201 organizations called 501(c)(3)s which are similar to our “registered charities”.  We often hear in Canada that we have too many registered charities at 85,300 - so how do you think the Americans feel!  In the US last year they approved 42,484 new 501(c)(3) organizations.

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April 24, 2010

Toronto Star investigation: The high cost of Canadian sport foundation charities

The Toronto Star looked at the high fundraising costs of certain Canadian professional team foundations in an article entitled “The high cost of sports charities”.  It would appear to me that Canadian registered charities need to spend a little more time reading CRA’s Fundraising Guidance and changing some of the techniques and cost structure of fundraising activities.

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April 23, 2010

Who will be hurt by salary cap in Canadian charitable sector?

I was looking at a partial list of Canadian registered charities that have employees being paid 350,000 plus.  It is partial because only about 30,000 registered charities by February 2010 had filed their 2009 T3010B return, out of 85,300 charities.  Charities have 6 months after their fiscal year end to file.  I thought the list would be a lot more mixed but in fact is largely dominated by hospitals and health authorities.  It occurred to me a recent private members bill to cap compensation that can be paid by a charity to any employee at $250,000 will potentially most adversely affect hospitals in small cities and rural areas who probably have to use higher compensation to get the necessary health care professionals and skills.  It then occurred to me that maybe hospitals are, as my mother-in-law says “overrated” - perhaps we should return to a simpler time where doctors were generalists, practiced alone, arrived on horseback and most people did not have access to healthcare so if you stub your toe, you get gangrene and you died at the age of 30!

April 22, 2010

CRA to remove Charities Information Letters and Employee Speeches as they are out of date etc

CRA has advised that they will remove Charities Information Letters and Employee Speeches as they are out of date or the information is contained elsewhere.

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April 22, 2010

New CRA Charities Connection newsletter - just released

Here is CRA’s new Charities Connection newsletter that was released today.  http://www.cra-arc.gc.ca/chrts-gvng/chrts/cmmnctn/nwslttrs/cnnctn/cnnctn01-eng.html

April 22, 2010

Ontario “Building A Strong Partnership With The Not-for-profit Sector” Announcement

Here is an announcement from the Ontario about developing a “comprehensive and long term strategic action plan for its partnership with the not-for-profit sector”.

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April 21, 2010

Canadian public’s very limited understanding of charitable sector

Unfortunately the Canadian public and many policy makers have a very poor understanding of the charity sector.  I thought this piece from a speech by Helen Burstyn of the Ontario Trillium Foundation summarized the issue nicely.

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April 21, 2010

Effect of 2010 Budget on T3010 Form

CRA will be releasing a new T3010 form.  Charities can still use the current form and here are some notes from CRA on what financial information is no longer necessary in light of the removal of the 80/20 expenditure requirement and certain related concepts.  See Budget_2010_effect_on_T3010_filing.pdf.  Thanks to the Canadian Council of Christian Charities (CCCC) for bringing this to my attention.

April 21, 2010

Toronto Star article “CRA targets David Singh’s charitable tax shelters”

Here is an article by James Daw on two registered charities that recently lost their charitable status for involvement with tax shelters.  http://www.thestar.com/news/canada/article/797804—cra-targets-david-singh-s-charitable-tax-shelters?bn=1 Although these charity gifting tax shelter “charities” are being attacked by CRA and falling like flies there are unfortunately tens of thousands of ‘investors’ in these “retail schemes” who are left holding the bag with disallowed donation receipts, interest, penalties, and headaches.

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April 20, 2010

Should I laugh or cry?  Salary disclosure/caps for Canadian charities -Bill C-470 passes 2nd reading

Here is the Hansard transcript of comments from April 19 with respect to Bill C-470.  The bill has passed second reading and will now be referred to committee.  Some good points in the Hansard but unfortunately a lot of errors and misinformation.  One good thing that has come out of this debate is that it has proved quite conclusively that most MPs who have spoken on this issue know little about the registered charitable sector in Canada which is the area of regulation covered by Bill C-470. I guess it only makes up 8% of the economy so why pay attention?  It only employs 2.4 million people.  I will try to do an annotated version of the Hansard with my comments on the most obvious errors but there are so many that I am not sure that I can do it justice.  Any comments would be appreciated.  I realize that some of the proposal in the Bill may be popular amongst the public - but that does not mean that it is the most important regulatory issue facing charities, that it is well thought through or a good thing for the sector.

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April 19, 2010

Bill C-470: Transparency, salary capping or knee-capping for the charitable sector?

Here is an article by Andy Levy-Ajzenkopf in CharityVillage on Bill C-470 http://www.charityvillage.com/cv/archive/acov/acov10/acov1012.asp

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April 19, 2010

The Canada Revenue Agency revokes the charitable status of Destiny Health and Wellness Foundation

The CRA announced today the revocation of another Canadian registered charity called “Destiny Health and Wellness Foundation” which was involved with charity gifting tax shelters.

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Charity Lawyer Mark Blumberg

Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.

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