I recently compiled a list of which Canadian charities received funds from the Canadian Federal Government.
I recently compiled a list of which Canadian charities received funds from the Canadian Federal Government.
We recently reviewed the 2012 T3010 Registered Charity Information Returns for largest inter charity gifts. Here is a list of all gifts over $500,000 from the 2012 T3010.
The Charity Commission of England and Wales is under fire over the last few months. Those who are interested in charity regulation should be paying attention. The Charity Commission is a beacon for charity regulators and those that want charities to operate at high standards.
We have updated the Blumbergs’ 2013 Receipting Kit.
CRA is putting out better notices on donating wisely. I particularly like this advice “Get to know the charity.” Start by visiting the charity’s website to learn about its activities and how it’s managed. You can also review its financial information and activities by looking at its information returns using the CRA’s Charity Quick View at www.cra.gc.ca/charitylists. One of the best ways to learn about a charity is to volunteer.”
On November 28, 2013 the Supreme Court of Canada denied leave to appeal in the case of Prescient Foundation v. Minister of National Revenue. The SCC awarded costs against the appellant.
The Federal Court of Appeal has decisively dismissed the Kossow appeal. Kossow dealt with what CRA would term an “abusive charity gifting tax scheme”. Kossow is the second major case dealing with these schemes, the first one being Marechaux. The Federal Court of Appeal found this scheme was almost identical to Marechaux. The FCA concluded that the Tax Court judge was correct in concluding that as in Maréchaux there was no gift for purposes of the Income Tax Act. The FCA also dismissed other arguments such as that the TCC judgement was ‘not sufficient to permit meaningful appellate review’ or that including certain materials that were not admitted into evidence prejudiced the appellant. The court was also not impressed with an argument that a family law case (McNamee) dealing with a gift has any relevance to a gift under the Income Tax Act. According to the CRA there are over $6 billion in receipts issued under different abusive charity gifting tax schemes.
John Montague has written an article entitled “The Law and Financial Transparency in Churches: Reconsidering the Form 990 Exemptions” in the Cardozo Law Review. In the US, churches don’t have to file the Form 990 annual return, however, in Canada almost all churches that are registered charities need to file the T3010 on an annual basis. The US Form 990 provides the US public with far more information than the T3010 in Canada. That being many of the points raised by Mr. Montague about church governance, accountability and transparency are relevant to Canada. It is important in Canada that we review the T3010. We should improve the T3010 to provide important information to donors, volunteers and others about registered charities. While the T3010 does provide a fair amount of information, it tends to focus too much on certain issues while ignoring others.
Industry released today draft regulations to Canada’s Anti-spam Legislation (CASL) which will now come into effect on July 1, 2014. An important exclusion that will be welcomed by registered charities is that the Act does not apply to an electronic message “(g) that is sent by or on behalf of a registered charity as defined in subsection 248(1) of the Income Tax Act and
the message has as its primary purpose raising funds for the charity”. Keep in mind that if a charity is sending a commercial electronic message and this or other exclusions do not apply, then CASL will apply to the registered charity. The exclusion “its primary purpose raising funds for the charity” was introduced to cover situations were a fundraising email involved some commercial activity such as the sale of a gala dinner ticket. However, if the email fits in the definition of a commercial electronic message but it has a number of purposes and raising funds is not the primary purpose and another exclusion does not apply the CASL applies. The key takeaway for registered charities is that they are not exempted from CASL and that they should try and ensure that they have express consent from as many people as possible.
The CRA put a reminder on their website today “Does your organization make its resources available to, or work with a municipal or public body performing a function of government in Canada, such as a First Nation? The December 31, 2013 deadline for registration of these bodies to maintain their qualified donee status is approaching. For more information, go to Municipal or public bodies performing a function of government in Canada.”
I just reviewed the latest T3010 data disk for 2013 and here are the descriptions of activities for political activities by Canadian charities. This is only based on 7900 of the approximately 86,000 charities.
In this decision, Ms. Sowah appealed the Minister of National Revenue’s assessment of her 2006 taxation year in which her charitable donation claim was denied. The court found that the charitable receipts issued by the charity did not contain all of the required elements and failed on three counts.
In this decision, a taxpayer appealed the Minister of National Revenue’s denial of his claim for a charitable donation in 2009. The amount he claimed represented his estimate of the fair market value of the use by a registered charity of two rooms in his home (rent-free) over a two year period. The issue in this decision was whether the use by the charity of two rooms in Mr. Carson’s home, valued at $130 a month, represented a charitable gift from Mr. Carson to the registered charity, eligible for tax credits.
The Humanitarian Coalition has launched an appeal for Typhoon Haiyan which has killed many people in the Philippines and left many homeless. “The Humanitarian Coalition is a joint appeal mechanism. It is comprised of CARE Canada, Oxfam Canada, Oxfam-Québec, Plan Canada and Save the Children. With a combined presence in more than 120 countries, we bring together Canada’s leading aid agencies to finance relief efforts in times of international humanitarian crises. We work together to eliminate unnecessary competition, reduce the duplication of fundraising costs, and inform the public on humanitarian needs.” DFATD has announced a matching fund for donations for Typhoon Haiyan. There are approximately 620,000 Canadians of Filipino descent in Canada. Many of them regularly send funds back to family and friends as remittances. Many will also respond to this typhoon by sending funds home. While remittances are not a charitable donation and do not receive any tax support from the Canadian government, they can be tremendously beneficial. In fact all Canadian international philanthropy is $3 billion per year, while remittances to developing countries are around $15 billion per year. I will discuss further below.
The Ontario Government has passed “Bill 36 - An Act to enact the Local Food Act, 2013 and to amend the Taxation Act, 2007 to provide for a tax credit to farmers for donating certain agricultural products that they have produced”. Thanks to Ken Goodman for the heads up on this.
Saskatchewan has introduced a bill that would regulate informal public appeals. This will cover situations like when a fire destroys a family home and funds are raised to help the family and what to do if there are excess funds etc. Most importantly for charities the proposed legislation does not apply to qualified donees (i.e. registered charities, etc) and their fundraising. This legislation will be helpful in a number of situations that commonly come up with informal appeals. As is typical Saskatchewan leads the way!
We recently reviewed the T3010 Registered Charity Information Return database for 2011 as part of the Sean Blumberg Transparency Project. We provided an overview of the whole charity sector in the Blumbergs’ Charity Sector Snapshot 2011. We have taken a subset of the 2011 T3010 data to look at only registered charities based in Ontario. This article provides a snapshot of the registered charity sector in Ontario based on the 2011 T3010 filings. Here is a PDF of the Blumbergs’ Snapshot of the Ontario Charity Sector 2011.
The Finance Committee of the House of Commons has been holding hearings. A number of charities have presented. Many charities have sent in submissions.
The Accounting Standards Board and Public Sector Accounting Board are asking for comments by December 15, 2013 on some changes to the principles affecting non-profit accounting.
The Muttart Foundation has released the 2013 edition of its “Talking About Charities”. It updates its last similar opinion poll from 5 years ago.
At the website of the Toronto class action law firm Paliare Roland they have a note that “On Friday, October 18, 2013, the Ontario Superior Court of Justice approved the settlements with the Law Firm Defendants (including Edwin C. Harris Q.C.), and with the Funds for Canada Foundation, Mary-Lou Gleeson, Matt Gleeson and Gleeson Management Associates Inc. (the “FFCF/Gleeson Defendants”). ... The settlement with the FFCF/Gleeson Defendants is for $950,000, and requires them to co-operate in the ongoing prosecution of the action by producing documents and giving evidence. The settlement with the Law Firm Defendants is for a minimum of $23,130,789 and a maximum of $27,242,843. The Law Firm Defendants will also be obliged to produce documents and give evidence.” It will be interesting to see how the litigation proceeds.
Peter Braid on October 23, 2013 withdrew his bill entitled “An Act respecting a National Charities Week and to amend the Income Tax Act (charitable and other gifts)”. We welcome the withdrawal of the private members bill as we, and a number of organizations, had expressed concerns with the private members bill, especially the idea of extending the deadline for charitable contributions, and the lack of consultation with the sector.
Here is an interesting series of letters from CRA to the Corban Foundation in the 1990s relating its revocation as a registered charity. It deals with the meaning of a gift, and various programs to provide tuition assistance to those attending Christian schools. It provides CRA’s views on the legal arguments and cases.
I enjoyed giving a presentation tonight to an MBA class at Schulich School of Business at York University on Structures for Social Enterprise. Great students and lots of questions.
I am looking at a number of old audit letters from CRA. In one of the audit letters it discusses the CRA’s views on director compensation. We have previously discussed this issue on our blog. Here are some paragraphs from a CRA letter calling for the revocation of a particular registered charity’s status with one of the concerns being director compensation.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.