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.
I was asked by a friend in Vancouver to prepare a Blumbergs’ Snapshot of the BC Charity Sector 2012. Hopefully someone will find it helpful.
We recently reviewed the T3010 information for 2012. The database was prepared by the Charities Directorate of CRA in June 2014 and covers about 85,477 charities which is almost all of the 2012 T3010 returns. Canadian registered charities were required to disclose on the 2012 T3010 “Did the Charity Carry on Political Activities During the Fiscal Year?” (line 2400) and “Enter the Total Amount spent by the Charity on these activities” (line 5000)
Over the last few years in both Canada and the US there have been greater attempts to rate charities. As part of the Blumbergs' Charity Law Institute 2014 see "The Great Debate: Be it Resolved That Rating charities improves the charitable sector", we will have Kate Bahen and Greg Thomson, of Charity Intelligence, arguing for rating of charities and Mark Blumberg arguing against. Here is more information on the Blumbergs' Charity Law Institute 2014 and the many other important topics.
I recently received from the Charities Directorate of CRA some charts showing the combined assets and revenues of the Canadian registered charity sector for 2011 and 2012. A few quick comments:
I recently contacted Industry Canada and they advised that as of July 26, 2014 there have been 5,386 continuances to the new CNCA. As there are ostensibly 19,000 Federal corporations that are/were under the old Canada Corporations Act there appear to be a large number of organizations that still need to continue. For those who have not continued you may find this short webinar helpful.
In October 2013 there were only 1800 continuances according to Industry Canada from the old CCA to the new CNCA. That number has now jumped to 4175 corporations by May 31, 2014 and is probably higher over the last 5 weeks. That being said there are about 19,000 Federal corporations and many clearly need to continue or face dissolution after October 17, 2014. For registered charities dissolution will also eventually result in loss of registered charity status.
We have just released the Blumbergs’ Snapshot of the Canadian Charity Sector 2012. The Canadian charity sector has grown again. The Canadian charity sector is a vital part of Canadian society and economy with revenue of over $223 billion and expenditures of about $218 billion.
The budget had a number of interesting proposals - perhaps my favourite was improving the pay of personal support workers (PSW). Many who even wanted an election liked some of the aspects of the budget and hopefully one day some of the proposals can be revisited. Some of the candidates views are night and day and I will let other hypothesize of the impact of different governments on society and the economy.
I recently requested numbers from CRA on abusive charity gifting tax schemes. The number are trending down. 2006 was the highest at $1.3 billion. 2011 was $299 million. 2012 was $273,000. 2013 preliminary numbers are $100,000 but as we know there are more returns to be filed. Crossing my fingers that the 100 million does not increase too much.
We recently reviewed the T3010 Registered Charity Information Return database for 2012 as part of the Sean Blumberg Transparency Project. We have taken a subset of the 2012 T3010 data to look at only registered charities based in Alberta. The data set was updated to January 2014. Alberta has a very important charitable sector and this will shed a small amount of light on some of the numbers.
The CRA has updated its "media kit" and specifically the facts and figures section.
I have stopped caring about the numbers from Stats Can on charitable giving because they are so out of whack with reality. I think that the note to reader is more important than the numbers. If you would believe the Stats Can version of events Canadians are giving less. In 2011 they gave $8.5 billion and in 2012 they gave $8.3 billion which is a decline of 1.9% according to Stats Can.
Here is a list of the Ontario non-profit corporations under the Ontario Corporations Act. There are 59,605 Ontario corporations on the list. The list is 1084 pages long. Some of the Ontario corporations are active and some are inactive. We think that it is important for organizations to be able to have a public list so that they can easily determine whether or not they are an Ontario corporation.
Here are some interesting numbers from the Charities Directorate. 4,456 applications and 2060 of them are registered/reregistered. Most applications are either returned for incomplete information, denied, withdrawn or abandoned. It just reiterates the importance of carefully preparing any charity application and understanding the Income Tax Act requirements for charities and CRA’s guidance and expectations.
The Charities Directorate just posted an important message which provides an update on the Charities Directorate activities. There is discussion of technology, guidances, CNCA, compliance activities but most importantly extensive discussion of political activities.
The CRA has just released its Non-Profit Organization Risk Identification Project Report. The relatively short report makes for interesting reading. It deals with the 80,000 or so non-profits that are not registered charities. This will have an impact on groups involved with amateur athletics, business associations, social clubs etc. The report discusses the requirements for these type of entities and how there is some minor and also serious non-compliance with those current requirements. The 2014 Federal Budget had promised a review of these type of non-profits and the release of this report is one piece of that discussion.
We recently reviewed the T3010 information for 2012 to see how many charities identify themselves as doing work that relates to the environment. When we reviewed the T3010 about 1150 registered charities identify themselves as carrying on some work in one of three environmental areas.
We recently reviewed the T3010 information for 2012. We looked at government funding and specifically which Canadian registered charities received the most funds from municipal governments. Please review my caveats at the end about the reliability and usage of T3010 information.
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 Ontario government has released a report “Profile of Ontario Not-for-Profit and Charitable Organizations” based on some telephone and internet polling.
The US National Centre for Charitable Statistics has some good cautions on the use of US data Form 990 data that I recently noted. Similar issues apply here in Canada with the T3010 so I have reproduced the sections below.
In March 2013 we published the “Blumbergs Canadian Charity Sector Snapshot 2011”. Now here is Blumbergs Canadian Charity Sector Snapshot for 2010 which will allow those who are interested to compare the 2010 and 2011 snapshots.
The CFC 2013 Conference will be held in Winnipeg. I will be delivering a presentation on dealing with non-qualified donees. In honour of the conference and as part of the Sean Blumberg Transparency Project we have prepared some statistical information on the community foundation sector in Canada. Community Foundations in 2011 had $3.1 billion in assets ($3,128,321,435.00) and revenue of $338,109,753 and expenditures of $199,872,591.00. In total they are spending about 6.4 percent of assets on charitable and other expenditures.
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.