Andy Levy-Ajzenkopf has written an article in Charity Village on a recent private members bill that proposes extending the deadline for donations to end of February for Canadian who donate to registered charities. The end of December deadline would become meaningless from a tax point of view. It also includes a rather innocuous proposal for a National Charities Week at the end of February.
Give now or give later?
Here are some of my thoughts on this private members bill:
The sector has invested an enormous amount of energy in the Braid hearings at the Finance Committee. I was surprised that Mr. Braid did not wait to consider the Finance Committee report that he requested before proposing a private members bill to implement certain changes on charitable giving.
The idea of allowing people to donate by end of February instead of December 31 may cause more confusion than anything else. December 31 is a firm date that people know and act upon – now donors will not need to worry about December 31 and they may be preoccupied with other issues in late February and simply forget to donate. Also the juxtaposition of RRSPs for your old age and charitable giving may result in charitable giving losing out. Personally I prefer the juxtaposition of conspicuous consumption in December with helping those who are less fortunate. The change in date will require a huge educational effort on the part of charities, government and advisors that could probably be focused on more important issues.
It will also put pressure on charities in terms of issuing tax receipts as many had used January and February to work it out – now they will have to rush them through in early March as taxpayers will complain if they don’t have their receipts for filing their tax returns in March.
Donations to charities result in approximately 7% of the revenue of charities in Canada. What about the 70% which comes from government revenue? If various levels of government cut back funding to the sector by even 10% it will mean that charities will have to fundraise 100% more just to make up that decline.
We have too much tweaking with tax benefits and dates, not enough dealing with real issues that Canadians are demanding such as more transparency about charities and non-profits and preventing a small number of people from abusing the benefits of registered charities. Canadians have been generous with charities but if the public trust in the charity sector is reduced then the deadline for donations will make little difference.
I have no issue with the symbolic National Charities Week although I would have preferred a warmer time of year. I can think of many more concrete suggestions to give greater profile and voice to the charity sector including having a cabinet minister whose sole responsibility is the voluntary sector.
Let’s look at some of the media coverage just today of the charitable sector:
1) Charity disgraced: Latitude Foundation loses charitable status after CRA finds it was for ‘private gain’
2) Ottawa Salvation Army executive fired after $240,000 goes missing
These are very different stories. But every day we are seeing stories of charities being abused as part of complicated schemes or more simple embezzlement. We need a better approach to stopping those who abuse charities or the privileges that charities have. Otherwise it is reasonable to assume that public trust in charities will erode and that is the greatest danger that the charity sector faces.
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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.