Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Ethics and Canadian Charities
The Charities Directorate has released a new T3010 (13) Registered Charity Information Return for Canadian registered charities with fiscal year ends after January 1, 2013. The changes on the T3010 (13) are basically more questions about the political activities of Canadian charities as a result of the 2012 Federal Budget. Canadian charities will need to answer more questions on political activities in Section C5; and fill out a new Schedule 7, Political Activities. If your fiscal year end is in 2012 then use the old T3010-1 - otherwise, for those with fiscal year ends after January 1, 2013 use the new T3010 (13). As pointed out to me by Steven Ayer of Common Good Strategies there are also an additional question on receipted foreign funds, more country codes and other small changes.
Here is a copy of the new form: http://www.cra-arc.gc.ca/E/pbg/tf/t3010/t3010-13e.pdf
Here is the revised guide: http://www.cra-arc.gc.ca/E/pub/tg/t4033/README.html or http://www.cra-arc.gc.ca/E/pub/tg/t4033/t4033-13e.pdf
Here is a larger font PDF of the T3010 (13) Guide: Completing_the_Registered_Charity_Information_Return_t4033_Rev_13_-_large_font.pdf
In 2012, new legislative measures were introduced that affect registered charities. These measures require registered charities to give more details about their political activities.
Changes to Form T3010(13), Registered Charity Information Return
Charities carrying out political activities must:
• answer additional questions at Section C5; and
• fill out Schedule 7, Political activities, if applicable.
Changes to Form T1236, Qualified Donees Worksheet / Amounts Provided to Other Organizations
Charities that gift to other organizations must report the amount of the gift that was intended for political activities.
All charities must fill out Form T1235, Directors/Trustees and Like Officials Worksheet. Charities subject to the Ontario Corporations Act must now fill out Forms T1235 and RC232 WS, Ontario Corporations Act Information Act Annual Return.
We have updated the instructions on Form T1235 and Form T1236.”
Here are some of the new questions on the T3010
C5 Political Activities
A registered charity may pursue political activities only if the activities are non-partisan, related to its charitable purposes, and limited in extent. A political activity is any activity that explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be retained, opposed, or changed.
(a) Did the charity carry on any political activities during the fiscal period, including making gifts to qualified donees that were intended for political activities? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Yes No
If yes, you must complete Schedule 7, Political Activities.
(b) Total amount spent by the charity on these political activities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5030 $
(c) Of the amount at line 5030, the total amount of gifts made to qualified donees. 5031 $
(d) Total amount received from outside Canada that was directed to be spent on political activities. . . . . . . . . . . . . . . . . . . . 5032 $ If you entered an amount on line 5032 you must complete Schedule 7, Political Activities, Table 3.
Political activities Schedule 7
A registered charity may pursue political activities only if the activities are non-partisan, related to its charitable purposes, and limited in extent. A political
activity is any activity that explicitly communicates to the public that a law, policy or decision of any level of government inside or outside Canada should be
retained, opposed, or changed.
1 Describe the charity’s political activities, including gifts to qualified donees intended for political activities, and explain how these relate to its charitable purposes.
2 Identify the way the charity participated in or carried out political activities during the fiscal period.
Tick all the boxes that apply
Staff Volunteers Financial Property
Media releases and advertisements 700
Conferences, workshops, speeches, or lectures 701
Publications (printed or electronic) 702
Rallies, demonstrations, or public meetings 703
Petitions, boycotts (calls to action) 704
Letter writing campaign (printed or electronic) 705
Internet (Web site, social media (Twitter, YouTube)) 706
Gifts to qualified donees for political activities 707
Other (specify): 708
Funding from outside of Canada for political activities
3 If the charity entered an amount on line 5032, complete the fields below. Enter the political activity that the funds were intended to support, the amount
received from each country outside Canada, and the corresponding country code (using the codes provided in Schedule 2.) For more information on how
to complete this table, see Guide T4033 (13).
Political activity Amount Code”
The section of guide dealing with C5 political question was updated:
“C5 – Political activities – While a registered charity may not be established for a political purpose, it may choose to advance its charitable purposes by taking part in political activities under certain conditions.
A registered charity may pursue political activities if they are:
1. non-partisan in nature. A charity must not directly or indirectly support or oppose a political party or candidate for public office. For example, a registered charity cannot purchase tickets (or reimburse its employees for the expense of purchasing tickets) to a fundraising event held by a political party;
2. connected directly to the charity’s purposes. A charity is only permitted to devote its resources to political activities about an issue, policy, or law that is connected to its charitable purposes. For example, a registered charity established for the purpose of wildlife conservation could not engage in political activities related to prison reform;
3. subordinate to the charity’s purposes. A charity can only engage in political activities provided it has satisfied the requirement that it devote substantially all its resources to charitable activities. Generally a registered charity may devote no more than 10% of its resources to political activities.
We consider an activity to be political if a charity:
1. explicitly makes a call for political action (for example, encourages the public to contact an elected representative or public official and urge them to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country);
2. explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained (if the retention of the law, policy, or decision is being reconsidered by a government), opposed, or changed; or
3. explicitly indicates in its materials (whether internal or external) that the intention of the activity is to incite, or to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.
As of June 29, 2012, a political activity includes the making of gifts to qualified donees intended for political activities. Under the new rule, when a registered charity makes a gift to a qualified donee and it can reasonably be considered that a purpose of the gift was to support the political activities of the recipient, the gift is considered an expenditure on political activities. This means that a registered charity must now declare an amount that it gave to another qualified donee to conduct political activities as part of its own political activities and count this amount against the allowable limit.
A charity is not necessarily engaging in a political activity when it addresses a government body on legislative and policy matters. When a charity makes a representation (oral or written presentation or brief), whether by invitation or not, to an elected representative or public official, the activity is considered to be charitable provided that it:
• relates to an issue that is connected to the charity’s purposes;
• is well-reasoned; and
• does not contain information that the charity knows or ought to know is false, inaccurate, or misleading.
However, it is important to note that if making representations to elected or public officials is all the charity does, or is a substantial focus, the activity would no longer be subordinate to its charitable purposes and could indicate that the charity has an unstated political purpose.
For more information, see Policy Statement CPS-022, Political Activities.
C5(a) – Line 2400 – Tick yes if the charity carried out any political activities during the fiscal period, including making gifts to qualified donees that were intended by the donor for political activities. If you ticked yes at Line 2400, fill out Schedule 7 Political activities, Table 1 and Table 2.
C5(b) – Line 5030 – Enter the total amount gifted, spent, or both by the charity on these political activities.
C5(c) – Line 5031 – Of the amount at line 5030, enter the total amount of gifts made to qualified donees.
The charity should only report on gifts to other qualified donees that were intended for political activities. The charity is not responsible for tracking and reporting on how the funds were actually spent. Further, regardless of whether the funds were ultimately used for political activities, if a purpose of the gift was to fund political activity, it should be reported in line 5031.
C5(d) – Line 5032 – Enter the total amount received from outside Canada that was directed to be spent on political activities. If an amount is entered, fill out Schedule 7, Table 3, Funding from outside Canada for political activities.
This question only addresses the donor’s intent for the funds. The charity must report the total amount that the foreign donor directed it to spend on political activities, whether or not the amount was actually spent.”
There is a new “Line 4571 – Enter the charity’s total tax receipted amounts from all sources outside Canada (both government and non government).”
The description for Line 5030 dealing with political expenditures has been modified:
“Line 5030 – Enter the same amount that was reported at Q5(b). This includes the part of the amount on line 4950 that represents expenditures for political activities, inside or outside Canada., and the amount on line 5031 that was reported at Q5(c). For additional information on acceptable political activities, see Policy Statement CPS-022, Political Activities.”
The description for Schedule 7 is new:
“Schedule 7, Political activities
This schedule should only be filled out if the charity conducted political activities or received funds intended for political activities from foreign donors during the fiscal period.
For more information, on political activities, see Policy Statement CPS-022, Political Activities.
If you ticked yes at C5 (a) – Line 2400 fill out Tables 1 and 2.
Table 1 – Describe the charity’s political activities including its gifts to qualified donees intended for political activities and explain how these relate to the charity’s purposes.
In this table, the charity should identify how the law, policy, or decision of government that the charity was trying to influence is related to its charitable purposes. The description should not include the means the charity used to try to retain, oppose, or change the law, policy or decision as the means should be identified in Table 2.
An example of a description is: ABC charity is established to promote health by giving medication to cancer patients in Canada. The charity wants the Canadian government to change the drug review process to establish an open border North American standard that would allow drugs currently only approved in the US to be readily sold in Canada.
Table 2 – Identify how the charity participated in, or carried out political activities (including funding political activities) during the fiscal period by reporting the types of resources used to carry out these activities. Tick all the boxes that apply.
The term “resource” is not defined in the Income Tax Act but we consider it to include the total of a charity’s financial assets, as well as everything the charity can use to further its purposes. This includes employees, volunteers, money, and property (such as buildings, equipment, land, and supplies).
ABC charity organized a rally on Parliament Hill to urge the government to change the drug review process. It used staff to organize and plan the rally and financial resources to rent buses to transport supporters to the rally. In this scenario, in the column marked “Rallies, demonstrations, or public meetings,” tick the boxes under “Staff” and “Financial.”
Charity XYZ’s only political activity was to gift bullhorns and money to ABC charity to support its rally on Parliament Hill. In this scenario, in the column marked “Gifts to qualified donees for political activities,” Charity XYZ ticks the boxes under “Financial” and “Property.”
Gifts from Foreign Donors
If you entered an amount on Line 5032, fill out Table 3, Funding from outside of Canada for political activities. This table captures amounts received from foreign donors that were intended to support political activities.
Table 3 – Enter the political activities that the funds were intended to support, the amount received from each country outside Canada, and the corresponding country code (using the country codes provided in schedule 2).
The charity must report the total amount that foreign donors directed it to spend on political activities rather than the amount it actually spent on these activities.
ABC charity received $5,000 from an organization in the United States and $10,000 from an individual in France with a direction from both that the funds are to be spent for the purpose of urging the government to change the drug review process to enable US approved drugs to be readily sold in Canada.
Political Activity Amount Code
Urge government to change the drug review process to enable US approved drugs to be readily sold in Canada. $5,000 US
Urge government to change the drug review process to enable US approved drugs to be readily sold in Canada. $10,000 FR”
The Guide does not include the program areas and field codes anymore. Presumably this is save space. Here is the list if one needs it:
“Program areas and field codes
Use the list below to choose up to three of the most significant areas that adequately describe the charity’s programs during the fiscal period. In the space provided on the Registered Charity Basic Information Sheet, enter the description and field code (for example, Nursing homes - F2), as well as the estimated percentage of total time and resources (human/financial) used in each area.
If the charity is funding qualified donees, use the “Other” category and write “funding qualified donees.” If you cannot find a suitable area, use the “Other” category and describe the program.
If the charity plans to engage in new activities, we recommend contacting the Charities Directorate to make sure the new activities are charitable.
Social services in Canada
A1 - Housing (seniors, low?income persons, and those with disabilities)
A2 - Food or clothing banks, soup kitchens, hostels
A3 - Employment preparation and training
A4 - Legal assistance and services
A5 - Other services for low?income persons
A6 - Seniors’ services
A7 - Services for the physically or mentally challenged
A8 - Children and youth services/housing
A9 - Services for Aboriginal people
A10 - Emergency shelter
A11 - Family and crisis counselling, financial counselling
A12 - Immigrant aid
A13 - Rehabilitation of offenders
A14 - Disaster relief
International aid and development
B1 - Social services (any listed under A1?A13 above)
B2 - Infrastructure development
B3 - Agriculture programs
B4 - Medical services
B5 - Literacy/education/training programs
B6 - Disaster/war relief
Education and research
C1 - Scholarships, bursaries, awards
C2 - Support of schools and education (for example, parent?teacher groups)
C3 - Universities and colleges
C4 - Public schools and boards
C5 - Independent schools and boards
C6 - Nursery programs/schools
C7 - Vocational and technical training (not delivered by universities/colleges/schools)
C8 - Literacy programs
C9 - Cultural programs, including heritage languages
C10 - Public education, other study programs
C11 - Research (scientific, social science, medical, environmental, etc.)
C12 - Learned societies (for example, Royal Astronomical Society of Canada)
C13 - Youth groups (for example, Girl Guides, cadets, 4?H clubs, etc.)
Culture and arts
D1 - Museums, galleries, concert halls, etc.
D2 - Festivals, performing groups, musical ensembles
D3 - Arts schools, grants and awards for artists
D4 - Cultural centres and associations
D5 - Historical sites, heritage societies
E1 - Places of worship, congregations, parishes, dioceses, fabriques, etc.
E2 - Missionary organizations, evangelism
E3 - Religious publishing and broadcasting
E4 - Seminaries and other religious colleges
E5 - Social outreach, religious fellowship, and auxiliary organizations
F1 - Hospitals
F2 - Nursing homes
F3 - Clinics
F4 - Services for the sick
F5 - Mental?health services and support groups
F6 - Addiction services and support groups
F7 - Other mutual?support groups (for example, cancer patients)
F8 - Promotion and protection of health, including first?aid and information services
F9 - Specialized health organizations, focusing on specific diseases/conditions
G1 - Nature, habitat conservation groups
G2 - Preservation of species, wildlife protection
G3 - General environmental protection, recycling sevices
Other community benefits
H1 - Agricultural and horticultural societies
H2 - Welfare of domestic animals
H3 - Parks, botanical gardens, zoos, aquariums, etc.
H4 - Community recreation facilities, trails, etc.
H5 - Community halls
H6 - Libraries
H7 - Cemeteries
H8 - Summer camps
H9 - Day care/after?school care
H10 - Crime prevention, public safety, preservation of law and order
H11 - Ambulance, fire, rescue, and other emergency services
H12 - Human rights
H13 – Mediation services
H14 - Consumer protection
H15 - Support and services for charitable sector
I1 - Write a description if this category applies”
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.