Imagine Canada has released a “Guide to Giving”. In addition to discussing “What should I look for before giving to a charity?” it also discusses “How can I find out how much a charity spends on fundraising? Is this regulated?”, “How much does Imagine Canada recommend a charity spend on fundraising? How can I be certain that a charity’s fundraising costs are reasonable?”, “What are outside fundraisers? Should charities use them?”, “Why do charities spend money on administrative costs or overhead?”, and “How can I find out more about charity salaries?”.
You can read the Guide to Giving at: http://www.imaginecanada.ca/files/www/en/ethicalcode/guide-to-giving-2010.pdf
It is a good overview for donors who know little about the charitable sector or for donors who have interesting ideas like “charities should not have overhead”, “charities should not spend money on fundraising”, “cannot everyone just be a volunteer at a charity”!
Here is the first question and answer:
What should I look for before giving to a charity?
• Charities are regulated by the Canada Revenue Agency (CRA). Visit the CRA website or call 1-800-267-2384 to confirm that the charity
in question is registered. Only registered charities have a charitable registration number and can issue tax receipts.
• Take the time to learn more about the charity. Visit their website, review their annual reports and financial information or consider
volunteering your time. If you can’t find the information you’re looking for, call the charity. A staff member or volunteer should be more than
happy to answer any questions you might have.
• Don’t forget to think about the purpose and results of the charity. What is the impact of the charity’s programs and services? Do they
resonate with you? How will your gift make a difference? Most charities have information on their achievements and results to help
you make a decision about donating.
• If someone asking for a donation doesn’t have the information you need to make a decision, don’t feel obligated to give right away.
Ask for a brochure or a website address and tell them you will make up your mind once you have more information.
• If someone asking for a donation makes you feel uncomfortable, pressures you to give or promises more than seems realistic (i.e.,
a tax receipt for more than you give), just say no.
For those interested in these issues you may find my article “How Much Should A Canadian Charity Spend on Overhead” at http://www.globalphilanthropy.ca/index.php/articles/how_much_should_a_canadian_charity_spend_on_overhead_-_an_article_by_mark_b/
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.