New Guidance for Canadian Registered Charities Carrying out Foreign Activities

CRA has just released a new guidance called “Canadian Registered Charities Carrying out Activities Outside Canada”. http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cgd/tsd-cnd-eng.html Although the name indicates “foreign activities” this document deals with a lot more than foreign activities. It covers the relationship between a Canadian charity and any non-qualified donee, whether in Canada or abroad. If a Canadian charity has dealing with, for example, a non-profit that does not have charitable status then the same rules apply as a Canadian charity dealing with a foreign entity. Essentially, almost all organizations outside of Canada are non-qualified donees. If you are going to transfer resources to them you need to maintain “direction and control” over those resources. This documents helps a Canadian charity understand what is required for direction and control. Failure to maintain direction and control can result in a 105% penalty of the amount transfered and/or revocation of charitable status.

Here is a bigger font PDF version of the guidance “Canadian Registered Charities Carrying out Activities Outside Canada”. This is easier to read, download, highlight and comment on. Guidance_for_Canadian_Registered_Charities_Carrying_Out_Activities_Outside_Canada_-_July_8,_2010.pdf

For those that are interested here is a sample contractor agreement for a Canadian registered charity conducting foreign activities http://ow.ly/29hM4 I prepared it for the Capacity Builders Charity Law Information Program and it is listed under “Resources” It is on the http://www.capacitybuilders.ca/clip/clip.php website.

As well here are some other resources on foreign activities that I have prepared that may be of interest:

Conduit vs. Structured Arrangement:
http://www.capacitybuilders.ca/files/resources/Canadian_Charities_Working_with_Other_Canadian_or_International_Organizations_that_are_not_Registered_Canadian_1256067186.pdf

Simplified 10 Steps for Contractor Agreement implementation
http://www.capacitybuilders.ca/files/resources/Foreign_Contractors_of_Canadian_Registered_Charities_Carrying_Out_the_Canadian_Charity__s_Projects_1253585049.pdf

Here is The Philanthropist article on foreign activities:
http://www.globalphilanthropy.ca/index.php/articles/canadian_charities_and_foreign_activities_-_by_mark_blumberg_in_the_philant/

Here are some free archived webinars, some which deal with foreign activities:
http://www.globalphilanthropy.ca/index.php/blog/comments/webinars_on_canadian_charity_law_-_charity_law_information_program_clip_by_/

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