Canadian Charity Law
January 2012
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.(JavaScript must be enabled to view this email address) on 01/18/2012 |
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[Update - We are delighted to have over 65 people/organizations attend the webinar “Successfully Funding First Nations Communities in Canada in Compliance with CRA Guidance” Here is an archived version of the presentation: https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=8543797&act=pb&rKey=7ae8d62d96563d62 Also here is a shortlink if the long link does not work: http://ow.ly/90e1N Here is a copy of the presentation in PDF of Successfully funding First Nations communities in Canada in compliance with CRA guidance]
The first class action lawsuit involving what CRA terms an “abusive charity gifting tax scheme” has settled at a Settlement and Class Counsel Fee Approval Hearing that was held on January 17, 2012 in Toronto. The material for that hearing is on the Scarfone Hawkins website and is quite interesting reading providing lots of interesting details about the scheme. Here is announcement from the Plaintiff’s lawyers Scarfone Hawkins LLP.
Ken Berger, the President & Chief Executive Officer, of the US charity watch dog group Charity Navigator will speaking at the CLIP conference “Being Good at Doing Good” on the subject of “The Battle for Transparency in the Non-Profit Sector”.
Lois G. Lerner, the Director of the Exempt Organizations Division of the Internal Revenue Service will be speaking at the Charity Law Information Program (CLIP) Conference “Being Good at Doing Good” in Toronto, which is taking place on February 13 and 14th. http://www.clipconference.wildapricot.org/ As head of the Exempt Organizations Division she is responsible for the regulation of US charities or exempt organizations including registration, education, and compliance. She will be giving two presentations - one focusing on why regulators care about governance and the second on top compliance issues for US charities. We will also have speakers from the CRA and Charity Commission of England and Wales and other experts in charity governance, financial controls and compliance.
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.(JavaScript must be enabled to view this email address) on 01/17/2012 |
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The Toronto Star’s Investigative Reporter Kevin Donovan, who frequently covers the charitable sector, will be presenting at the Charity Law Information Program (CLIP) conference “Being Good at Doing Good”. Increasingly the media has been focusing on charities and certain hot button issues. Those involved with charity governance, financial management and communications will find his comments very useful.
On December 21, 2011 the Department of Finance announced a consultation on “updating Canada’s regime for combating money laundering and terrorist financing.” They also put out a consultation paper, “Strengthening Canada’s Anti-Money Laundering and Anti‑Terrorist Financing Regime,” which contains a number of proposals, a couple of which relate to charities. The deadline for submitting comments is March 1, 2012. The two proposals relating to charities are pretty minor - first for the Canada Border Services Agency (CBSA) to share information with CRA Charities Directorate on seizure reports when they seize forfeited currency. Second, the Financial Transactions Reports Analysis Centre of Canada (“Fintrac”) already provides disclosure to CRA but such disclosure may be more proactive. These recommendations will facilitate the Charities Directorate having greater awareness of potential money laundering or terrorist activities that could potentially involve charities.
In a Globe and Mail article entitled “Foes of Northern Gateway pipeline fear revocation of charitable status” there is a discussion of recent issues raised about foreign funding on Canadian charities and political activities of Canadian charities.
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.(JavaScript must be enabled to view this email address) on 01/09/2012 |
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There are 24 Registered National Arts Services Organization (RNASO) in Canada.
Here are some upcoming Charity Law Information Program (CLIP) seminars which I will be presenting across Canada. The format will be a morning discussing the 2011 Budget provisions for charities, some information on the new Federal Canada Not-for-profit Corporations Act, and a detailed discussion of fundraising regulations in Canada. The afternoon will focus on The Dos and Don’ts of Charitable Receipting.
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.(JavaScript must be enabled to view this email address) on 01/08/2012 |
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The Charity Law Information Program (CLIP) has just released the Receipting Kit for Canadian Registered Charities. The kit is 25 pages long and provides an overview of what a registered charity needs to generally know about receipting. As well, there is an attachment which is about 115 pages long with CRA guidance on receipting and even a CRA auditor checklist on receipting.
Here is a copy of a recent presentation on CRA’s Foreign Activity Guidance.
Minister of International Cooperation, Bev Oda, announced on December 23, 2011 the results of the Call for Proposals process of the Partnerships with Canadian branch. 53 organizations received about $142 million in total commitments.
Posted by
.(JavaScript must be enabled to view this email address) on 01/04/2012 |
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There are a few hundred foreign universities (ie. universities outside of Canada) that can issue Canadian official donation receipts and are therefore “qualified donees” similar to registered charities. The list of these universities was hidden on page 1550 of a regulation to the Income Tax Act. Now the list will be more easy to access on the Charities Directorate website.
Posted by
.(JavaScript must be enabled to view this email address) on 01/04/2012 |
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The CRA will be preparing a list of “Municipal and public bodies performing a function of government in Canada”. These “Municipal and public bodies performing a function of government in Canada” are qualified donees and can issue official donation receipts for gifts to them. CRA has noted on their website: “As a result of Budget 2011, municipal and public bodies performing a function of government in Canada must apply to be added to a list maintained by the CRA to become or continue to be qualified donees. We are currently developing the process by which these bodies must apply. Meanwhile, municipal and public bodies performing a function of government continue to be qualified donees until the application process is finalized. At that time, these bodies will have to apply to maintain this status.” As new information becomes available we will post it on our website.
Posted by
.(JavaScript must be enabled to view this email address) on 01/04/2012 |
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Canadian municipalities can issue official donation receipts similar to registered charities. Sometimes it is not clear whether a group is considered to be a municipality. In the past you would have to call CRA or write to them to verify whether a township, town, county, etc. was a municipality. As a result of changes in the 2011 Federal Budget, CRA was allowed to release a list of municipalities. The list is prepared by province. Currently the municipalities are all listed as of 2012-01-01. If a municipality is involved with inappropriate conduct like issuing incorrect receipts they can be suspended or delisted. Municipalities need to be careful about how they issue receipts.
Posted by
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The CRA has released a list of RCAAAs revoked for various reasons including for cause, failure to file their annual return, or voluntary revocation.
Posted by
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The CRA has published a list of registered Canadian amateur athletic associations (RCAAAs). Very interesting to see the names of RCAAAs and also those that were deregistered over the last few years. There are currently about 119 RCAAAs. CRA was only allowed to publish this list after changes introduced in the 2011 Federal budget to increase transparency in the charity/qualified donee sector.
The 2011 Federal Budget received Royal Assent on December 16, 2011. There were a number of changes that affect charities, RCAAAs and other types of qualified donees that were in the budget.
December 2011
Posted by
.(JavaScript must be enabled to view this email address) on 12/27/2011 |
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Here is a great piece by Katherine Van Kooy in the Calgary Herald entitled ‘Charity rankings often don’t tell the full story’. Katherine van Kooy is the president and CEO of the Calgary Chamber of Voluntary Organizations (CCVO).
It is the time of year that many are thinking about and giving to charity. The Federal government sent out a press release stating “We encourage Canadians to donate generously but also to do their homework to ensure that the funds they donate will be put to good use.” I cannot emphasize enough the importance of avoiding charity schemes or investments that promise you tax savings greater than the amount of your investment and also doing your due diligence on the charity that you are donating to. You might find a new micro-site I am working on helpful - http://www.smartgiving.ca
In Sarsonas v. The Queen, 2011 TCC 559 (December 8, 2011) Sheridan J. delivers a decision on a claim by Mr. Sarsonas that he donated thousands of dollars to charity. Sheridan J. describes in detail a scheme in which some tax preparers prepared false receipts for their clients and were paid 10% of the face value of the receipts. Sarsonas lost at the Tax Court. One may think that this sort of receipting is an isolated event however according to CRA over 100,000 Canadians have submitted false receipts and another 175,000 Canadian haves been involved in abusive charity gifting tax schemes.
The CRA just put out a press release entitled “The Canada Revenue Agency revokes the charitable status of the Canadian Foundation for Tamil Refugee Rehabilitation”.
Here are the CRA’s “Program areas and field codes” for the T3010 Registered Charity Information Return and the TF725 Registered Charity Basic Information Sheet (BIS). These codes are needed when you are completing the T3010. As well they are useful if you are searching T3010 data to fine tune the areas of charitable work.
November 2011
The new Canada Not-for-profit Corporations Act (CNCA) is in force as of October 17, 2011. Industry Canada has placed hundreds of pages of information on the new act on their website in over 70 different documents. We have tried to accumulate the information in one PDF document which is now over 400 pages For up to date information check the Industry Canada website. We have also included for registered charities information from the Charities Directorate of CRA. This document may be helpful because it is easier to save a PDF to your computer or laptop especially if you will not have internet connectivity. Furthermore, one can word search (usually Control F) for words through the document. This document is not comprehensive and in the future we may update it.
Charity Central, based in Edmonton, has released a series of resources entitled Road to Accountability to help Canadian charities deal with the issues of accountability and transparency.
I recently gave a presentation to the Law Society of Upper Canada’s 14th Annual Estate and Trust Summit providing the Charity Law Update.
Posted by
.(JavaScript must be enabled to view this email address) on 11/16/2011 |
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Today the Toronto Star posted an article entitled “Audit of charities encounters resistance”. I think that it is very important that there be transparency about charities and I have written quite a bit on the subject. Charities must be transparent with various stakeholders because such transparency is important in informing stakeholders of the work of the charity, and maintaining public trust and confidence in the charitable sector. However, I have a number of concerns with some of the statements and quotes in the article and also the article fails to broach many important issues and complexities with transparency in the charitable sector.
Posted by
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The Toronto Star has written about a Canadian charity named HEDAC in an article entitled “Toronto charity goes from zero to $60M in a year”
