Canadian Charity Law

Can a Canadian non-profit earn a profit?  CRA’s views on the subject

Can a Canadian non-profit under 149(1)(l) earn a profit.  Does it matter if the profit is intentional and/or will be used to further the organization’s purposes? 

Maréchaux, F.M.E. v. The Queen (TCC) - leveraged donation scheme nixed by Tax Court of Canada

In Maréchaux, F.M.E. v. The Queen the case revolved around whether F. Max E. Maréchaux, was entitled to a charitable donation tax credit.  Maréchaux is a lawyer at the law firm Miller Thomson LLP. http://www.millerthomson.com/index.cfm?cm=Employee&ce=details&primaryKey=16425  CRA had disallowed the donation claiming it was not a gift.  The appeal which relates to the 2001 taxation year and the tax court dismissed his appeal with costs and ruled for CRA. 

Are charitable donations in Canada down in 2008?  Depends how you define donation/legitimate charity

According to Statistics Canada total charitable donations in 2007 were $8,648,660,000 ($8.6Billion) and in 2008 $8,189,280,000 ($8.1B).  I am not great at math but that seems to indicate a drop of about $450 million dollars.  That is only part of the story.

CRA Charities Directorate Website Survey

CRA is asking those who visit their Charities and Giving Web pages which are geared towards donors and charities.  You can take their survey at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/cmmnctn/srvy-eng.html

Russel v. Queen - Tax Court of Canada crushes abusive tax gifting schemes

Russel is an art donation case.  However, it is more than that.  It might be the beginning of the end of the abusive charity gifting tax shelters in Canada.

Social Enterprise for Canadian Charities: Legal Compliance from A-Z in Toronto Nov 21, 2009

Social Enterprise for Canadian Charities: Legal Compliance from A-Z (9:00 AM – 5:00 PM) Saturday November 21, 2009

Charities are under increasing pressure to increase and diversify revenue. At the same time social enterprise offers a method to tackle complex social and economic problems. In this full day workshop charity lawyers Mark Blumberg (http://www.canadiancharitylaw.ca) and Richard Bridge (http://www.lawyerforcharities.ca) will cover the top 15 key legal issues facing charities in the morning and in the afternoon, specific legal issues affecting charities that wish to be involved with business activities, earned income, social enterprise, community economic development and fundraising. There are many advantages of being a charity and also many restrictions and responsibilities. It is important that Canadian charities comply with their legal responsibilities or the consequences in terms of reputation, charitable status and assets can be substantial.

Social Enterprise for Canadian charities - Legal Compliance from A-Z with Mark Blumberg and Richard Bridge

New UK Charity Commission online toolkit to help trustees manage risks to their charity

The first chapter of the online toolkit covers charities and terrorism.  The next chapters will deal with Safeguarding charity funds; Safeguarding charities – people, property, reputation; and a case study archive (good practice examples from the sector for all chapters) and other sources of help.  http://www.charitycommission.gov.uk/investigations/toolkitintro.asp

Ontario PGT bulletin entitled Charitable Fundraising: Tips for Directors and Trustees.

The Ontario Public Guardian and Trustee has produced a charity bulletin entitled Charitable Fundraising: Tips for Directors and Trustees.  In that bulletin they discuss fundraising requirements for charities that operate in Ontario. 

Faith Assemblies Mission International v. H.M.Q.

Another case involving a charity losing its charitable status.  Another example of a very weak case being brought that just helps perpetuate bad case law involving charities. 

What’s Wrong With Charitable Giving—and How to Fix It - very interesting WSJ article

Here is an interesting article on the US foundation sector that appeared recently in the Wall Street Journal entitled “What’s Wrong With Charitable Giving—and How to Fix It”  http://online.wsj.com/article/SB10001424052748704500604574481773446591750.html?mod=article-outset-box

Auditor General Report on the Canadian International Development Agency (CIDA) out

Here is the 2009 Fall Report of the Auditor General of Canada and Chapter 8—Strengthening Aid Effectiveness—Canadian International Development Agency which is located at http://www.oag-bvg.gc.ca/internet/English/parl_oag_200911_08_e_33209.html#hd3a

Charity Legal Compliance Risk Assessment Tool from the Charity Law Information Program

I recently prepared a Charity Legal Compliance Risk Assessment Tool for the Charity Law Information Program.  It is available at the CLIP website.

Major updates forthcoming in Ontario for charity law including repeal of Ont. Charitable Gifts Act

The Ontario government has put forward a “Good Governance” bill - “The majority of the nearly 600 items included in the Good Government Act, 2009 were contributed to by 22 ministries and propose technical changes that would simplify government processes, update, language and clarify administrative processes. ”  There are a number of changes including the repeal of the Charitable Gifts Act which had provided an Ontario charity may not own more than 10 per cent of an interest in a business.  Ontario was the only province to have such a restriction and it applied to all charities.  That is probably the most significant change. Although there were workarounds with trusts etc. such a restriction in my view never made much sense and with “registered charities” having to comply with the “unrelated business” rules under the Income Tax Act there is a system in place to regulate charities involvement with business. 

Donation from shady donor can be costly to charity

Interesting article entitled Charities Face Greater Threat From Ponzi Schemes Than Lost Investments  The long and the short is that a charity that received a donation from a person who had obtained those funds either illicitly or the return on an investment scheme that was a ponzi scheme, can be required to return the funds, even if they have already been spent on a good program and have been receipted for tax purposes.

Read more at: http://www.huffingtonpost.com/david-donell/charities-face-greater-th_b_223088.html

Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact

In March 2009, the National Committee for Responsive Philanthropy (NCRP) (http://www.ncrp.org/) released the Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact.  “The Criteria is the first ever set of measurable guidelines that will help foundations and other institutional grantmakers operate ethically and maximize the impact of their dollars.”  The Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact can be viewed at:  http://www.ncrp.org/paib

What role do the provinces play in regulation of charities in Canada?

Here is a good page of links on the CRA website entitled “What role do provincial and territorial governments play in the regulation of charities?”  http://www.cra-arc.gc.ca/chrts-gvng/dnrs/rgltn/menu-eng.html
Also see “Constitutional Jurisdiction Over Charities” at http://www.carters.ca/pub/book/2008/halsbury08.pdf

Strengthening Governance, Ethical Standards and Financial Controls Presentation - CLIP

Here is the Charity Law Information Program (CLIP) presentation Strengthening Governance, Ethical Standards and Financial Controls

http://www.capacitybuilders.ca/files/resources/Strengthening_Governance__Ethical_Standards_and_Financial_Controls_1256914425.pdf

CRA’s Foreign Activities Guidance and Dealing with Non-Qualified Donees Presentation

Here is the Charity Law Information Program (CLIP) CRA’s Foreign Activities Guidance and Dealing with Non-Qualified Donees, prepared by Mark Blumberg

http://www.capacitybuilders.ca/files/resources/Foreign_Activities_Guidance_and_Dealing_with_Non-Qualified_Donees_1256914491.pdf

CLIP Charity Compliance - A Primer for Boards presentation by Mark Blumberg

Here is a presentation I prepared for CLIP entitled Charity Compliance A Primer for Boards http://www.capacitybuilders.ca/files/resources/Charity_Compliance_-_A_Primer_for_Boards_1256914352.pdf

Charity Checklist - Managing Legal Compliance Risks Presentation in PDF - by Mark Blumberg

Here is the Charity Checklist - Managing Legal Compliance Risks presentation http://www.capacitybuilders.ca/files/resources/Charity_Checklist_-_Managing_Legal_Compliance_Risks_-_Handout_Version_1256914150.pdf

Financial Management for Non-Financial People in Toronto

Here are the flyers for Financial Management for Non-Financial People with Eric Plato in Toronto and Oshawa

Philanthropic Foundations Canada - 10th annual conference in Calgary, Alberta

I am in the midst of attending the PFC annual conference in Calgary.  There have been some very interesting speakers and discussions for foundations.

New CRA webinars announced

Here is a link to some upcoming Canada Revenue Agency webinars http://www.cra-arc.gc.ca/chrts-gvng/chrts/cmmnctn/wbnrs/rgstr-eng.html

Upcoming Charity Law Workshops in Calgary and Edmonton, Alberta

Here are some upcoming charity law, governance and internal controls workshops I am delivering in Calgary and Edmonton.  Calgary Foreign Activities Brochure, Calgary Charity Law Workshops Brochure, and Edmonton Charity Law workshops Brochure.  For information on all upcoming workshops and webinars see: http://www.capacitybuilders.ca/clip/clip.php

Bill C-300 Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act

The purpose of the proposed “Corporate Accountability of Mining, Oil and Gas Corporations in Developing Countries Act” is to “ensure that corporations engaged in mining, oil or gas activities and receiving support from the Government of Canada act in a manner consistent with international environmental best practices and with Canada’s commitments to international human rights standards.”  If you want to read the text of the proposed act see:  http://www2.parl.gc.ca/HousePublications/Publication.aspx?DocId=3658424&Language=e&Mode=1&File=27#1 

Risk Mitigation and Corporate Social Responsibility in Africa Seminar

I will be making a presentation on Legal Structures for Canadian Companies Carrying out CSR Abroad at the Risk Mitigation and CSR in Africa Seminar which will be held in Toronto on Thursday October 22, 2009.  This full-day seminar is geared towards people doing business, or thinking of doing business, in Africa. The program is supported by the Department of Foreign Affairs and International Trade Canada, HATCH, MineAfrica, the Ontario Ministry of Economic Development and Trade. 

For more information please see Risk_Mitigation_and_Corporate_Social_Responsibility_in_Africa_Seminar.pdf

One World Trust launches a global database of civil society self-regulatory initiatives

According to their site “One World Trust, a London based think tank, has launched a portal on civil society self-regulation which includes a database listing over 320 initiatives (codes of conduct, certification schemes, working groups, self-assessments and information services) across 80 countries. Each initiative has a unique page with summaries of its content; contact details; areas and types of activities the initiative addresses; a list of participant organisations; compliance, monitoring and sanctioning mechanisms; among others.” 

Charities Back on Track 2008-09 - UK report details problems with some UK charities

The UK Charity Commission has published an interesting report entitled Charities Back on Track 2008-09 which looks at various investigations involving UK charities and “financial mismanagement, trustee duties and responsibilities, vulnerable beneficiaries, and inappropriate political activities and campaigning.”  The number of serious incidents has increased - perhaps an indication of better reporting rather than increased misbehaviour.  As in Canada it is only a small number of chariites who are comitting serious misconduct - however, the damage that those few charities can cause to the sector can be substantial. 

New OECD handbook boosts anti-money laundering efforts and helpful for Canadian charities

The OECD Money Laundering Awareness Handbook for Tax Examiners and Tax Auditors can be found at:
http://www.oecd.org/document/46/0,3343,en_2649_33767_43841326_1_1_1_1,00.html

Canadian Charities to receive easier access to their info with CRA My Business Account (MyBA) access

The Charities Directorate of CRA has just announced that Canadian Charities can receive easier access to their info with CRA My Business Account (MyBA) access.