Here are the Ontario Public Guardian and Trustee’s Tips for Managing Fundraising Risks.
Canadian charities operating in North Korea must pay close attention to Canadian sanctions. These sanctions were recently tightened.
The Charities Directorate of the Canada Revenue Agency just released a fillable T2050 Application for charitable status which will make it easier for organizations to complete the form and presumably make it more legible. You can obtain a copy of the form at http://www.cra-arc.gc.ca/E/pbg/tf/t2050/README.html Although the form may look simple, and is now easier to fill in, it is actually a form covering many different areas of charitable law and it is often a good idea to get some legal advice and assistance with incorporation and applying for charitable status.
Here is a revised CRA “Questions and Answers” for charitable registration http://www.cra-arc.gc.ca/chrts-gvng/chrts/pplyng/fqr-eng.html
Here is a CIDA Issues Paper on Corporate Social Responsibility (CSR) and extractive sector (mining, oil). Well worth reviewing for those interested in international development and the importance of natural resources.
Here is a copy of the Annotated T3010B http://www.capacitybuilders.ca/clip/clip-resources.php from CLIP. It will be updated periodically to include different information from different sources.
Here is a copy of a recent letter from CRA with respect to gifts by Canadians to U.S. charitable organizations. It summarizes CRA’s views on the subject.
In late July 2009 CRA changed the 2008 T2050 form to the new T2050 (09) - they added a few blank pages to the 2008 revised application form for example for the description of activities.The new form can be found at: http://www.cra-arc.gc.ca/E/pbg/tf/t2050/
Imagine Canada just released “A Proposal to Implement Voluntary Standards of Excellence in Canada’s Voluntary Sector”. The full document can be found at: http://www.imaginecanada.ca/files/www/en/standards/standards_proposal_july_2009.pdf
I recently read a short article by Adam Rothwell of Intelligent Giving in the UK. He argues that UK charities are not very transparent. I am not sure that the situation is any different here in Canada.
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario.
To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit www.canadiancharitylaw.ca or www.globalphilanthropy.ca
Have you ever had trouble finding information on the CRA’s website relating to charities? Well the site has really improved over the last couple of years and is a lot more user friendly. However, here is a suggestion if you are looking for a document on the CRA website. Go to google and if you are are looking for information on disbursement quota type in the following:
disbursement quota site:http://www.cra-arc.gc.ca/chrts-gvng/chrts/
That will search the charity directorate website in English for documents that have the words disbursement and quota - if you want the phrase “disbursement quota” try putting it all in quotation marks “disbursement quota”. Now I must admit that finding documents on disbursement quota is not going to help you actually understand anything about it - for that you need to speak to Elena Hoffstein! Unfortunately there is only so much that CRA and its webmaster can do - the rest is in the hands of Finance.
CRA has just published a reminder to charities that “Issuing receipts Caution: Gifts of services. A registered charity is not permitted to issue an official donation receipt for a gift of service. At law, a gift is a voluntary transfer of property. Gifts of services (donated time, skills, or efforts) provided to a charity are not property, and therefore do not qualify as gifts for the purposes of issuing official donation receipts.”
David Baines, a reporter with the Vancouver Sun, recently wrote an article on a telemarketing firm Xentel DM Inc.. It is entitled “Charity fundraisers not so charitable”. The article is at http://www.vancouversun.com/health/Charity+fundraisers+charitable/1450998/story.html or http://74.125.93.132/search?q=cache:nNTR88K0xPUJ:www.vancouversun.com/story_print.html%3Fid%3D1450998%26sponsor%3D+xentel+vancouver+sun&cd=1&hl=en&ct=clnk&gl=ca
I recently read a draft paper entitled Regulating Self-Regulation in the Charitable Sector: Innovation or Contradiction? by Susan D. Phillips, Professor and Director of the School of Public Policy and Administration at Carlton University. It is very well written and thought provoking discussion of self-regulation of the non-profit and charitable sectors in Canada and the limitations and opportunities for self-regulation.
The article is at: http://www.anser-ares.ca/files/conf09/Phillips_ANSER2009.pdf
The new Canada Not-for-profit Corporations Act has just received royal assent on June 23, 2009. The act has yet to be proclaimed in force and it will come into force on a day or days to be fixed by order of the Governor in Council. It is difficult to know when the bill will come into force. It could be 3-6 months or it could be a year or more. Industry Canada will have a lot of work to do with the regulations, forms, fees etc. Once the act comes into force current Canada Corporations Act corporations will have 3 years to continue into the new act assuming that no change or extension is made to the act. There will be a lot of material prepared by non-profit associations as well as professional advisors and others to assist CCA corporations with the transition. It makes little sense for most CCA non-profits to start worrying about this act until there is greater clarity and more time has elapsed.
CRA has just released “Consultation on the Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities”. CRA is seeking input and comment by September 30, 2009. The Consultation was at http://www.cra-arc.gc.ca/chrts-gvng/chrts/cnslttns/ccrc-eng.html [It has now moved to ]http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cnslttns/ccrc-eng.html] Here is a permanent copy of the Consultation on the Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities in PDF and here is a larger font printable version
I recently prepared a paper on an earlier draft of the guidance at:
http://www.globalphilanthropy.ca/index.php/blog/cra_consultation_on_foreign_activities_-_some_key_points/
[Here is CRA’s 2012 updated fundraising guidance information - http://tinyurl.com/8x99n2j ] CRA has just released its Guidance on Fundraising by Canadian charities. You can see the document in English at: http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-eng.html and in French at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-fra.html It is 35 pages at 9.5 font. To make it easier to read I here is my slightly larger font (13 point font) version of the Guidance on Fundraising from CRA which is placed it in one PDF document if that helps anyone who wants to save it to their laptop or desktop and make notes on the document. For those who find it more convenient the Charity Law Information Program (CLIP), which is supported in part by funding from the Canada Revenue Agency, has taken the main document and inserted the content of the “Additional Information” directly next to the part of the the Guidance it is referring to. A reader can read the guidance from beginning to end without having to jump backwards and forwards between the two documents. The CLIP version of Fundraising Guidance is at: http://www.capacitybuilders.ca/files/resources/CRA_Fundraising_Guidance_1259599283.pdf
Whatever version you wish to use - this is a guidance document that anyone involved in governance and fundraising of charities should review.
For those that are interested in knowing more about the Fundraising Guidance as well here is a free 1 hour webinar on the CRA Fundraising Guidance - you can download it here https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=440027&rKey=482cc2c6dcf99042&act=pb
This CRA letter discusses when a registered charity (a church), will fund the attendance of children to a week long camp that is associated with the church and when the children that will attend the camp are not children of the church members and otherwise deal at arm’s length with the members whether the donations would be considered to be gifts.
The CRA recently discussed when a charity that provides affordable housing for people with intellectual disabilities is to receive a donation from a parent then “Can a charitable tax receipt be issued when parents make a donation to the charity to ensure accommodation for their child?”
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario.
To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit www.canadiancharitylaw.ca or www.globalphilanthropy.ca
Cassels Brock & Blackwell has just been hit with a major lawsuit over a tax shelter scheme. Here is a copy of the Statement of Claim in Lipson v Cassels Brock Blackwell LLP. None of the allegations in the statement of claim have been proven in court.
The CRA has just published a sample: T3010B, Registered Charity Information Return, with accompanying forms and financial statements. This will be very helpful to charities as the T3010B is a new form.
CRA has been piloting charity webinars recently. I understand that they have had a very good reception and that on the last e-mail announcement 400 people signed up in less than 2 hours. Here is information on their past webinars and future ones if you are interested.
Here is the latest CRA Registered Charity Newsletter # 32. It includes an extensive discussion on applications for charity status and how to improve your application and avoid unnecessary delays. It sets out the procedures that CRA will follow upon receiving a charity application.
This case deals with a church who lost its charitable status for lack of proper record keeping. We learn from this case that because CRA moves quickly to revoke status does not mean that the “requirements of natural justice and procedural fairness” are not respected. In this case the court found that the appellant was given several opportunities to respond to the concerns that CRA and they in their response did not satisfy CRA.
In the Christ Apostolic Church of God Mission International v. Canada (National Revenue) (2009 FCA 162) A-287-08, Date: May 20, 2009 the Federal Court of Appeal upheld a revocation by the Canada Revenue Agency of this church’s charitable status. This church had signed a “compliance agreement” and then the CRA withdrew the compliance agreement after an audit that showed non-compliance by the church. The court concluded “It was open to the Minister, after reviewing the audit report, to conclude that the appellant’s non-compliance was so substantial that it could not be remedied by the promises made by the appellant in the compliance agreement.” Organizations that sign a compliance agreement must remember they will be held to a high standard and they must be extra careful to abide by the provisions of the compliance agreement. As well if you sign a compliance agreement during an audit and at the end of the audit the CRA or the Minister after receiving the report decide that the conduct was particulary problematic they may revoke the compliance agreement and move to take away the charity’s status. Many charities view a compliance agreement as the end of their worries - in fact signing a compliance agreement is the beginning of a path of having to run a charity at a much higher level than what was done before or you will almost certainly in the near future lose your charitable status.
What are the hallmarks of a good charity. Boy that is hard. Easier to know what are the hallmarks of a bad charity. Well luckily the UK Charity Commission has come up with the following 6 hallmarks for a good charity. Except for the English accent, these hallmarks would seem to be equally relevant and useful here in Canada. Staff and directors of charities might find it useful to read the hallmarks and ask ‘does our charity live up to this?’. By the way this is not pass/fail - it is more a matter of continual improvement no matter how good we are.
Another title could be “Maple Syrup Business is not always charitable”. Many American comedians were concerned with the departure of George Bush that they would not have jobs, or at least their jobs would become more difficult. Never fear- if there is nothing to laugh at in the US you can always come up to Canada. In The House of Holy God case the courts had to work really hard to decide whether a charity registered for advancement of religion could be solely engaged in the business of producing and selling maple syrup and maple syrup products. The court found on the particular facts that the maple syrup business with paid employees is not a related business, and because it was run by paid employees (not 90% volunteers) it was not allowable. The Court noted “In particular, the record does not contain any evidence that the carrying on of a maple syrup business is an element of religious doctrine.” Registered charities need remember that even if all of the profits of the business are dedicated to charitable objects that does not make it a related business that can be carried out by the charity. The Court did not find CRA’s conclusion that the maple syrup business is not a related business unreasonable.
This case is not that interesting except for the facts. A church is accused of being involved with the fraudulent sale of official donation receipts, CRA is revoking their charity status, the church is asking for a stay of the revocation, CRA is asking to put in another affidavit and the court is saying no more affidavits lets get to the hearing. I guess we will find out how this turns out.
CRA in this letter to a charity outlines their position that a charity can issue official donation receipts for amounts when fixed amounts are paid by persons participating in an organized orchestra trip as long as all advantages are subtracted from the value of the donation receipt. As well where annual membership dues are paid by members towards the general operations of the Orchestra they can receive a official donation receipt minus the advantage. I think at some point CRA should develop a more robust position on when it is appropriate for a charity to be paying for travel expenses. This is an area of concern - we saw Universal Aide but there are a lot more complicated situations were charities are issuing donation receipts for expensive international travel and it is more in the grey zone. When in doubt, either as to the amount of an advantage or the appropriateness of issuing a tax receipt, a charity should not issue a tax receipt or contact CRA and get their advice.
If you require legal advice with respect to Canadian or Ontario non-profits or charities please contact Mark Blumberg
