Blumbergs Canadian Charity Law List - July 2010 - special edition on foreign activities by charities
Posted under News | What's New from the Charities Directorate of CRA | Canadian Charity Law | Global Giving | Ethics and Canadian Charities | Avoiding 'Charity' Scams
Here is my July 2010 Blumbergs Canadian Charity Law List. To sign up just provide your e-mail address at: http://www.canadiancharitylaw.ca/index.php/pages/subscribe/
CRA has just released a new guidance entitled “Canadian Registered Charities Carrying out Activities Outside Canada”. This guidance replaces RC4106 which dates back to before September 11, 2001. Although the name of this new guidance 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 dealings with, for example, a non-profit that does not have charitable status then the same rules apply as for a Canadian charity dealing with a foreign entity. As well, almost all organizations outside of Canada are non-qualified donees. If your charity is going to transfer resources to a non-qualified donee then your charity needs to maintain “direction and control” over those resources. This document 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 transferred and/or revocation of charitable status.
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 Capacity Builders website at http://www.capacitybuilders.ca/clip/clip.php.
The recent Air India report highlighted the vulnerability of some Canadian charities having their resources diverted for inappropriate purposes, including but not limited to terrorism. Here is an article with some simple suggestions for preventing misuse of your charity’s resources.
If you are confused about what is “direction and control” when conducting foreign activities or what is the difference between a conduit and an appropriate structured arrangement then you might find this article interesting.
Finding foreign activities complicated? In this article we set out in 2 pages the basic flow of a Canadian charity conducting foreign activities using a contractor intermediary.
Here is an article we wrote last year when CRA published a consultation draft of the guidance on foreign activities. This article discusses changes between the 2001 document, RC4106, and the consultation draft and gives the reader a bit of an indication of the evolution over the last 10 years.
The CRA has just released a revised version of their document “Donations to Prescribed Universities Outside Canada”. It has helpful information for foreign universities interested in being designated a “prescribed university”. Although this document just hints at it - it is vitally important that these prescribed foreign universities strictly follow the Canadian rules dealing with providing an official donation receipt for a “gift”. Failure to do so could result in your donor not getting the Canadian tax benefits they had hoped for. As well, prescribed universities can be removed from the list and if that happens it is unlikely they will ever be recommended for reinclusion. I have prepared webinars and presentations on the subject and if you want a basic webinar on appropriate receipting you can find it at: http://www.capacitybuilders.ca/clip/clip.php
Here are some free archived webinars from the Charity Law Information Program (CLIP). CLIP is supported by a contribution from the Charities Directorate of the Canada Revenue Agency. This is a great way for an officer, board member, or volunteer to learn about compliance issues.
CRA’s Charities Connection #3 deals with charities affiliated with service clubs, recent HST changes and how to adjust the CRA’s website font sizes.
On July 14, yesterday, the Charities Directorate revamped its website. The main changes are to the URLs or web page addresses of many documents. Make sure that you update your links and bookmarks.
http://www.globalphilanthropy.ca/index.php/blog/comments/accountant_liability_for_recommending_charity_tax_shelter_gifting_scheme_-_/ 12) Interesting case on accountant liability for referral of client to charity tax shelter scheme
Professional advisors should be careful about referring clients to any tax shelters, let alone extremely risky charity tax shelter gifting arrangements.
I made a presentation to the Non-Profit and Voluntary Sector Management and Governance course at Carleton’s Centre for Voluntary Sector Research and Development in July.
I led two workshops for the Charity Law Information Program (CLIP) on two hot legal issues - Fundraising Compliance and Appropriate Receipting. One was in Toronto at the CNIB and the other in Ottawa at the United Way.
On July 27, 2010 I will be delivering a presentation on advocacy and political activities for Canadian international development charities.
I will also be doing a number of workshops across Canada in the coming months. For more information see: http://www.capacitybuilders.ca/clip/clip.php
I hope that you found the above material helpful and please feel free to forward the e-mail newsletter to anyone you think may be interested. They can also sign up for the BLUMBERGS non-profit and charities law newsletter at http://www.canadiancharitylaw.ca/index.php/pages/subscribe/
For further information on legal resources for Canadian Non-Profits and Charities please visit [url=http://www.canadiancharitylaw.ca]http://www.canadiancharitylaw.ca[/url] or [url=http://www.globalphilanthropy.ca]http://www.globalphilanthropy.ca[/url]
If you are on Twitter you might want to follow me at: http://twitter.com/canadiancharity Surprisingly I now have about 340 followers on Twitter.
If you want general information on registered charities in Canada you might find the archived webinars at Capacity Builders helpful http://www.capacitybuilders.ca/clip/clip.php