The Charities Directorate has vastly improved its section of the CRA website over the last year, although it still has a way to go!. In the past they have improved the quality and accessibility of information placed on the site. CRA has recently improved the ability of Canadians to search their database of charities as we discuss in more detail. If you have not viewed the Charity Directorates website recently it is well worth visiting.
Here is the December edition of the Blumbergs Canadian charity law e-mail list. If you wish to receive a copy of the Blumbergs Canadian Charity Law List then please sign up at the Blumbergs’ Newsletter Page. It takes about 10 seconds and it is free. The Blumbergs Canadian Charity Law List is sent every month or two and it has the latest information for Canadian non-profits and charities on legal and ethical issues. Comments are always appreciated.
This entry discusses whether social enterprise, social innovation, social financing or community economic development (CED) is charitable.
Charities do a lot of great work. But with over 85,000 of them, and a few hundred bad apples amongst the lot, there will be times that you will be disappointed in a charity. When you have a concern about a charity or a charity does something wrong here are some ideas about how you can complain.
Here is a copy of my presentation Global Philanthropy: Canadians and Canadian Charities and Foreign Activities that I delivered to the Estate Planning Council of Toronto.
The problem of abusive charitable tax shelters using the developing world as a marketing tool continues. It just goes to show the importance of dealing with credible and legitimate charities if you want to make the world a better place.
The CRA has reminded charitable organizations (not foundations) that these charitable organizations will beginning in 2009 have to in addition to other disbursement quota requirements need to spend 3.5% of the value of all of their property the charity has that is not used directly in charitable activities or administration.
This brief article discusses the Charitable Goods Policy of the Canada Revenue Agency.
This FAQ looks at whether there are residency requirements for Canadian charities.
This note discusses why low overhead may not be a good thing for a charity and what is appropriate.
Canadian registered charities need to scrupulously avoid involvement with partisan political activity. In this brief note we cover CRA policy statement CPS-022 on political activity by charities and CRA’s Advisory on Partisan Political Activities. It is really important for Canadian charities to understand the policy statement and advisory for two reasons: 1) failure to do so can result in a charity losing its charitable status; and 2) many charities can in fact do more allowable political activities than they currently do but they misunderstand CRA’s views on this important topic and they think that CRA disapproves of all “political” activity, which is clearly not the case. Full Article in PDF
Here is a copy of a powerpoint presentation Blumbergs recently delivered to a US 501(c)(3) on Fundraising and Grantmaking from Canada
This case dealt with whether the Charities Directorate of CRA requires judicial authorization to request certain information from a registered charity and CRA won the appeal. The CRA note headnote/summary is below.
It looks like Industry Canada will be making a second attempt to pass a new federal non-profits act to replace the Canada Corporations Act. It will be called the Canada Not-for-profit Corporations Act (NFPC).
The Canada Revenue Agency has recently been sending out a new form letter to some applicants for charitable registration which appear to have foreign activities requesting they provide greater detail in terms of the foreign activities. Here is a copy of a sample letter from CRA. The letter is worth reading and I would emphasize the importance of providing sufficient detail of the proposed foreign activity as well as a draft agreement for any structured arrangements.
The law firm of Scarfone Hawkins LLP in Hamilton has recently brought a class action lawsuit against a number of parties for their involvement with the Banyan Tree Foundation including the law firm of Fraser Milner Casgrain. It will be interesting to see how this case turns out. I predict that there will be other cases against other law firms that have been involved with preparing opinion letters for transactions that CRA considers to be “shams”. The allegations in the statement of claim have yet to be proved in court.
I often read commentators talking about the ‘increased burden’ placed by Canada Revenue Agency on Canadian charities operating abroad or the ‘increasingly complicated’ administrative rules. I then scratch my head and wonder what increased burden and what increased rules? The CRA has not modified RC4106 since 2000 (almost 8 years) and since the publication of that document the CRA has in fact provided greater leeway to registered Canadian charities in operating abroad for example charities that are umbrella organizations. The CRA has also provided clarifications in newsletters on various issues that they have been asked about. The CRA has also made far greater efforts to educate charities about compliance issues for Canadian charities operating abroad including through a recent educational partnership with certain charities.
Here is my article which discusses the Consultation on Proposed Policy on Fundraising by Canadian Registered Charities (RC4456-e).
Here is a link to http://www.cra-arc.gc.ca/tax/charities/consultations/fundraising-e.html which is the CRA’s “Consultation on proposed policy on fundraising by Registered Charities.” This is a 6 page document and apparently there will be another document forthcoming that is about 40 pages in length that will add to the overview document.
Here is a copy of a presentation on April 1, 2008 by Neil Cochrane and Peter Broder of the Charities Directorate of the Canada Revenue Agency to the Ontario Bar Association entitled CRA Fundraising Policy Overview.
CRA has prepared two publications namely Donations by Canadians to Prescribed Universities Outside Canada (RC191-07) and Information for Educational Institutions Outside Canada (RC190-07). These recent publications will be of interest to foreign universities interested in fundraising in Canada and Canadian students studying at certain prescribed foreign universities.
Essentially Canadian individuals and trusts may in certain cases claim a non-refundable tax credit when they donate to certain “prescribed” universities outside Canada. As well corporations may be able to deduct a donation to these “prescribed” universities. The list of prescribed universities is located in Schedule VIII of the Canadian Income Tax Regulations under the Canadian Income Tax Act.
Links to the documents at the CRA website are Donations by Canadians to Prescribed Universities Outside Canada (RC191-07) and Information for Educational Institutions Outside Canada (RC190-07).
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.