Ethics and Canadian Charities
February 25, 2009
The OECD Report on Abuse of Charities for Money Laundering and Tax Evasion is well worth reading for anyone who cares about the Canadian charitable sector. On my quick read of the report it seems that Canada has probably more charity tax evasion than any other country. The complete report is at: http://www.oecd.org/dataoecd/30/20/42232037.pdf I will be writing an article on the ethics of professional advisors, especially charity lawyers, being involved with advising and defending charity tax evasion schemes.
February 23, 2009
The Charities Directorate of the Canada Revenue Agency has revised their form T3010A with a new form called the T3010B, and it is supposed to be used by Canadian charities for fiscal years ending in 2009.
February 21, 2009
The Millennium Charitable Foundation Case deals with abusive charitable gifting schemes. The Federal Court of Appeal (FCA) sided with CRA in this matter. It is well worth reading for anyone concerned with the charity sector.
February 15, 2009
The Proclamation for the Registration and Regulation of Charities and Societies was passed by the Ethiopian government. It will limit the activities and funding by foreign NGOs and charities. It will make it harder for some foreign NGOs to operate in Ethiopia. Canadian Charities operating in Ethiopia should review whether the legislation will affect their operations. Essentially it sets out tough penalties for those who do not follow the law. It restricts certain areas of activity including gender or ethnic equality, human and democratic rights, the strengthening of judicial practices or law enforcement, or conflict resolution to only Ethiopian NGOs who are receiving less than 10% of their funding from outside of Ethiopia.
February 15, 2009
There are many legal and ethical issues with the donation of pharmaceuticals to developing countries. In this note I will touch upon some of the ethical issues.
February 12, 2009
This CIDA and Save the Children Canada workshop sounds really interesting on “Understanding and Using the Minimum Standards for Education in Emergencies (MSEE), Chronic Crises and Early Reconstruction.”
February 01, 2009
Most of CRA’s view on political activities by Canadian charities can be found in Policy Statement CPS-022 Political Activities. (see Political Activities (CPS - 022) located at http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-022-eng.html I highly recommend that any charity considering conducting any activity that could be construed as political, review in detail the CPS-022 Policy Statement on Political Activities.
January 27, 2009
CRA has launched a new initiative called “Project Trident” in which they are targeting the “Triple Threat Tax Fraud” namely “identity theft, charities?related fraud, and tax preparer fraud.”
January 27, 2009
In order for Canadian charities to effectively achieve their objects or mandate they often need to engage in some “political” activities, especially when the objects or mandate require the assistance and support of government. It is important for Canadian charities to understand the types of activities that are allowed and those that are prohibited. This presentation will discusses: *the importance of political activities conducted by charities, especially in the context of international development; *expenditure limitations on political activities for registered Canadian charities under the Income Tax Act (“10% rule”) and CRA rules; *effect of political activities on disbursement quota; *the difference between allowable political, charitable, and prohibited activity and examples of each; *the difference between public awareness, educational activities, and political activities; *use of non-profits to increase political expenditures and activities; *lobbyist registration requirements for Canadian non-profits and charities interacting with the federal government.
January 19, 2009
There has been a dramatic increase in interest amongst North American NGOs in health issues in the developing world. Often well intentioned actions create more problems than they solve. According to those responsible for creating the NGO Code of Conduct for Health Systems Strengthening “It is now becoming clearer that NGOs, if not careful and vigilant, can undermine the public sector and even the health system as a whole, by diverting health workers, managers and leaders into privatized operations that create parallel structures to government and that tend to worsen the isolation of communities from formal health systems.”
November 04, 2008
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.
September 26, 2008
Although charities are greater than 10% of our economy in a federal election the charitable sector gets between 0 and 0.01 of the attention. We spend a lot of time talking about sweaters. In this blog I ask a few rhetorical questions (as no one is actually going to respond!) about some public policy issues involving charities.
July 02, 2008
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.
April 14, 2008
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.
April 03, 2008
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.
April 01, 2008
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.
March 22, 2008
Every year the Canadian Council for International Co-operation hosts a discussion forum and this year it was on the Paris Declaration and aid effectiveness. There are some interesting notes on equitable North/South CSO relations at http://ccic.ca/e/docs/002_aid_2008-02_roundtable_6.pdf As well Brian Tomlinson of the Canadian Council for International Co-operation delivered a speech a few month ago entitled “North / South CSO relations - A Northern Perspective” at http://ccic.ca/e/docs/002_aid_2007-08_harnosand_speech.pdf
January 31, 2008
The CRA recently posted their top ten list of why applications for charitable status will not be successful. It was placed in a Consultation document entitled “Charitable Work and Ethnocultural Groups - Information on registering as a charity “. As an aside the last time I saw a study on the difference between applications for charitable status that were accepted by CRA and those that were rejected the most important factor correlating with acceptance was use of a lawyer. Although one does not need to use a lawyer, the process is anything but straightforward. If one is going to use a lawyer it is important to use a lawyer who is knowledgeable about charity law and especially important if you plan on conducting activities outside of Canada that the lawyer be familiar with CRA requirements for Canadian charities operating abroad. Just one little example they cite for denying an application “The application does not include any copy of an agreement with representatives who are supposed to help the organization to carry out its activities outside Canada.” CRA expects when one files an application that references foreign activities to be carried out under a structured arrangement (agency, joint venture, cooperative partnership, contractor) that in fact the agreement be attached. This comes as a surprise to some including experienced practitioners. Also they don’t mean some nice looking agreement - they mean an agreement that complies with ALL the requirements in RC4106. Some may see this as harsh - however, if an organization takes shortcuts and does not have the resources and advisors to put in an appropriate application for charitable status it is not difficult to imagine that some of those same people may take shortcuts later when the charity is operating.
January 04, 2008
Although the law, governance and ethics are closely intertwined there is little written about ethics of Canadian charities operating abroad. Here are some links that may be of assistance to Canadian charities that operate outside of Canada to understand some of the ethical issues that they may have to deal with.
December 06, 2007
This European Foundation Centre and the Council on Foundations guide on Disaster Grantmaking sets out principles of good disaster management for charities, foundations and corporations.
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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