Ethics and Canadian Charities

March 18, 2009

Canadian National Avoid a Charity Scam Day

For those interested in celebrating National Avoid a Charity Scam Day you might find this interesting.

March 18, 2009

Charity Scams in Canada - Costing Us All A Lot

Here is some statistical information on Charity Scams - Costing Us All A Lot.  Just to give some perspective far more funds flow to charity tax avoidance schemes in Canada than to all the money spent by Canadian charities on relieving poverty in the developing world!!

March 17, 2009

Tax Havens Cause Poverty

If you are interested in assisting reduce or eliminate extreme poverty and you want more than writing a cheque to fix a symptom of a problem then you might find this note interesting.  Various groups have highlighted the importance of tax havens in undermining foreign governments in their development work by being a mechanism by which the wealthy can avoid paying taxes.  What does government in Canada provide to us?  Schools, hospitals, universities, social safety net, police.  Imagine what Canada would look like if we had almost no tax revenue.  Within a decade or two there would be no schools, hospital, universities, social safety net, police etc.

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March 01, 2009

National Committee for Responsive Philanthropy (NCRP) “Criteria for Philanthropy at its Best”

The National Committee for Responsive Philanthropy (NCRP) has recently prepared a report entitled “Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact”.  The report is geared towards US foundations but is equally relevant to Canadian foundations.  It will no doubt be controversial.

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February 26, 2009

Obama Budget to drastically reduce tax incentives for the wealthy who donate to charity

February 25, 2009

OECD Report on Abuse of Charities for Money Laundering and Tax Evasion - Canada does very poorly

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

T3010B - New CRA Canadian Charity Information Return for 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.

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February 21, 2009

Millennium Charitable Foundation Case - Federal Court (FCA) not impressed with charity tax shelters

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.

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February 15, 2009

Ethiopian Law Will Affect Canadian Charities Operating in Ethiopia

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.

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February 15, 2009

Canadian charities and pharmaceutical donations -some ethical issues

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.

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February 12, 2009

Workshop on Minimum Standards for Education in Emergencies (MSEE), and Crises- by CIDA and STC

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.”

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February 07, 2009

Canadian Charity Donation Tax Shelters Make No Financial Sense - or any other sense

February 01, 2009

Political Activities and Canadian Charities -Some CRA Policies and letters on political activities

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.

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January 27, 2009

CRA calls an apple an apple - Project Trident

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.”

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January 27, 2009

Canadian Charities and Political Activities - OCIC presentation

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.

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January 19, 2009

NGO Code of Conduct for Health Systems Strengthening is Useful for NGOs in health area

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.”

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November 30, 2008

CRA Warning to charities: no lending of charitable registration numbers

November 04, 2008

CRA Revokes Choson Kallah Fund of Toronto as tax shelter donation arrangement

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.

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September 26, 2008

Charity questions for our political parties in this 2008 Canadian election

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.

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September 15, 2008

How Much Should A Canadian Charity Spend on Overhead such as Fundraising and Administration?

Here is my updated article on “How Much Should A Canadian Charity Spend on Overhead

This note discusses why low overhead may not be a good thing for a charity and what is appropriate.

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September 06, 2008

Fundraising and Grantmaking from Canada - Legal Issues

Here is a copy of a powerpoint presentation Blumbergs recently delivered to a US 501(c)(3) on Fundraising and Grantmaking from Canada

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July 02, 2008

Redeemer Foundation v. M.N.R. (F.C.A.)- Federal Court agrees with CRA on audit powers with charities

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.

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April 14, 2008

Banyan Tree Foundation, law firm Fraser Milner Casgrain sued for $55m in class action lawsuit

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.

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April 03, 2008

Has the regulation of Canadian charities operating outside of Canada become increasingly burdensome?

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.

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April 01, 2008

Fundraising Policy for Canadian Registered Charities by CRA

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

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

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.

mark@blumbergs.ca
416.361.1982
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