My article was reprinted in the Canadian Fundraising & Philanthropy eNEWS at http://www.canadianfundraiser.com//newsletter/article.asp?ArticleID=2930&ClientID=13785 Of course they cleaned up the grammar and logic!
The Federal Court of Appeal (FCA) recently dealt with a case called The Millennium Charitable Foundation (The Millennium Charitable Foundation vs. MNR 2008 FCA 414). In The Millennium Charitable Foundation case the law firm of Miller Thomson LLP, which represented the Foundation, apparently stated or inferred that the Foundation was a “legitimate charity”. I am not sure exactly what a “legitimate” charity is, it certainly is not a defined term in the Income Tax Act, but I think it is worth considering whether The Millennium Charitable Foundation is a “legitimate charity”.
Tax havens and tax evasion costs governments, including Canada, the US and those in the developing world a substantial amount of revenue. Although it undermines Western governments these tax havens devastate the capacity of many Southern countries to provide basic services to their own people. At the upcoming G20 meeting financial regulation and stopping tax haven secrecy will be at the top of the agenda. If the US loses $100 billion in tax revenue every year from tax havens, then how much does Canada lose every year? Why not take the money currently lost and use it to increase grants and contributions to the Canadian charitable sector?
Tuberculosis (TB) kills about 1.7 million people every year. The Canadian government has just announced spending about 127 million to fight TB.
In March 2009 the Alberta Council for Global Cooperation (ACGC), in partnership with the Wild Rose Foundation, had Angus Reid conduct a poll of Canadians. Despite the global economic crisis, it appears that there is substantial support for various actors including federal and provincial governments, NGOs and others, tackling the issue of global poverty. In the poll they found that 89% of Canadians say they believe “Canada should be addressing global poverty in some way, with three-in-ten (29%) actually placing global poverty as a higher priority than local issues.”
CRA just put out a easy to read and understand list of “Factors that will prevent an organization from being registered as a charity”. Perhaps CRA put out this list because with 4000 new organizations putting in applications every year to become registered charities, some of whom are not understanding what a charity is or restrictions on the activities of a charity, they wanted to make it clearer what will not qualify and hopefully they will receive better applications, or fewer, and this will reduce the backlog. I think however that the list has an even more important purpose.
The Canadian parliament is once again considering passing the Canada Not-for-profit Corporations Act. If it is passed it will affect 19,000 Canadian federal corporations that are incorporated under federal law. The Bill is currently in the Industry, Science and Technology Committee.
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.
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.
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.
In this article, I look at and criticize a sensationalist and inaccurate article in the Ottawa Citizen entitled “Downturn will sink 10,000 non-profits: think-tank: ‘We’re just beginning to see blood in the pool,’ expert warns”.
The Foundation Center’s Interactive Map of Direct Grants by U.S. Grantmakers to Non-US Recipients is helpful to see how almost $7 billion dollars worth of grants went from the US to non-US charities etc. It may be helpful to Canadian charities interested in working with a US foundation on an international project. Global giving is not a one way street- US Foundations Supporting Canadian Charities.
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.
Ontario charities incorporated under the Ontario Corporations Act can save time and energy by filing one new directors and officer form instead of two, beginning when the Ontario corporation has a fiscal year end in 2009.
This is a very interesting story of one donation to a non-profit.
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.
Here is an interesting report from the Canadian Centre for Philanthropy (now Imagine Canada) entitled “An Analysis of Canadian Philanthropic Support for International Development and Relief” by Don Embuldeniya, David Lasby and Larry McKeown dated January 2002.
Here is part of a draft of the new T3010B which was included in a recent Bulletin of the CCCC. This part relates to the T3010B questions on foreign activities by Canadian charities with some of my comments in red.
New_T3010_Questions_on_foreign_activities_from_Blumbergs.pdf
This article deals with the recent Canadian Federal Court of Appeal case Hostelling International Canada – Ontario East Region in which the Federal Court of Appeal upheld the CRA decision to revoke their charitable registration. Under the Canadian Income Tax Act, charitable organizations and public foundations can carry on “related business” that promote their charitable objects. An example would be a hospital cafeteria - providing food to patients and visitors. They can also carry on other unrelated business activities if “substantially all” (CRA says at least 90%) of the people involved in these activities are volunteers. Here is my article on
Canadian Charities and Business Activities and a copy of the decision in the federal court of appeal Hostelling International Canada – Ontario East Region
There has been a lot of attention on the ups and downs of the market. Generally people who are heavily invested in the market feel good when their shares go up and not so good when their shares go down. Those wanting to buy shares don’t mind the price coming down as it will make it cheaper for them to purchase shares. Although charities worry that a downturn in the market will result in a precipitous drop in donations, the US statistics over the last few decades show that has not happened. Irrespective of the ups and downs of the market the needs remain and philanthropists understand that a worsening economy may result in an increase in the needs.
This short note discusses why a major gift combined with a bequest to a Canadian registered charity may be more tax effective than just a bequest to that same charity.
Here are some interesting quotes on philanthropy.
Here are some statistics from the CRA dealing with the 83,000 registered charities in Canada as of the end of 2007.
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.
mark@blumbergs.ca 
416.361.1982
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