Over the last 10 or more years, we have published over 2500 blog posts. Except for a few avid readers, that might be a little overwhelming so we have started to create a directory of some of the top resources for Canadian charities. This will be particularly helpful for those who are new to registered charity compliance issues or to the charity sector.
In this article "Top 68 CRA Reasons for Denying your Canadian Registered Charity Application" we have obtained from CRA a list of some of the most common and not so common reasons for CRA to be concerned with a charity application.
Being a director of a Canadian registered charity is an important task and this article Top Tips for Serving as a Director of a Canadian Registered Charity may be helpful in explaining some of the expectations and requirements of the position.
Here is a new checklist from Blumbergs that will assist Canadian registered charities either interested or currently conducting foreign activities. It is called Canadian Charity Foreign Activity Legal Checklist - Working with Foreign Charities or Intermediaries 2017.
There are approximately 32,000 registered charities in Canada that are religious charities. They account for approximately 40% of all the registered charities in Canada. It is important that Canadian registered charities are aware of CRA‘s views on what is religion and when are activities of religious charities that are ostensibly religious not in fact “advancing religion”. Or when are such activities providing undue private benefit. We just obtained a copy of CRA's draft Guidance Advancement of religion and charitable registration and it is important that charities and others interested in this topic are aware of the guidance.
Although the CRA has little guidance on internal controls, they are increasingly focusing on internal controls, or the lack thereof, in charities. Internal controls are "a procedure or policy put in place by management to safeguard assets, promote accountability, increase efficiency, and stop fraudulent behavior." A simple example is having two people sign cheques or having two people count cash. I am hoping that one day CRA will provide greater guidance on their expectations surrounding internal controls but for now here are some thoughts and suggestions.
You can subscribe to the Blumbergs' Charity Law List here. It is a great way for directors and staff of non-profits and charities to keep on top of developments affecting the non-profit and charity sector.
Here is a note I prepared called Some recent blogs on charities and political activities by Mark Blumberg. Yes I know the title is very original. I came up with it myself.
We have just released our Blumbergs' Canadian Charity Sector Snapshot 2015. Lots of interesting statistics and information on the Canadian charity sector. As well if you want information on individual charities or want to sort charities based on about 20 criteria checkout our charity data site at www.charitydata.ca.
In August 2016 we launched a website to improve transparency on Canadian registered charities. It is at www.charitydata.ca We have just made a number of improvements to the website.
CRA uses a risk based approach to deciding which charities are to be audited. CRA a few months ago announced they are adjusting their audit strategy to focus more on larger Canadian registered charities. I guess someone in the past might had thought that smaller organizations, many without any staff, might be less legally compliant and they should be focused on. I guess someone now at the Charities Directorate has worked out that larger organizations have a large amount of resources, generally a lot more complexity and are more likely to be non-compliant with the requirements of the Income Tax Act and such non-compliance could affect much larger amounts of resources.
The work that charities do is extremely important to our society, so it is vital that various stakeholders, such as the public, the media, the government, donors, employees, boards, donors and others. have access to key information on what the charity is doing and how it is doing it. In general transparency will ultimately increase public trust and confidence in the sector by making the public more informed about the work of charities and making it more difficult for people to misuse charities. However, from a legal perspective registered charities have few requirements in terms of transparency. Registered charities must file a T3010 Registered Charity Information Return with a financial statement and various schedules with the CRA every year.
The Liberal Government has made some noises about modernizing charity law. Who could be opposed to modernization? As there is no idea as to what "modernization" means, it has opened up all sorts of calls for changes to charity law in Canada - many of the ideas would be expensive, counterproductive, stifling, or ultimately destroy the positive reputation of the charity sector. Wikipedia defines a Pandora's box as "a process that generates many complicated problems as the result of unwise interference in something." Although only time will tell, it appears that "modernizing charity law" has a small upside and a very large downside.
The Chartered Professional Accountants of Canada (CPA Canada) have released today a booklet entitled 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers. It is located on this CPA Canada page. It is written by Andrea Cohen Barrack, CEO of the Ontario Trillium Foundation (OTF), Canada’s largest granting foundation, and Mark Blumberg, a charity lawyer and partner at Blumberg Segal LLP and editor of www.globalphilanthropy.ca, www.canadiancharitylaw.ca, smartgiving.ca and charitydata.ca
The Charities Directorate of the Canada Revenue Agency ('CRA') recently developed an infographic to help charities remember their T3010 filing deadlines. CRA is in the process of introducing new and different ways to encourage voluntary compliance for Canadian registered charities. The T3010 is an annual filing that must be completed annually by registered charities within six months of the charity's fiscal year end. We often review T3010 filings for our clients. It is the most important transparency document for Canadian registered charities.
We are compiling a list of Canadian cases dealing with charities, gifting and related issues. Let us know if you have any other suggestions:
Here is an article entitled Canadian Charities Conducting International Activities (2015). It will be of interest to Canadian charities that are, or considering, operating outside of Canada.
The British Columbia Supreme Court recently released a decision, Re Mulgrave School Foundation, which discusses charitable gifts that are made for a specific charitable purpose and whether it is possible to change that purpose. Unfortunately, in this case the donors and schools had restricted their gift to be an endowment for scholarships and they did not have in the agreement a power to amend the restrictions.
Here is a link to an article I wrote entitled "Selecting Great Charities – only tough if your eyes are open" which recently appeared on the CanadaHelps website.
Here is a sample contractor agreement for a Canadian registered charity conducting foreign activities. One of the elements of having direction and control for a foreign intermediary is to have a written agreement. Therefore it is important that charities have such a written agreement.
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.