What's New from the Charities Directorate of CRA

July 04, 2009

CRA publishes warning on issuing official donation receipts for gifts of services by Charities

CRA has just published a reminder to charities that “Issuing receipts Caution: Gifts of services.  A registered charity is not permitted to issue an official donation receipt for a gift of service. At law, a gift is a voluntary transfer of property. Gifts of services (donated time, skills, or efforts) provided to a charity are not property, and therefore do not qualify as gifts for the purposes of issuing official donation receipts.”

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July 01, 2009

Is transfer of proceeds to Canadian registered charity a gift? CRA discusses one situation

June 30, 2009

Consultation on the Proposed Guidance on Activities Outside of Canada for Canadian Reg. Charities

CRA has just released “Consultation on the Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities”. CRA is seeking input and comment by September 30, 2009.  The Consultation was at http://www.cra-arc.gc.ca/chrts-gvng/chrts/cnslttns/ccrc-eng.html [It has now moved to http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cnslttns/ccrc-eng.html]  Here is a permanent copy of the Consultation on the Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities   Proposed Guidance on Activities Outside of Canada for Canadian Registered Charities in PDF and here is a larger font printable version

I recently prepared a paper on an earlier draft of the guidance at:

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June 26, 2009

Canada Revenue Agency Guidance on Fundraising by Canadian charities

[Here is CRA’s 2012 updated fundraising guidance information - http://tinyurl.com/8x99n2j ] CRA has just released its Guidance on Fundraising by Canadian charities.  You can see the document in English at:  http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-eng.html and in French at:
http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-028-fra.html It is 35 pages at 9.5 font.  To make it easier to read I here is my slightly larger font (13 point font) version of the Guidance on Fundraising from CRA which is placed it in one PDF document if that helps anyone who wants to save it to their laptop or desktop and make notes on the document.  For those who find it more convenient the Charity Law Information Program (CLIP), which is supported in part by funding from the Canada Revenue Agency, has taken the main document and inserted the content of the “Additional Information” directly next to the part of the the Guidance it is referring to. A reader can read the guidance from beginning to end without having to jump backwards and forwards between the two documents. The CLIP version of Fundraising Guidance is at: http://www.capacitybuilders.ca/files/resources/CRA_Fundraising_Guidance_1259599283.pdf
Whatever version you wish to use - this is a guidance document that anyone involved in governance and fundraising of charities should review.

For those that are interested in knowing more about the Fundraising Guidance as well here is a free 1 hour webinar on the CRA Fundraising Guidance - you can download it here https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=440027&rKey=482cc2c6dcf99042&act=pb

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June 24, 2009

CRA discusses split receipting of donations to a church

This CRA letter discusses when a registered charity (a church), will fund the attendance of children to a week long camp that is associated with the church and when the children that will attend the camp are not children of the church members and otherwise deal at arm’s length with the members whether the donations would be considered to be gifts.

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June 24, 2009

CRA provides comments on split receipting and donations when child benefits

The CRA recently discussed when a charity that provides affordable housing for people with intellectual disabilities is to receive a donation from a parent then “Can a charitable tax receipt be issued when parents make a donation to the charity to ensure accommodation for their child?”

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June 01, 2009

CRA Charity Checklist on Terrorism

Here is a “Checklist for Charities on Avoiding Terrorist Abuse” put out by the Charity Directorate of Canada Revenue Agency.  It is a concise and helpful tool for charities to use to ensure that their resources are not misused by those who support or are involved with terrorism.  Many charities tell me that terrorism is not an issue for them - in fact the precautions suggested in this checklist are just as important for charities to understand and impliment to avoid money laundering, tax evasion, and general missappropriation of resources for non-charitable purposes.  Terrorism is local as well as international.  (for example the FLQ and the Oklahoma City bombing).  http://www.cra-arc.gc.ca/chrts-gvng/chrts/chcklsts/vtb-eng.html

May 31, 2009

Canada Revenue Agency publishes sample T3010B and sample financial statements - very helpful

The CRA has just published a sample: T3010B, Registered Charity Information Return, with accompanying forms and financial statements.  This will be very helpful to charities as the T3010B is a new form.

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May 31, 2009

Sample Financial Statement for Canadian Charity on CRA website

If you are looking for a sample financial statement for a Canadian charity CRA has just published one of their website.  Every Canadian charity in addition to filing the T3010 Registered Charity Information Return needs to file with that return a financial statement.

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May 28, 2009

CRA charity webinars take off -now webinar on T3010B on June 3 2009

CRA has been piloting charity webinars recently. I understand that they have had a very good reception and that on the last e-mail announcement 400 people signed up in less than 2 hours.  Here is information on their past webinars and future ones if you are interested.

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May 28, 2009

CRA Releases Registered Charity Newsletter 32 - discusses new applications, T3010B, webinars,

Here is the latest CRA Registered Charity Newsletter # 32.  It includes an extensive discussion on applications for charity status and how to improve your application and avoid unnecessary delays.  It sets out the procedures that CRA will follow upon receiving a charity application.

May 28, 2009

Triumphant Church of Christ Intl. v. The Queen (FCA) -quick revocation not denial of natural justice

This case deals with a church who lost its charitable status for lack of proper record keeping.  We learn from this case that because CRA moves quickly to revoke status does not mean that the “requirements of natural justice and procedural fairness” are not respected.  In this case the court found that the appellant was given several opportunities to respond to the concerns that CRA and they in their response did not satisfy CRA.

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May 28, 2009

Christ Apostolic Church of God Mission International - compliance agreement and revocation

In the Christ Apostolic Church of God Mission International v. Canada (National Revenue) (2009 FCA 162) A-287-08, Date: May 20, 2009 the Federal Court of Appeal upheld a revocation by the Canada Revenue Agency of this church’s charitable status.  This church had signed a “compliance agreement” and then the CRA withdrew the compliance agreement after an audit that showed non-compliance by the church.  The court concluded “It was open to the Minister, after reviewing the audit report, to conclude that the appellant’s non-compliance was so substantial that it could not be remedied by the promises made by the appellant in the compliance agreement.”  Organizations that sign a compliance agreement must remember they will be held to a high standard and they must be extra careful to abide by the provisions of the compliance agreement. As well if you sign a compliance agreement during an audit and at the end of the audit the CRA or the Minister after receiving the report decide that the conduct was particulary problematic they may revoke the compliance agreement and move to take away the charity’s status.  Many charities view a compliance agreement as the end of their worries - in fact signing a compliance agreement is the beginning of a path of having to run a charity at a much higher level than what was done before or you will almost certainly in the near future lose your charitable status.

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May 26, 2009

T3010A and T3010B CRA forms now saveable and fillable

CRA just advised that certain T3010 forms on their Charities and Giving Web site, have been improved so that they are now saveable in addition to being fillable.  By downloading the fillable/saveable PDF version of the form charities can save their work as they go, print the completed form and mail it to the Charities Directorate.

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May 19, 2009

The House of Holy God - all that is sweet is not always charitable

Another title could be “Maple Syrup Business is not always charitable”.  Many American comedians were concerned with the departure of George Bush that they would not have jobs, or at least their jobs would become more difficult.  Never fear- if there is nothing to laugh at in the US you can always come up to Canada.  In The House of Holy God case the courts had to work really hard to decide whether a charity registered for advancement of religion could be solely engaged in the business of producing and selling maple syrup and maple syrup products.  The court found on the particular facts that the maple syrup business with paid employees is not a related business, and because it was run by paid employees (not 90% volunteers) it was not allowable.  The Court noted “In particular, the record does not contain any evidence that the carrying on of a maple syrup business is an element of religious doctrine.”  Registered charities need remember that even if all of the profits of the business are dedicated to charitable objects that does not make it a related business that can be carried out by the charity.  The Court did not find CRA’s conclusion that the maple syrup business is not a related business unreasonable.

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May 13, 2009

Holy Alpha and Omega Church of Toronto Case - fraudulent tax receipts

This case is not that interesting except for the facts.  A church is accused of being involved with the fraudulent sale of official donation receipts, CRA is revoking their charity status, the church is asking for a stay of the revocation, CRA is asking to put in another affidavit and the court is saying no more affidavits lets get to the hearing.  I guess we will find out how this turns out.

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May 13, 2009

Charitable receipts for orchestra trip and annual membership dues for orchestra

CRA in this letter to a charity outlines their position that a charity can issue official donation receipts for amounts when fixed amounts are paid by persons participating in an organized orchestra trip as long as all advantages are subtracted from the value of the donation receipt.  As well where annual membership dues are paid by members towards the general operations of the Orchestra they can receive a official donation receipt minus the advantage.  I think at some point CRA should develop a more robust position on when it is appropriate for a charity to be paying for travel expenses.  This is an area of concern - we saw Universal Aide but there are a lot more complicated situations were charities are issuing donation receipts for expensive international travel and it is more in the grey zone.  When in doubt, either as to the amount of an advantage or the appropriateness of issuing a tax receipt, a charity should not issue a tax receipt or contact CRA and get their advice.

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May 12, 2009

CRA successfully attacks abusive charity gifting tax shelters

According to CRA In 2008, the value of charity tax shelter gifting arrangements has been reduced by 1/2.  This is an important victory for CRA in curbing some of the more extreme charity tax shelter arrangements.

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May 09, 2009

CRA Consultation on Protection of Human Rights and Charitable Registration

The CRA has just released a Consultation on proposed Guidance on the Protection of Human Rights and Charitable Registration  CRA is asking those interested to provide comments on the draft guidelines.  The consultation will be of particular interest to those involved with human rights or the issue of political versus charitable.  The consultation will close on July 31, 2009.  The consultation can be found at:

May 08, 2009

CRA cracking down on charities not filing financial statements with T3010

Canadian charities must file a copy of their financial statement along with the T3010 Registered Charity Information Return.  In the past CRA was not as strict about this requirement but now they are following up on it more as people can ask CRA for a copy of a charities financial statement and CRA needs to make it available.  Make sure you file your financial statements along with the T3010 or you will get a notice like this ...

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May 06, 2009

The Philanthropist - excellent legal and philanthropic resource is now free

The Canadian legal and philanthropic publication The Philanthropist is now both online and FREE.  You just need to register and will find some very good articles on different issues affecting charities and non-profits in Canada.  You can reach the website at:  http://www.thephilanthropist.ca/index.php/phil/index   While you are at it you can check out my new article on Mergers and Amalgamations within the Canadian Non-Profit and Charity Sector.

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May 04, 2009

Clergy Residence exemption does not apply to religious leader at religious school

Is a rabbi at a Jewish school entitled to the clergy residence exemption?  Although he may be a member of the “clergy” he is not in charge of, or ministering to, a diocese, parish or congregation, according to this CRA income tax ruling.

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May 01, 2009

Supreme Court dismisses appeal with costs for Choson Kallah Fund of Toronto

The Supreme Court of Canada has dismissed an appeal with costs by the Choson Kallah Fund of Toronto to a Federal Court of Appeal decision which I had written on previously at:
http://www.globalphilanthropy.ca/index.php/blog/cra_revokes_choson_kallah_fund_of_toronto/ and http://www.globalphilanthropy.ca/index.php/blog/canada_revenue_agency_deregistering_record_number_of_questionable_canadian_/ and
http://www.globalphilanthropy.ca/index.php/blog/millennium_charitable_foundation_case_fca_not_impressed_with_charity_tax_sh/  This is an important victory for those who do not want the charity sector in Canada to be overrun by tax avoidance and evasion schemes.  It also shows that with abusive charity tax schemes the Supreme Court is prepared to allow CRA to immediately revoke the charitable status rather than allowing them to keep their status while appealing all the way to the Supreme Court.

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May 01, 2009

CRA Checklist on Canadian Charities avoiding terrorism

The CRA has just published a very helpful page entitled “Checklist for Charities on Avoiding Terrorist Abuse” and it can be found at:

April 28, 2009

Draft Consultation on Proposed Guidance on Advancement of Religion as a Charitable Purpose

Here is a copy of a draft paper delivered by Terry de March, Director General of the Charities Directorate, at a conference in Australia.  At some point in the future CRA may have a consultation on this topic and the document may or may not be similar to this draft.  Here is the Draft Consulation on Proposed Guidance on Advancement of Religion as a Charitable Purpose from the Charities Directorate of the Canada Revenue Agency

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


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.

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