The CRA Fundraising Guidance, is CRA's main document dealing with the obligations of registered charities when it comes to fundraising. The CRA Fundraising Guidance was initially published in 2009 but then significantly updated on April 20, 2012. At the bottom of each page on the CRA website it notes the last date in which the document was updated. In the case of the Fundraising Guidance it shows the last update was on June 16, 2014. I wondered what had been changed. There appears to be only one important addition - a new footnote to add an Ontario case in which a fundraiser was charged and convicted of fraud.
The main change in terms of content was a new footnote dealing with the Gour Decision which we have covered on this blog. I will start with the text that was not changed:
"42. Examples of illegal fundraising activities are those that are criminally fraudulent (Footnote15), or violate federal or provincial statutes governing charitable fundraising, charitable gaming, the use of charitable property, or consumer protection. Included in this category is fundraising that involves issuing improper donation receipts, which is contrary to the Income Tax Act. (Footnote16)
The new Footnote 15 states:
The Court of Appeal for Ontario in R. v Adam Gour,  ONCA 51, at paras. 8 and 9 confirms that not disclosing important facts constitutes "other fraudulent means" in the offence of fraud as that term is explained in s. 380(1) of the Criminal Code. The Court goes on to state that not disclosing the handsome commissions that were being paid to the apparent "volunteers" constituted hiding a fundamental and essential element of the fundraiser-contributor relationship, and that this failure to disclose could mislead the reasonable contributor. The Court adds that not disclosing the status (volunteer v. employee) of a canvasser will not be relevant in every charitable fundraising context, but that in R. v Gour there was extensive evidence that the appellant ran his team of canvassers in a manner intended to mislead the public.
The Gour Decision is important because it highlights that in addition to regulation by the CRA under the Income Tax Act, and the Attorney General's office in Ontario through the Charities Accounting Act, there is also the possibility that fundraisers who are alleged to deliberately mislead donors by lying about certain important information can be potentially charged with fraud.
Another update to the Fundraising Guidance was in Schedule B which deals with "Allocating fundraising expenditures". This is an important but often overlooked schedule that applies to all organizations even if they don't fundraise. It discusses how a charity should allocate expenses which may have different purposes such as charitable, fundraising, admin, political or other. it is much simpler than the 2009 explanation of allocation.
The part of political content used to read:
134. Political content of an activity will directly or indirectly:
· attempt to retain, change, or oppose a law or policy in Canada or abroad: or
· sway public opinion on social issues.
135. For more information on allowable political activities, go to Policy Statement CPS-022, Political Activities.
Now it links directly to a new page that CRA established on political activities which has a link to their Policy Statement CPS-022, Political Activities. The new wording reads:
134. Political content of an activity typically fits the description of a political activity. See Resources for charities about political activities.
The CRA page on political activities also now has some videos and tools. Also I noticed "A Political Activities PowerPoint Presentation is available upon request. If you would like a copy to share with your organization, email the Charities Web and Outreach Section."
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.