The Canadian Foundation for Tamil Refugee Rehabilitation was revoked for cause. It was accused of supporting groups that operate as a support network for the LTTE which is a listed terrorist organization. Here are some things that one can draw from these letters:
1) The importance of doing your due diligence and ensuring that you are not connected with organizations that are either directly or indirectly involved with or supporting terrorism. This is especially important when you are operating in a country in conflict where there are publicly available reports of the involvement of a particular organization in supporting terrorism.
2) Canadian registered charities need to maintain “direction and control” over their activities otherwise they may be construed as being a “conduit”. There is nothing wrong with a Canadian charity, if it has the right objects, spending 100% of its funds outside of Canada but it must maintain direction and control over the funds unless they are funding a small number of foreign qualified donees. For more information see: http://www.globalphilanthropy.ca/index.php/blog/comments/cras_new_guidance_on_foreign_activities_by_canadian_charities
3) Canadian charities conducting foreign activities must maintain, in Canada, adequate books and records.
4) Registered charities must have all the mandatory elements on their receipts.
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.