Imagine Canada has announced that their original "Ethical Code Program" is being merged with their new Standards Program. They are notifying charities that "The Program will remain open, and participants may continue to use the trustmark, until December 31, 2016. After that date, however, all references to the Ethical Code Program, including the trustmark, will need to be removed from your website."
For some charities they will just remove the Ethical Code Program information. Other charities may be considering whether they should apply to the more rigourous, time consuming and costly Standards Program. An application for the Standards Program is between $500 to $6000 and their is a similar annual renewal fee every year that must be paid to maintain involvement in the Standards Program.
For some organizations the Standards program can be an informal guide to better operations and they do not feel the need to formally adopt the program. For others by formally adopting it, it can add structure and rigour and encourage a discussion of certain issues. It can be a signal that the organization is holding itself to a higher standard. As Imagine Canada notes:
“The Standards Program is first and foremost a capacity-building initiative. Any organization may use these standards to improve and monitor its practices. Information about how to comply with the standards, as well as tools and resources to help organizations continue to strengthen their practices, is available free of charge. Organizations wishing to demonstrate publicly that they meet the standards can participate in a voluntary peer-review-based accreditation process.”
For other organizations that are not complying with certain basic Income Tax Act or fiduciary compliance obligations, trying to comply with the Standards Program can be a huge distraction from those important compliance requirements. Their time and effort may be better spent on those basic requirements like accurately filing the T3010, issuing appropriate receipts, changing their charitable objects if they are no longer appropriate, maintaining appropriate direction and control when working with non-charities, etc. Other organizations have governance concerns (like dysfunctional boards or membership) that should be dealt with on an urgent basis before embarking on an application for a standards program.
Also remember that once an organization formally adopts these voluntary standards they are no longer "voluntary". As some clients of mine have learned the media is concerned when charities profess to follow certain standards but then do not actually fulfill that commitment. There are potential compliance risks of professing to comply with over 70 standards.
We have assisted numerous charities in weighing the pros and cons of formally adopting the Imagine Canada Standards Program and in changes to their compliance system to accommodate the many requirements of that Standards Program. There is no one size fits all answer when it comes to the adoption of any voluntary standards program.
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.