We assist Canadian charities, their staff and boards of directors, to understand their legal and ethical obligations when operating a Canadian registered charity and provide insights and information to non-Canadian charities interested in operating or fundraising in Canada.
The charitable sector in Canada has become more challenging. It is highly competitive with over 86,000 Canadian registered charities. As well donors, regulators, media, the public as well as other stakeholders, have increasingly high expectations of charities and how they operate. We assist charities in Canada grapple with these important legal and standards issues.
We recently obtained a copy of the CRA analysis of charities that disclosed on the T3010 they did political activities. In a note from Bryan McLean, Director of Policy, Planning and Legislation Division of CRA to Cathy Hawara the then current Director General of the Charities Directorate, Mr. McLean includes a summary of the percentage of Canadian charities that identified on the T3010 that they conducted political activities and also the names of those charities.
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.
Last week we posted the CRA Compliance Framework for Files with Identified Political Activities. Now here is the draft CRA Assessment of Charities Directorate Political Activities Audit Program against Oct 2012 Compliance Framework. It was prepared by the Charities Directorate of the CRA around September 17, 2014 to review how the Charities Directorate was doing in relation to the October 2012 compliance framework.
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.
Here is a CRA document provided under access to information rules which includes their media response on Canadian charities and funding or supporting terrorism. Not surprisingly because of the very limited scope for CRA to divulge information under the confidentiality provisions of the Income Tax Act (Canada) there is little information divulged.
Here is a copy of the CRA Compliance Framework for Files with Identified Political Activities from the Charities Directorate of the CRA. It is dated October 9, 2012. It provides some answers to some of the questions around how were charities identified for audit. Next week we will post a follow up document namely the "Assessment of Charities Directorate Political Activities Audit Program against October 2012 Compliance Framework".