Here is the Toronto Charity Law Information Program Conference brochure

OCIC, myself and Capacity Builders will be organizing a free one hour webinar entitled “Haiti - Legal and Ethical Issues for Canadian charities responding to the earthquake”  As we are all aware with the earthquake in Haiti, Canadians have responded quickly and donated generously.  Canadian charities have received record contributions to help with the disaster in Haiti.  Many of the charities raising funds for Haiti have never operated in Haiti and/or been involved in disaster assistance. We have learned from past disaster responses in post-conflict areas that good intentions and money are not enough.  Join charity lawyer Mark Blumberg (editor of http://www.globalphilanthropy.ca) as he highlights some of the top legal and ethical challenges facing Canadian registered charities operating in Haiti.  From Income Tax Act rules to ethical dilemmas it is important that charities are aware of these and other issues.  https://ocsa.webex.com/tc0505l/trainingcenter/register/registerSession.do?confID=847738481&siteurl=ocsa&currentTime=1265727600000&sessionNO=0&backUrl=https%3A%2F%2Focsa.webex.com%2Fcmp0306l%2Fwebcomponents%2Fcalendar%2Fcalendar.do%3Fsiteurl%3Docsa%26serviceType%3DTC%26tabType%3Dupcoming%26ownerID%3D0%26pageNum%3D1%26timezoneID%3D0%26orderBy%3DstartTime%26orderType%3Dasc%26year%3D2010%26month%3D1%26date%3D4%26showpast%3Dfalse%26showreg%3Dfalse  For all Capacity Builder Webinars you can see https://ocsa.webex.com/mw0306l/mywebex/default.do?siteurl=ocsa

It may take a while to know the full story but so far the headlines are “Baptist group accused of child-trafficking in Haiti ” http://www.theglobeandmail.com/news/world/haiti/baptist-group-accused-of-child-trafficking-in-haiti/article1450829/ or “Haiti ‘orphans’ case: Misunderstanding or kidnap?” from the BBC.

Here is a reminder from the Charities Directorate of CRA that one registered charity should not issue an official donation receipt to another registered charity.  So for example if a foundation gives another registered charity funds the recipient charity does not provide an official donation receipt.

Here is the schedule for Being Good at Doing Good:  Safeguarding Yourself and your Charity in a Complex World.  There is an amazing line up of speakers. CLIP_Conference_Schedule.pdf    Check out the topics and speakers and register while you can at http://www.capacitybuilders.ca/clip/conference/index.php for the early bird rate for this CLIP conference.  Here is a flyer if you want to circulate to your charities, their boards, volunteers and staff.  Flyer for Being Good at Doing Good

For information on the conference see: http://www.capacitybuilders.ca/clip/conference/index.php  The conference is sponsored by the Canada Revenue Agency and I am helping Capacity Builders organize this charity conference.

The Canadian Government recently announced that they will be lifting the cap of $50 million for matching funds. 

Earthquake in Haiti:  Québec Announces That Donations Made by February 28, 2010 Will Be Deductible in 2009

Here are some suggestions for donating to a Canadian charity in a disaster such as we recently saw in Haiti.

Here is a press release from the law firm Scarfone Hawkins LLP on this case.  The defendants are Rochester Financial Limited, Promittere Capital Group Inc., Promittere Asset Management Ltd., Banyan Tree Foundation and national law firm Fraser Milner Casgrain LLP.  Here is the Scarfone Hawkins LLP press release dated Jan 21 2010.  Here is a copy of the Reasons for Decision of Justice Lax dated January 19 2010

To help with Haiti Relief the Charities Directorate of the Canada Revenue Agency will temporarily be working on weekends “Note: As a temporary measure, the Charities Directorate is providing additional telephone service for donors and charities who want information about donations toward earthquake relief in Haiti. The telephone service is now extended to weekends, from 9 a.m. to 5 p.m. Eastern Time.”  This is an excellent idea and will be helpful to many Canadians.  http://www.cra-arc.gc.ca/whtsnw/tms/rthqk-haiti-eng.html

Recently a US Report on major embezzlements by Marquet International was released.  The report covers only one type of fraud namely embezzlement or the misappropriation of resources by an employee or agent of an organization for his or her own purposes.  What is interesting is first the high number of non-profits who suffer from embezzlements.  “Non-profit and religious organizations accounted for more than 11 percent of all the incidents, consistent with our 2008 findings.”

Here is some useful information from the Canadian Department of Foreign Affairs on why it is better to donate cash rather than goods during a disaster.

The Haiti Earthquake shows quite vividly how difficult and complicated international charitable activities can be.  From logistical issues to security, careful planning, preparation and having the requisite experience and people on the ground are important.  At an upcoming conference in Toronto called Being Good at Doing Good (http://www.capacitybuilders.ca/clip/conference/index.php), supported by the Canada Revenue Agency, there will be extensive discussion of how charities must be careful to maximize their organization’s effectiveness and prevent your resources from being misused both locally and internationally.  There will be a number of excellent speakers and topics on the difficulties and requirements for international operations and some of them will incorporate updates and lessons learned from Haiti.

Keep the lines and internet sites busy.  Donate to reputable, experienced, knowledgeable Canadian aid organizations that already have operations in Haiti such as the members of the Humanitarian Coalition (http://www.thehumanitariancoalition.ca/) or Doctors Without Borders Canada (http://www.msf.ca/)  Here is an article on the outpouring of support by Canadian donors.

Here is a CBC article on how scammers and cyber criminals are trying to exploit the generosity of people. Save yourself the disappointment and embarrassment and if you are interested in helping people in Haiti donate to an experienced Canadian aid organization that has operations in Haiti such as the members of the Humanitarian Coalition (http://www.thehumanitariancoalition.ca/)  or Doctors Without Borders Canada (http://www.msf.ca/)

Here is some information from CIDA with respect to their Haiti donation matching program
http://www.acdi-cida.gc.ca/acdi-cida/ACDI-CIDA.nsf/eng/JOS-114172324-U9P

One release is a caution encouraging Canadians to be an informed donor and see part of the CRA website on being an informed donor.  The other is a reminder that in a disaster the urge by some to set up a new organization may not be the best course of action may be to donate or help “existing qualified donees (e.g., other registered charities) that have the experience, resources, and infrastructures already in place to respond rapidly and effectively in such locations.”  http://www.cra-arc.gc.ca/whtsnw/tms/rthqk-haiti-eng.html  I very much agree with such advice. 

There are many different ways that you can help.  One way is to make a donation to the Humanitarian Coalition.  The Humanitarian Coalition is comprised of CARE Canada, Oxfam Canada, Oxfam-Québec and Save the Children Canada.  These four agencies are working together to address the devastation caused by the earthquake.  http://www.thehumanitariancoalition.ca/

The CRA put out a Tax Alert today - they identified that in the last fiscal year (2008-2009) they had “reassessed over 20,000 individuals who had participated in at least 1 of 20 unacceptable tax shelter gifting arrangements.”  Also they noted in the Tax Alert that when they prosecuted for fraud or tax evasion “Convictions were obtained in 98% of the cases prosecuted.”  If you have been bamboozled by a charity gifting tax shelter promoter consider making a voluntary disclosure under the VDP. 

I will be speaking on “Ensuring Good Board Governance and Basic Legal Compliance for a Canadian Foundation” at the 7th Annual Foundation, Endowment & Not For Profit Investment Summit organized by the Strategy Institute http://www.strategyinstitute.com/021710_feni7/Foundation_2010.pdf

As of 2009 Canadian charities need to file the T3010B form for year ends after January 1, 2009.  For almost all charities they have no more use for the T3010A.  CRA has removed the old T3010A form because so many charities were mistakenly filing the t3010A when in fact they should be filing the T3010B Anyway there are reasons that one may want to look at a T3010A including if you are making application for reregistration and you are required to complete the T3010A or you are wondering about the CRA database and what number aligns with what question.  Anyway CRA has done a good job hiding the form to keep it away from you those who might mistakenly use it.  Here is a copy of the T3010A if you require http://www.cra-arc.gc.ca/formspubs/prioryear/t3010a/README.html

The preliminary schedule for Being Good at Doing Good:  Safeguarding Yourself and your Charity in a Complex World was released today http://www.capacitybuilders.ca/clip/conference/documents/PreliminarySchedule.pdf  Check out the topics and speakers and register while you can for this CLIP conference.

The Charities Directorate of the Canada Revenue Agency has put an open call for people to comment on existing policies and guidance of the Charities Directorate.  For a number of years the CRA engaged in extensive consultation with the sector and this is a continuation of that effort. 

Through the Charity Law Information Program I will be delivering over 30 online webinars over the next two months. They are priced at $25 per webinar. The webinars are listed at http://www.capacitybuilders.ca/clip  Here is a coupon code xq42k that allows you to register for free for any webinar as long as the registration takes place before February 1, 2010.  http://www.capacitybuilders.ca/clip/clip.php

The CRA has updated its guide P113 Gifts and Income Tax for 2009.  For the document see http://www.cra-arc.gc.ca/E/pub/tg/p113/README.html  This document will be of interest to donors, their professional advisors and charities.

My CanadianCharity channel on Twitter is growing rapidly.  I have 117 people following me (and most are not even family)  You can access it at http://twitter.com/canadiancharity  It covers legal, ethical and practical issues with charities in Canada.  A great way to keep up to date if you have a Twitter account.  Some other ways of keeping up to date are to join CRA’s mailing list at http://www.cra-arc.gc.ca/esrvc-srvce/mllst/sbscrbchrts-eng.html  (it takes exactly 4.5 seconds).  You can also join the Blumbergs Charity Law mailing list at http://www.globalphilanthropy.ca/index.php/pages/subscribe/  for monthly updates.  It takes about 10 seconds to sign up - well worth the investment of time! [I now have 145 followers on Twitter as Jan 18, 2010]

In 2009 I attended the Interaction Forum held in Washington, D.C.  The Interaction Forum is the largest gathering of US and international NGOS involved with international development.  I met some very interesting people and learned quite a lot.  One of the important themes of the conference is that security is increasingly important concern for charities doing international operations – security for your employees, expat workers, national staff and beneficiaries.  To summarize, for those who do not want to read more than one paragraph - aid organizations who don’t not take security seriously probably should be getting out of the humanitarian aid area.  Your employees will not want to work for you, funders will not want to fund you and you may be unnecessarily endangering the lives of national staff and beneficiaries.  I was reminded of this a couple of weeks ago when I reviewed a large CIDA draft contribution agreement - what was interesting was that in project conducted in a moderately dangerous country about 1/4 of the contribution agreement related to security and safety. 

In Newsletter 33, CRA identified various registered charities that have had their registered charity status revoked for involvement in tax shelter gifting arrangements.

The CRA noted in Newsletter 33 that they are accepting comments on their new Guidance CPS-028.

The CRA has updated its publication “Donations to Prescribed Universities Outside Canada”  http://www.cra-arc.gc.ca/E/pub/tg/rc191/rc191-09e.pdf 

CRA Income Tax Technical News No. 41 was released December 23, 2009 and discusses rulings (opinions) on proposed legislative amendments, the definition of “Tax Shelter” – Subsection 237.1(1) and donation of flow-through shares – subparagraph 38(a.1)(i), subsection 248(35) through (41) and section 237.1

I am helping organize the CLIP conference Being Good at Doing Good: Safeguarding Yourself and Your Charity in a Complex World Feb. 22-23, 2010 in Toronto.. It promises to be a very exciting and affordable two day conference with many interesting speakers from around the world providing thoughts on governance, ethics, financial management, internal controls and foreign activities for Canadian charities. Here is a partial list of speakers that was just posted http://www.capacitybuilders.ca/clip/documents/SpeakerListing_Dec15.pdf and if you want to register you can go to http://www.capacitybuilders.ca/clip/clip-news.php  For updates see http://www.capacitybuilders.ca/clip/conference/index.php 

Here is a copy of a report on terrorist financing entitled Financial Action Task Force Report on Terrorist Financing

From the basic to the indepth there are numerous resources on the web that can help Canadian charities avoid money laundering and terrorism.

Here is an interesting report from the Financial Action Task Force (FATF) on COMBATING THE ABUSE OF NON-PROFIT ORGANISATIONS International Best Practices from 2002.  It highlights the importance of transparency in non-profit sectors and financial management in thwarting abuse of charities.

Here is a sample fraud policy from the UK Charity Finance Directors’ Group.  While Canadian non-profits and charities do not need to have a fraud avoidance policy this example may be of use to some and certainly being aware of the content is advisable.  It is estimated that fraud costs Canadian non-profits at least 5% of revenue. 

Here is an interesting booklet from the CSAE and RBC on Preventing_fraud_in_Not_for_Profit_Organizations.pdf

I will be co-chairing this morning session on February 16, 2010.  I will also be delivering a presentation on “Top 15 Legal and Ethical Concerns for Charities in Ontario - Red, White and Yellow Flags”

Here are copies of the handouts for a number of recent presentations that I have delivered for the Charity Law Information Program (CLIP)

Cultural property is one type of gift that a donor can make to a charity.  Certain certified cultural property has certain additional benefits associated with its donation. 

Registered Charities Newsletter No. 33 was just released by the CRA today.  It has some very useful information on receipting.  Also CRA will be accepting submissions with respect to the fundraising guidance before April 2010.  If you have ideas for improvements send them to CRA - I am also interested in this issue and if you want to send me a copy that would be great.  CRA also discusses charities involved with abusive tax schemes. 

On December 3, 2010 there was a Third Reading of the Good Government Bill (C-212) and it was carried and the bill passed.  Royal Assent was given to the Good Government Act, 2009 on December 15, 2009 and therefore the Charitable Gifts Act (Ontario) is no longer.

I am so excited and it is not that I am going away on vacation today for a week.  The new T3010B Registered Charity Information Return, which is filed by Canadian charities for fiscal year ends beginning January 1, 2009 are now available online.  Until yesterday it was only the T3010A (the old registered charity information return) that was available.  There is a lot of additional information in the T3010 that is really exciting and provides stakeholders in the charity sector greater information on the individual charities and by aggregation the whole sector.

Here is a copy of my presentation CRA’s Fundraising Guidelines –Legal, Ethical and Practical Issues A presentation to the Association of Fundraising Professionals (AFP) GTA Congress 2009 in Toronto

CRA announced that “Enhancements have been made to the Alphabetical index of topics, including the addition of summary policies (CSPs).”  You can find the Alphabetical Index of Topics at http://www.cra-arc.gc.ca/tx/chrts/a-tpcs-eng.html

An article I wrote entitled “CRA Guidance on Fundraising: AN OPPORTUNITY TO IMPROVE FUNDRAISING PRACTICES IN THE SECTOR” was published in PERSPECTIVES ON CANADIAN PHILANTHROPY by the Offord Group.  The publication can be downloaded from http://www.theoffordgroup.com/

I am often asked “When should a Canadian charity not issue a “official donation receipt” (tax receipt)?”  First of all Canadian charities do not have to issue tax receipts - however, if they are going to issue official donation receipts, commonly known as tax receipts, then the registered charity must ensure that it is only issuing the receipt for a “gift” and subtracting any “advantage” that the donor may receive. If in doubt call CRA or contact a charity lawyer.  Here is a list of transactions that generally do not result in a tax receipt being issued. 

I recently attended the Interaction Forum held in Washington, D.C. on July 6-9, 2009.  The Interaction Forum is the largest gathering of US ngos involved with development.  I met some very interesting people and learned quite a lot.  Here are some of my learnings from the Interaction Forum ...

You can find the Nantel v. The Queen (TCC) decision in French at http://decision.tcc-cci.gc.ca/fr/2009/2009cci599/2009cci599.html  According to the headnote it involved the valuation of a donation to a charity of a number of pieces of art that were bought by the donor about 10 years before the donation to a charity.  CRA disputed the donors valuation and ultimately brought in their own valuator.  Court had problems with two valuators brought in by the donor and court accepted the valuation by the CRA’s valuator which was approximately 1/6 of the donor’s valuators’ opinion. 

After the new Canada Not-for-profit Corporations Act comes into force (probably around 2011) Canadian federal charities under the Canada Corporations Act that wish to continue existing will have a further three years to continue (essentially to covert) under the new Canada Not-for-profit Corporations Act

No.  The new Canada Not-for-profit Corporations Act requires that corporations have members however the board of directors and the members can be identical as is often the case with Canadian charities.

I am not even going to try to answer this issue.  I tried before to deal with Subsection 16(3) and got the answer wrong.  I am excerpting a piece from a paper entitled Insight on C-4, the New Canada Not-for-profit Corporations Act By: Wayne Gray, who is a partner at McMillan LLP, Toronto. http://www.mcmillan.ca/waynegray to answer the question.

The New Canada Not-for-profit Corporations Act while passed has not come into force yet.  The experts best guess (see Wayne Gray below) is early 2011 for it coming into force.

Can a Canadian non-profit under 149(1)(l) earn a profit.  Does it matter if the profit is intentional and/or will be used to further the organization’s purposes? 

In Maréchaux, F.M.E. v. The Queen the case revolved around whether F. Max E. Maréchaux, was entitled to a charitable donation tax credit.  Maréchaux is a lawyer at the law firm Miller Thomson LLP. http://www.millerthomson.com/index.cfm?cm=Employee&ce=details&primaryKey=16425  CRA had disallowed the donation claiming it was not a gift.  The appeal which relates to the 2001 taxation year and the tax court dismissed his appeal with costs and ruled for CRA.  Mr. Maréchaux was represented in his unsuccesful appeal by David W. Chodikoff, another lawyer at Miller Thomson LLP.  According to the case “The Program was implemented on December 31, 2001, with 118 participants (“Participants”) and donations totalling approximately $18,305,000.”  You can read the full case at:  F._MAX_E_._MARECHAUX_v_._Her_Majesty_the_Queen_.pdf [The courts issued a revised judgment on December 4, 2009 and here it is F._MAX_E_._MARECHAUX_v_._Her_Majesty_the_Queen_-_revised_judgment_.pdf ] This case will be of interest to those wondering about how the courts will deal with other charity tax shelter gifting arrangements. 

According to Statistics Canada total charitable donations in 2007 were $8,648,660,000 ($8.6Billion) and in 2008 $8,189,280,000 ($8.1B).  I am not great at math but that seems to indicate a drop of about $450 million dollars.  That is only part of the story.

Carol Goar in her article “All dressed up and nowhere to volunteer” asks some interesting questions about why we are not adequately using volunteers.  Hopefully the article will intensify the discussion on the point.

CRA is asking those who visit their Charities and Giving Web pages which are geared towards donors and charities.  You can take their survey at:
http://www.cra-arc.gc.ca/tx/chrts/cmmnctn/srvy-eng.html

Russel is an art donation case.  However, it is more than that.  It might be the beginning of the end of the abusive charity gifting tax shelters in Canada.

Social Enterprise for Canadian Charities: Legal Compliance from A-Z (9:00 AM – 5:00 PM) Saturday November 21, 2009

Charities are under increasing pressure to increase and diversify revenue. At the same time social enterprise offers a method to tackle complex social and economic problems. In this full day workshop charity lawyers Mark Blumberg (http://www.canadiancharitylaw.ca) and Richard Bridge (http://www.lawyerforcharities.ca) will cover the top 15 key legal issues facing charities in the morning and in the afternoon, specific legal issues affecting charities that wish to be involved with business activities, earned income, social enterprise, community economic development and fundraising. There are many advantages of being a charity and also many restrictions and responsibilities. It is important that Canadian charities comply with their legal responsibilities or the consequences in terms of reputation, charitable status and assets can be substantial.

Social Enterprise for Canadian charities - Legal Compliance from A-Z with Mark Blumberg and Richard Bridge

The first chapter of the online toolkit covers charities and terrorism.  The next chapters will deal with Safeguarding charity funds; Safeguarding charities – people, property, reputation; and a case study archive (good practice examples from the sector for all chapters) and other sources of help.  http://www.charitycommission.gov.uk/investigations/toolkitintro.asp

The Ontario Public Guardian and Trustee has produced a charity bulletin entitled Charitable Fundraising: Tips for Directors and Trustees.  In that bulletin they discuss fundraising requirements for charities that operate in Ontario. 

Another case involving a charity losing its charitable status.  Another example of a very weak case being brought that just helps perpetuate bad case law involving charities.