Using Intermediaries in Canada

August 24, 2016

CPA Canada’s 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers

The Chartered Professional Accountants of Canada (CPA Canada) have released today a booklet entitled 20 Questions Directors of Not-for-Profit Organizations Should Ask about Mergers. It is located on this CPA Canada page. It is written by Andrea Cohen Barrack, CEO of the Ontario Trillium Foundation (OTF), Canada’s largest granting foundation, and Mark Blumberg, a charity lawyer and partner at Blumberg Segal LLP and editor of www.globalphilanthropy.ca, www.canadiancharitylaw.ca, smartgiving.ca and charitydata.ca

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April 25, 2016

High Court rules Cup Trust Gift Aid claim can be withdrawn

In the Cup Trust case there was an abusive scheme run by a charity and controlled by a trustee, Mountstar.  The Mountstar trustee was replaced by an interim manager appointed to take over the affairs of the charity.  The interim manager decided that they did not want to pursue litigation relating to a Gift Aid claim.  The organizers of the scheme (Mountstar) wanted the charity to continue litigation and were prepared to pay for its costs.  The High Court in the UK decided that charities should not be involved in speculative litigation and that it was acceptable for the interim manager to withdraw the Gift Aid claim.  

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October 09, 2015

Agenda for the Blumbergs’ Charity Law Institute 2015

October 08, 2015

Recent CRA letters of revocation for Canadian registered charities

Here are the CRA letters from a number of recent Canadian registered charity revocations, annulments and penalties.  These letters from CRA cover many different grounds for de-registration or the imposition of penalties.   

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February 08, 2015

Updated Canadian Registered Charity Legal Checklist by Mark Blumberg

Here is an updated version of the Canadian Charity Legal Checklist.  For those who are interested in reviewing legal compliance for their registered charity they may find the checklist helpful.  

December 13, 2014

Blumbergs’ Canadian Charity Law Boot Camp 2015

We are looking forward to presenting the Blumbergs' Canadian Charity Law Boot Camp 2015 on April 14, 2015.   For information or to register see: Blumbergs' Canadian Charity Law Boot Camp 2015

December 04, 2013

CRA reminds groups of December 31, 2013 deadline

The CRA put a reminder on their website today “Does your organization make its resources available to, or work with a municipal or public body performing a function of government in Canada, such as a First Nation? The December 31, 2013 deadline for registration of these bodies to maintain their qualified donee status is approaching. For more information, go to Municipal or public bodies performing a function of government in Canada.”

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September 12, 2013

CRA revokes Christian Economic Assistance Foundation

CRA has recently revoked the Christian Economic Assistance Foundation as a registered charity.  The charity had been previously covered by the National Post in a story entitled “Parents could face massive bills after CRA accuses Christian schools charity program of running ‘tax scheme’”

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June 14, 2013

New CRA Application for “Municipal or public bodies performing a function of government in Canada”

The CRA has just released its new process for recognizing “municipal or public bodies performing a function of government in Canada”.  Here is a PDF OF THE ARTICLE This will be of particular interest to Aboriginal bands, school boards and others who may wish to obtain this recognition as it makes them a qualified donee and therefore able to issue official donation receipts and also more easily receive funds from other Canadian charities.  We hope that this new process will facilitate philanthropy in the Aboriginal space.  There are probably over a thousand organizations that could one day be listed on the CRA website, which will make donations to them far simpler and easier.  It is important to note that as of January 1, 2014 for a group to be recognized under the category “municipal or public bodies performing a function of government in Canada” it cannot self-assess but must be on the list.  Some organizations will want to proceed quickly with the process as CRA has not set out a service standard yet and therefore it is difficult to know how long the process will take.  It is also interesting to note that “...organizations that apply before January 1, 2014, and that can show that they met the requirements to be a municipal or public body performing a function of government in Canada as of January 1, 2012, will be given qualified donee status retroactive to that date.”  Although a lawyer is not required to send the letter to CRA some organizations may wish to retain legal counsel to assist with this and other matters such as appropriate issuance of receipts and required books and records. 

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January 18, 2012

Webinar “Successfully funding First Nations communities in Canada in compliance with CRA guidance”

[Update - We are delighted to have over 65 people/organizations attend the webinar “Successfully Funding First Nations Communities in Canada in Compliance with CRA Guidance”  Here is an archived version of the presentation:  https://ocsa.webex.com/ocsa/lsr.php?AT=pb&SP=TC&rID=8543797&act=pb&rKey=7ae8d62d96563d62   Also here is a shortlink if the long link does not work:  http://ow.ly/90e1N Here is a copy of the presentation in PDF of Successfully funding First Nations communities in Canada in compliance with CRA guidance]

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June 22, 2011

What is Canadian registered Charity’s “Own Activities” when using an intermediary?

What is Canadian registered Charity’s “Own Activities” when using an intermediary?

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June 22, 2011

What is Direction and control for a Canadian charity when using intermediaries in Canada?

The CRA expects that Canadian charities using intermediaries in Canada such as non-profits that are not charities or business will maintain direction and control over their resources.  What is “direction and control”?

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June 22, 2011

What is the purpose of the Guidance “Using an Intermediary to Carry out a Charity’s Activities”

The purpose of the Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada” is to help charities understand how they can appropriately work with non-charities in carrying out their charitable activities and CRA’s expectations of registered Canadian charities.

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June 22, 2011

Are there restrictions on how a Canadian registered charity can use its resources?

Yes there are restrictions on how a Canadian registered charity can use its resources.

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June 22, 2011

How can a charity carry out its own charitable activities using an intermediary?

Canadian registered charities can in general carry out their own activities by using staff or volunteer.  That is not too difficult to understand.  However, CRA also allows that a Canadian registered charity can carry out its own activities by using intermediaries such as contractors, agents, joint ventures etc.

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June 22, 2011

Are their court decisions about the use of intermediaries by Canadian registered charities?

Yes there are a number of court decisions dealing with Canadian registered charities and how they are allowed to interact with organizations that are non-qualified donees.

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June 22, 2011

What is a gift to a qualified donee under CRA’s Guidance on using intermediaries?

A qualified donee is a number of organizations that can issue official donation receipts.  In general a Canadian registered charity is allowed to make a gift to another qualified donee.  On the other hand a Canadian registered charity is not allowed to make a gift to a non-qualified donee ie. an organization that is not able to issue an “official donation receipt” for Canadian Income Tax purposes.

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June 22, 2011

What is required by CRA for a written agreement between a registered charity and an intermediary?

A written agreement between a Canadian charity and an intermediary is important but not sufficient to show direction and control.  Also CRA has certain requirements for agreements.

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June 22, 2011

What is a description of activities for charitable activities carried out by an intermediary?

What is a description of activities for charitable activities carried out by an intermediary?  A “clear, complete, and detailed description ” desciption of activities is a ery important part of showing that a Canadian charity has “direction and control” over resources transferred to an intermediary.

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June 22, 2011

What is a conduit? under CRA’s Guidance on Registered Charities Using an Intermediary In Canada

What is a conduit under CRA’s Guidance on Registered Charities Using an Intermediary In Canada?  It is important for charities to understand the concept of “conduit”.  Registered charities cannot just flow funds through from the registered charity to a non-profit that is not a charity - if a registered charity does that then it would be considered a conduit.

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June 22, 2011

What are the requirements when a Canadian registered charity works with an intermediary?

It is important that any intermediary have the capacity to do the job and that there be a “strong expectation” that the funds or resources transferred from the charity will be used appropriately.

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June 22, 2011

What are the most common types of intermediaries used by Canadian registered charities?

The most common types of intermediaries are agent, contractor, joint venture, and co-operative participant.  Here is further information on each of them.

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June 22, 2011

What is “direction and control” for a Canadian charity using an intermediary?

Understanding “direction and control” is very important for understanding the permissible relationships between a Canadian charity and a non-qualified donee.  CRA’s guidance sets out how a charity should have “direction and control”.

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June 22, 2011

How should a Canadian registered charity have direction and control over the use of its resources?

How and how much direction and control varies depending on the circumstances.

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June 22, 2011

What is monitoring and supervision of an intermediary by a Canadian registered charity?

One of the measures of control is that a Canadian charity monitor and supervise its activities carried on by the intermediary.

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Do you require legal advice with respect to Canadian or Ontario non-profits or charities?

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Charity Lawyer Mark Blumberg

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.

mark@blumbergs.ca
416.361.1982
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