Here is a great quote from Sam Younger, chief executive of the Charity Commission, that Canadian charities should think about.
Here is an article I recently wrote for the Canadian Donor’s Guide entitled “Receipting Takes Front and Centre in Federal Budget”
Here are a couple of interesting blog postings notes entitled “Budget 2011 Cracks Down on Abusive Charities” and “Beware of tax shelter donation arrangements”.
F. Max E. Maréchaux, is a partner at the law firm of Miller Thomson LLP. According to Federal Court of Appeal decision “F. Max E. Maréchaux participated in a “leveraged donation” scheme. The essence of the scheme was that, for an expenditure of $30,000, he received a charitable donation tax receipt for $100,000, and claimed a tax credit of $44,218, a potential return on his outlay of nearly 50% in a matter of months. Very little of the money was retained by charities to advance their purposes.” Mr. Maréchaux had lost a decision at the Tax Court of Canada and his appeal to the Federal Court of Appeal was dismissed as “Mr Maréchaux had not made a “gift””. Now the Supreme Court of Canada has denied Mr. Maréchaux’s leave to appeal which results in the Federal Court of Appeal decision standing. According to the Trial Court “The Program was implemented on December 31, 2001, with 118 participants (“Participants”) and donations totalling approximately $18,305,000.”
Another tax preparer has been sentenced to jail for the issuance of fraudulent official donation receipts. This tax preparer was based in Etobicoke, Ontario and issued over 34 million of false receipts.
What is Canadian registered Charity’s “Own Activities” when using an intermediary?
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”?
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.
It is pretty obvious that Canadian charities, whether operating in Canada or outside of Canada, cannot directly or indirectly support terrorism. Canada has anti-terrorism legislation and charities should due due diligence before transfering assets to non-profits and other entities both in Canada and abroad.
Yes there are restrictions on how a Canadian registered charity can use its resources.
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If you require legal advice with respect to Canadian or Ontario non-profits or charities please contact Mark Blumberg at .(JavaScript must be enabled to view this email address) or at 416-361-1982 x237 www.canadiancharitylaw.ca