Here is our Blumbergs’ Canadian Charity Legal Checklist for Working with Intermediaries in Canada 2020.  It will be of help to Canadian registered charities that work with/hire non-charities such as businesses, non-profits or individuals to carry out work for the registered charity.

It defines “qualified donees”, “intermediaries” and beneficiaries.  They are all very distinct concepts and important for charities to understand if they wish to have greater flexibility in their operations.

Qualified donees are organizations that can issue official donation receipts under the Income Tax Act (Canada). The most common example is a registered charity.

An “Intermediary” is an individual, business or non-profit organization (that is not a qualified donee) that carries out activities for a Canadian charity through a “structured arrangement” with “direction and control” to benefit the charitable beneficiaries.  An intermediary can be a contractor, agent, joint venture participant, or co-operative participant.

A “beneficiary” is the ultimate recipient of charitable resources or benefit.  For example, a hospital can be a qualified donee, or it could be an intermediary, but the beneficiaries are the patients.   The beneficiaries of a school are the students at the school.

The checklist will help charities working with intermediaries to ensure that they have systems in place for due diligence and sufficient measures of control to meet the direction and control requirements for registered charities.