Here is some statistical information on Charity Scams - Costing Us All A Lot. Just to give some perspective far more funds flow to charity tax avoidance schemes in Canada than to all the money spent by Canadian charities on relieving poverty in the developing world!!
If you are interested in assisting reduce or eliminate extreme poverty and you want more than writing a cheque to fix a symptom of a problem then you might find this note interesting. Various groups have highlighted the importance of tax havens in undermining foreign governments in their development work by being a mechanism by which the wealthy can avoid paying taxes. What does government in Canada provide to us? Schools, hospitals, universities, social safety net, police. Imagine what Canada would look like if we had almost no tax revenue. Within a decade or two there would be no schools, hospital, universities, social safety net, police etc.
There are over 83,500 Canadian registered charities. If you want to find out about a registered charity the first place to look is the CRA’s website to see if they are registered and their T3010 Registered Charity Information Return at http://www.cra-arc.gc.ca/chrts-gvng/chrts/menu-eng.html. Google also provides often useful information. The Globe and Mail, Toronto Star and Vancouver Sun have also written interesting articles on the charity sector. Canadiancharitylaw.ca has information on the legal requirements and ethical standards for Canadian registered charities at www.canadiancharitylaw.ca. CharityVillage has lots of information on jobs within the charity sector as well as articles on different charity related subjects at www.charityvillage.com If you want to donate to any Canadian charity online, even if they do not have a website, you can do so through www.canadahelps.org
The OECD Report on Abuse of Charities for Money Laundering and Tax Evasion is well worth reading for anyone who cares about the Canadian charitable sector. On my quick read of the report it seems that Canada has probably more charity tax evasion than any other country. The complete report is at: http://www.oecd.org/dataoecd/30/20/42232037.pdf I will be writing an article on the ethics of professional advisors, especially charity lawyers, being involved with advising and defending charity tax evasion schemes.
The Charities Directorate of the Canada Revenue Agency has revised their form T3010A with a new form called the T3010B, and it is supposed to be used by Canadian charities for fiscal years ending in 2009.
The Millennium Charitable Foundation Case deals with abusive charitable gifting schemes. The Federal Court of Appeal (FCA) sided with CRA in this matter. It is well worth reading for anyone concerned with the charity sector.
In this article, I look at and criticize a sensationalist and inaccurate article in the Ottawa Citizen entitled “Downturn will sink 10,000 non-profits: think-tank: ‘We’re just beginning to see blood in the pool,’ expert warns”.
There are many legal and ethical issues with the donation of pharmaceuticals to developing countries. In this note I will touch upon some of the ethical issues.
This CRA Charities Directorate Update presented in November 2009 provides some interesting information and statistics on compliance issues for the sector.
Since September 30, 2008 charities who telemarket must register. The Federal government recently rejected an attempt by AFP and Imagine Canada to exempt charities from any registration requirement. Here is my article on the Do Not Call List (DNCL) and Canadian charities.
Most of CRA’s view on political activities by Canadian charities can be found in Policy Statement CPS-022 Political Activities. (see Political Activities (CPS - 022) located at http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-022-eng.html I highly recommend that any charity considering conducting any activity that could be construed as political, review in detail the CPS-022 Policy Statement on Political Activities.
Ontario charities incorporated under the Ontario Corporations Act can save time and energy by filing one new directors and officer form instead of two, beginning when the Ontario corporation has a fiscal year end in 2009.
CRA has launched a new initiative called “Project Trident” in which they are targeting the “Triple Threat Tax Fraud” namely “identity theft, charities?related fraud, and tax preparer fraud.”
The 2009 Canadian Federal Budget released by Finance Minister Jim Flaherty on January 27 2009 includes nothing specific for charities.
In order for Canadian charities to effectively achieve their objects or mandate they often need to engage in some “political” activities, especially when the objects or mandate require the assistance and support of government. It is important for Canadian charities to understand the types of activities that are allowed and those that are prohibited. This presentation will discusses: *the importance of political activities conducted by charities, especially in the context of international development; *expenditure limitations on political activities for registered Canadian charities under the Income Tax Act (“10% rule”) and CRA rules; *effect of political activities on disbursement quota; *the difference between allowable political, charitable, and prohibited activity and examples of each; *the difference between public awareness, educational activities, and political activities; *use of non-profits to increase political expenditures and activities; *lobbyist registration requirements for Canadian non-profits and charities interacting with the federal government.
Here is part of a draft of the new T3010B which was included in a recent Bulletin of the CCCC. This part relates to the T3010B questions on foreign activities by Canadian charities with some of my comments in red.
New_T3010_Questions_on_foreign_activities_from_Blumbergs.pdf
This article deals with the recent Canadian Federal Court of Appeal case Hostelling International Canada – Ontario East Region in which the Federal Court of Appeal upheld the CRA decision to revoke their charitable registration. Under the Canadian Income Tax Act, charitable organizations and public foundations can carry on “related business” that promote their charitable objects. An example would be a hospital cafeteria - providing food to patients and visitors. They can also carry on other unrelated business activities if “substantially all” (CRA says at least 90%) of the people involved in these activities are volunteers. Here is my article on
Canadian Charities and Business Activities and a copy of the decision in the federal court of appeal Hostelling International Canada – Ontario East Region
This short note discusses why a major gift combined with a bequest to a Canadian registered charity may be more tax effective than just a bequest to that same charity.
Here are some statistics from the CRA dealing with the 83,000 registered charities in Canada as of the end of 2007.
The CRA has recently posted a useful checklist entitled “Goods and services tax/harmonized sales tax (GST/HST) checklist for charities”
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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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