We recently put online CRA letters to registered charities that had been revoked over the last few years as a result of audit.   It was interesting to see a number of charities that were revoked just because of being dormant.  We know that about 600 charities every year are revoked because they don’t file their T3010.  But what happens to a charity that for many years is dormant, does nothing but file the T3010.  CRA cannot revoke them for non-filing!   There are perhaps thousands of these charities.

So it seems that CRA is giving them the opportunity to show that they are restarting charitable activities or alternatively requesting voluntary revocation but if they don’t do that the CRA is now revoking them for being inactive.  With the CRA charity application times having shrunk to 4-6 months in many cases – it might make sense for some who are holding on to charity status to give it up.  For others, it may make sense to start using the charity again.

Here are some excerpts below from the Pentecostal Assembly of Arnold’s Cove, Newfoundland NITR letter.

 

The purpose of this letter is to describe the areas of non-compliance identified by the Canada Revenue Agency (CRA) during the course of the review as they relate to the legislative and common law requirements applicable to registered charities, as well as to provide the Organization with the opportunity to make additional representations or to present additional information. Registered charities must comply with the law, failing which, the Organization’s registered status may be revoked in the manner described in section 168 of the Act.

The balance of this letter describes the identified area of non-compliance in further detail.

Identified area of non-compliance

Devotion of resources – Inactive

The· Organization was registered effective January 1, 1967, as an internal division of The Pentecostal Assemblies of Newfoundland and Labrador {head body), with the purposes (also known as objects), per its head body’s governing documents.

Our review of the Organization’s Form T3010, Registered Charity Information Return, for he above-noted fiscal periods, indicates that the Organization has been inactive for the last six consecutive years. As such, it is our position that the Organization is inactive and has failed to devote its resources to its own charitable activities.

In this connection, it is our view that the Act requires that a registered charily be active in order to be meeting the requirements for which it obtained registration. Furthermore, it is our opinion that based on the interpretation of a combination of wording used in particular provisions of the Act, the Minister of National Revenue has the authority to grant registered status to those entities that are active. and the discretion to revoke
those that are inactive.

Specifically, when considering the definition of a “registered charity” in subsection 24 (1) of the Act, along with the definition of a charitable organization, in section 149.1, it is our opinion that a registered charity must (emphasis added) be active.

Furthermore, subsection 149.1 (1) defines a “charitable organization” in part, as an organization that devotes all of its resources to charitable activities carried on by the organization itself (emphasis added).

 

Some of the charities that we saw and uploaded that were recently revoked for being inactive included Gilead Wholeness Centre(s), Pentecostal Assembly, Touch of the Heart Ministry, Vicki and Stan Zack Family Foundation and Walk 5-5-55.

Should charities that have not done anything in over 5 years be allowed to remain as registered charities?   Some might argue yes and some no.