Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Receipting by Canadian Registered Charities, Fundraising Guidance for Registered Charities
On the CRA database it has become apparent that CRA has recently revoked the charitable status of two religious organizations that conduct significant foreign activities. We have put in a request to CRA for information on why they were revoked. Unfortunately under the current rules even if CRA is aware of a problem with a charity it can only advise the public AFTER formal revocation has taken place. So the details available at this point are very sparse.
The two revoked Canadian charities are:
1) CHASDEI TOVIM MEOROS
It lists its charitable activities as "To provide assistance to the poor in the Canada and Israel". It had total revenue in 2015 of $7.6 million. It spent less than 1% on administration. ($56,000). It identified fundraising costs of $37,843 - which is about 1/2 percent of revenue. It identified having no employees. It also only spent on professional fees $2,441. Approximately 5m was from receipted donations, 1.3m from other charities and 1.2m was non-receipted gifts.
So in summary its identified expenditures on charitable activities at $6,000,715, management and administration $56,697, fundraising $37,843, political activities is 0, other is 0, gifts to other qualified donees of $1,794,245. Total expenditures of 7,889,500
Here is the summary from CRA
Summary of reasons for revocation — CHASDEI TOVIM MEOROS
The audit by the Canada Revenue Agency (CRA) has revealed that the Organization is not complying with the requirements set out in the Income Tax Act. In particular, it was found that the Organization did not devote all its resources to its charitable purposes and failed to maintain proper books and records. For all of these reasons, and for each reason alone, it is the position of the CRA that the Organization no longer meets the requirements necessary for charitable registration and should be revoked in the manner described in subsection 168(1) of the Act.
The organization identified "Total expenditures on activities/programs/projects carried on outside Canada, excluding gifts to qualified donees" at $4,894,64. It identified that all the funds were provided to a Rabbi in Israel.
Here is a link to the CRA database for CHASDEI TOVIM MEOROS
As it was only recently revoked the group CHASDEI TOVIM MEOROS also appears on the www.charitydata.ca website. Some people find that this website we created is easier to use in terms of analyzing CRA data.
2) VAAD MISHMERES MITZVOS-COMMITTEE TO OBSERVE THE TORAH LAWS
It identified its activities on its last T3010 as "TO PROVIDE FUNDING FOR MEDICAL SERVICES, ADULT RELIGIOUS EDUCATION, SPECIAL EDUCATION GENERAL EDUCATION, POVERTY RELIEF, FAMILY SUPPORT, SOCIAL SERVICES, FOR LOW INCOME PEOPLE SOCIAL OUTREACH & SUPPORT FOR ORPHANS"
2015 revenue of $31,613,580 of which it appears about 100% either came from receipted donations or gifts from other charities that had presumably made receipted donations. It identifies spending approximately 1% on administration and zero percent on fundraising. It identified having no employees and spending no money on professional and consulting fees.
This charity identifies spending money in Israel and the United States of America. It did not identify in 2015 who its intermediaries were.
This organization was listed in a 2011 Toronto Star article on large charities that refused to provide copies of their financial statements when requested.
Here is a link to the CRA database for VAAD MISHMERES MITZVOS-COMMITTEE TO OBSERVE THE TORAH LAWS
Here is an article I recently wrote on revoked charities and how to search them on the CRA database.
Here is my most recent of many submissions to the Canadian Department of Finance to propose that CRA should have more room to advise donors and the public of significant concerns with charities, even before the formal revocation takes places.
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.