WE Charity is a Federal Corporation under the Canada Not-for-profit Corporations Act (“CNCA”).  The CNCA is corporate legislation that applies to both Canadian non-profits and charities that are set up under the CNCA.   As it covers a number of different types of entities, not just charities, the CNCA has relatively few requirements for a CNCA corporation.

Here is the We Charity’s Corporate Profile Report from July 11, 2020.  Is it ok?  Is there something wrong? Does it look fine? Look at the PDF link before proceeding.


The CNCA makes a distinction between soliciting and non-soliciting corporations.  There are additional requirements for soliciting corporations.

 

https://www.ic.gc.ca/eic/site/cd-dgc.nsf/eng/cs05011.html

What requirements must soliciting corporations meet?

A soliciting corporation must meet five requirements. It must:

  1. have a minimum of three directors, at least two of whom are not officers or employees of the corporation or its affiliates;

  2. comply with the requirements for public accountants and financial review that relate to soliciting corporations;

  3. send financial statements and the report of the public accountant, if any, to the Director;

  4. include a provision in its articles that any property remaining on liquidation of the corporation be distributed to a “qualified donee”, as defined in the Income Tax Act; and

  5. not have a unanimous member agreement.

 

If WE Charity as a Federal Corporation under the Canada Not-for-profit Corporations Act (“CNCA”) received over $10,000 in public funds in any year then it is a “soliciting corporation” and it is required to declare that it is a soliciting corporation in its annual Form 4022 and the corporation must file their Financial Statements every year with Corporations Canada and they are available to the public from Corporations Canada.

Unless they receive an exemption from Corporations  Canada, which is only done in very limited circumstances, it appears that WE Charity from their T3010 filings has received over $10,000 in public funds in each of the last 5 years.  If that is the case, then they should have filed for the last 5 or so years their financial statements with Corporations Canada and it does not appear from Corporations Canada’s website that they have done this in the attached PDF.

As Corporations Canada, which is a Federal government department, notes “Since soliciting corporations receive public funds, they must meet additional requirements to ensure sufficient transparency and accountability for that income.”  In addition, “A corporation can also be dissolved administratively by Corporations Canada for failing to comply with the legislation.”  If an organization is dissolved, and therefore does not exist, CRA can revoke its registered charity status.

Some might say that it is not important – ‘As a registered charity, WE Charity has to file their financial statements with the Charities Directorate of CRA every year’.  Yes but obtaining those documents are much more difficult than getting it from Corporations Canada.   Secondly, a group may say ‘but we put up the information on our website’.  Great answer – do think that if you put up your tax return online but don’t file it with CRA that is fine – after all CRA can come and find it!  These are cute suggestions that I sometimes hear but in my view, if you are a large organization and you claim transparency is important then you should ensure that your basic legal filings are done.

It looks like WE Charity worked out recently that it is a soliciting corporation and it does need to file its financial statements with Corporations Canada.

Here is an updated recent corporate profile report: We Charity Corporate Profile Report – July 27, 2020   You will notice that WE Charity has changed its filings to indicate that it is a soliciting corporation and also filed financial statements.  5 years late but better late than never.

Registered charities should disclose important information to stakeholders whether or not it is a legal requirement.   However, it is vitally important that registered charities who are asking the public and governments for money should at least, at an absolute minimum, comply with legal transparency requirements which are very basic in Canada.  When doing due diligence on a charity, especially for large grants, you can tell a lot about a charity based on their filings or lack thereof.   Grantmakers need to take their own transparency and those of grantees much more seriously.

You can search federal corporations under the CNCA at Corporations Canada’s website.