What is a description of activities for charitable activities carried out by an intermediary? A “clear, complete, and detailed description ” desciption of activities is a ery important part of showing that a Canadian charity has “direction and control” over resources transferred to an intermediary.
In CRA’s Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada” it notes:
“5.3. What is a description of activities?
Before starting an activity, the charity and its intermediary should agree on a clear, complete, and detailed description of the activity. The charity should be able to document its exact nature, scope, and complexity.
Depending on the type, complexity, duration, and expense of an activity, the charity should be able to provide documentary evidence that shows:
• exactly what the activity involves, its purpose, and the charitable benefit it provides;
• who benefits from the activity;
• the precise location(s) where the activity is carried on;
• a comprehensive budget for the activity, including payment schedules;
• the expected start-up and completion dates for the activity, as well as other pertinent timelines;
• a description of the deliverables, milestones, and performance benchmarks that are measured and reported;
• the specific details concerning how the charity monitors the activity, the use of its resources, and the intermediary carrying on the activity;
• the mechanisms that enable the charity to modify the nature or scope of the activity, including discontinuance of the activity if the situation requires (for example - the intermediary begins misusing funds);
• the nature, amount, sources, and destination of income that the activity generates, if any (for example - tuition fees from operating a school, or sales from goods produced by poor artisans in economically challenged areas [Footnote 17]); and
• any contributions that other organizations or bodies are expected to make to the activity.”
For more information on the CRA Guidance “Using an Intermediary to Carry out a Charity’s Activities within Canada” (Reference number CG-004) see:
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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.