Legal Rules and Risk Management for Canadian charities carrying out foreign activities

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Over 5000 Canadian registered charities operate outside of Canada and they cumulatively spend over $4 billion per year on foreign activities.This course Foreign Activities and Canadian Charities is a course with charity lawyer Mark Blumberg which discusses international activities by Canadian charities and related regulatory issues. The course also deal with international fundraising from Canada which results in Canadian charities receiving over $2 billion per year from donors outside of Canada.

Some charities operating abroad are not aware of, or compliant with, their legal requirements and foreign activities has been an area that has been scrutinized by CRA in its audits and can result in suspensions, penalties and revocation of charitable status if the rules are not followed.

Some of the issues discussed include:

  • Ideas for doing good abroad that do not involve registered charities
  • Some general considerations for Canadian charities carrying on activities outside of Canada
  • Review of the importance of international philanthropy
  • Why would a “local” Canadian charity such as a hospital want to carry out foreign activities?
  • An overview of the Income Tax Act (Canada) regulatory framework governing the over 5000 Canadian charities conducting foreign activities
  • The distinction between qualified donees and non-qualified donees
  • A detailed discussion of CRA publication “Canadian Registered Charities Carrying Out Activities Outside Canada”:
  • Direction and control over resources
  • Avoiding being a “conduit”
  • Abiding by local laws
  • Risk Management for international activities
  • Types of permissible relationships for Canadian charities operating abroad
  • Avoiding misuse of charitable assets
  • Charitable goods policy
  • Keeping books and records in Canada
  • Challenges in dealing with natural disasters
  • Transfers of Capital property to local partners
  • Misuse of international activities for private gain and abusive charity gifting tax shelters
  • Due diligence and procedures to avoid terrorist abuse
  • Inflated valuation of pharmaceuticals for developing countries
  • More in-depth discussion of books and records
  • Some important ethical issues with foreign activities
  • Can “local ownership” be compatible with “direction and control”.
The sections covered include:
  1. Introduction and Overview
  2. Basic considerations for registered charities
  3. Cross border philanthropy (money in and money out)
  4. International Fundraising
  5. Grant making from Canada by individuals outside Canadian Registered Charities
  6. Good work outside the charitable sector
  7. Grant making from Canada (“Foreign Activities”)
  8. What is a qualified donee?
  9. CRA Guidance and Rules for foreign activities by Canadian charities
  10. Local Ownership and Some Ethical Issues
  11. Some questions for follow-up on foreign activities
  12. CRA Audits and Foreign Activities
  13. Recent Developments and Resources
  14. Quiz

This course Foreign Activities and Canadian Charities will be of interest to staff at non-profits and charities responsible for compliance issues especially program and finance staff and professional fundraisers, professional advisors such as lawyers and accountants who advise charities that receive funds from abroad or send funds or staff abroad, board members of Canadian charities that conduct foreign activities and philanthropists who want to understand the regulatory requirements of Canadian charities who operate abroad.