Becoming a registered charity is an important way for a not-for-profit organization to raise funds and serve its mission. A registered charity can receive gifts from other registered charities and can also make gifts to other registered charities. Canadian donors can give to registered charities and receive a donation receipt, but donors can also give to a wider group of organizations called “qualified donees”. This blog will explain about qualified donees and will focus on the process for a foreign university to become a qualified donee. What is a Qualified Donee? A qualified donee can issue ..read more

Since June 23, 2022, it is easier for Canadian registered charities to give funds directly to non-qualified donees inside or outside of Canada (including foreign charities or non-profits). This can be done through the new qualifying disbursements rules. The previous own activities rules of the CRA remain in place and are still useful in appropriate circumstances. Ways a Registered Charity Can Use Its Resources The Income Tax Act requires that a charitable organization devote all of its resources to activities that further a charitable purpose. A registered charity can only use its resources (f ..read more

As a Director of a not-for-profit Corporation, you can make a valuable contribution to the work of the organization, to its members, and, most important, to the community which it serves.   In order to properly carry out your duties as a Director, you should be aware of your rights, obligations, liabilities and right to indemnification.   A Director is a fiduciary. That means that a Director must act in good faith, with a view to the best interests of the Corporation as a whole. You may be held to a higher standard if you are on the Board of a charity. Generally speaking, directors ..read more

The year 2020, for all of us, has been unprecedented. For some, it has been the worst of times. For others, even the best of times. The not-for-profit sector has been devastated from the perspective of fundraising and programing. But there are also opportunities during these times – many organizations are using these times to plan new ventures or build up policy and governance strength. Bad times are not restricted to these COVID times. Bad times can come about at any time in the life cycle of an organization. Each organization has its own cycle and transitions. New executive directors, new me ..read more

An Ontario Superior Court decision removing limitations on the “non-partisan” political activities of charities has proven over the past two years to be a “game changer”. The 2018 ruling in Canada Without Poverty v. AG Canada removed the Canada Revenue Agency (CRA) restriction that charities spend no more than 10 per cent of their revenues on “non-partisan” political activities. The limit on partisan activities still stands. The question charities must ask is where does the line fall between partisan and non-partisan activities. Does advocating for a political party’s position or pla ..read more

Our associate Taras Kulish was recently involved in a decision at the Court of Appeal for Ontario in Ustymenko v. Sadochok Centre Inc. (Sadochok Preschool Centre). The Appellants sought leave to commence a derivative action based on allegations that a former director had misappropriated money in her capacity as director and derived personal benefit from the respondent Centre. The three judges of the Court of Appeal stated that: “The evidence did not disclose that K.K. was paid as a director but as an administrator and bookkeeper. The Board of Directors investigated the allegatio ..read more

CHARITIES EDUCATION PROGRAM (CEP) About six months ago, the Charities Directorate launched a new compliance program for registered charities, called the Charities Education Program or CEP. A CEP will involve an in-person visit from a Charities Education Officer at the charity’s office and will include a review of the purposes, activities, and books and records. The CRA plans to conduct approximately 500 of these visits each year and the selection process is likely to be based on indications of non-compliance that may have come up in a charity’s filing of its T3010, or elsewhere. Newly register ..read more

We have a couple of updates from Canada Revenue Agency (CRA), Charities Directorate, that will be of interest to registered charities in Canada. CRA’S NEW WEBSITE ADDRESS As many will know, the CRA (along with the entire Government of Canada), has moved – website address, that is!  All the Government of Canada’s online presence has been migrated to the domain www.canada.ca. For registered charities, this means updating your donation receipts. We wrote about this issue last summer, but at the time, we did not know when charities were going to have to make the switch. The CRA has indicated ..read more

Registered charities in Canada enjoy certain privileges under the Income Tax Act, including issuing tax receipts to donors. Regulation 3501 of the Income Tax Act includes a list of information required to be included on any tax receipt issued, and non-compliance with the regulation can be a serious issue both for charities and donors. One of the things that charities must include on the tax receipt is the name and website address of the Canada Revenue Agency. Since 2013, the Government of Canada has been working towards a one-website policy, with all government departments and agencies migrati ..read more

It may not be glamourous or exciting work, but when it comes time to wind up and dissolve a charity or not-for-profit corporation, it is worth doing right. Regardless of the reason for discontinuing the work of an organization, there are a number of important steps that leaders of the organization should undertake to avoid incurring penalties, ensure that the assets are properly disposed of, and minimize any risk for the directors, officers, and employees. An incorporated not-for-profit must get consent from the relevant corporate department – either Corporations Canada for a federally incorpo ..read more