publication date: Jun 19, 2012
author/source: Yvonne Chenier
The Canada Revenue Agency
has not changed
its position on fundraising by charities. It had asked for feedback on the
Guidance CPS-028, Fundraising by Registered Charities
, when that was published in June
2009. After reviewing the submitted comments, the CRA revised the guidance to
clarify certain key concepts. The resulting new Guidance, CG-013, issued April
20, 2012, replaces the previous version.
The new section
entitled "When is fundraising not acceptable?" bears further analysis and
should be carefully reviewed by all charities. It answers the question by
saying that fundraising is acceptable unless it is described in a delineated
list. It states:
registered charities must be conducted within legal parameters. Fundraising is
acceptable unless it:
purpose of the charity (a collateral non-charitable purpose);
a more than incidental private benefit (a benefit that is not necessary, reasonable,
or proportionate in relation to the resulting public benefit);
illegal or contrary to public policy;
engage in unacceptable fundraising cannot be registered under the Income Tax
because they are not constituted and operated exclusively for
charitable purposes, or they are not devoting their resources to charitable
purposes and activities."
contrary to public policy"
In time we will
write about each of these prohibitions, as they should be understood by all
charities that want to stay in the CRA Charity
's good books. In light of issues that we have previously
written about, the specific prohibition against fundraising activities that are
illegal or contrary to public policy deserves first mention. The guidance gives
examples worth considering.
Examples of illegal
The guidance says,
"Examples of illegal fundraising activities are those that are criminally
fraudulent, or violate federal or provincial statutes governing charitable
fundraising, charitable gaming, the use of charitable property, or consumer
That is a very wide
net and could include everything from failing to register every year under the Charitable Fund-raising Act
in Alberta (
a significant percentage do not) to fundraising by stealing from the elderly,
which would no doubt be considered to be a criminal offence. In this respect
charities should really govern themselves accordingly and know with certainty
what legislation applies to them in each jurisdiction where they operate. If
they do not or choose not to understand and comply with all that governs them,
they may be doing so at their own peril.
Examples of fundraising
activities contrary to public policy.
The guidance says,
" For example, making a fundraising solicitation that does not comply with Canadian Radio-television and
directives or telemarketing rules, or other
established government policy, may be considered contrary to public policy."
not complying with Canada's new anti-spam law, expected to be in force in 2013,
will make a charity not only offside that new law but also subject to a
potential revocation of charitable status. This would be an undesirable state
of affairs for many, but is certainly within the realm of possibility.
All of this goes to
the point made many times before that Canada's charities are being subjected to
micro-management. They are required to know not only basic common sense rules
that one would think would apply to organizations whose purpose is to do good,
but also a plethora of regulatory statutes, both provincial and federal.
For each charity
and especially for those who operate in multiple jurisdictions, this is
becoming more of a headache. Who will be able to keep up?
Yvonne Chenier prefers to
work for clients in the philanthropic and aboriginal sectors, acting as general
legal counsel and advising on planning, organizational, regulatory and
She has served as a
trustee, board member or founder of numerous organizations. She is actively
involved in her professional associations and speaks frequently to various
groups on topics ranging from legal to financial matters.
Contact her by email, www.drache.ca.