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Even in the face of disaster, charities should not stray from their purposes

CharityWhether it is assisting Syrian refugees to settle in Canada or helping those fleeing from floods and fires, the goodwill of the people and charities in Canada always make headlines. In times of disaster, it seems many charities want to raise money and get on the bandwagon to help those in need. Although this may be a laudable goal for charities that want to show their benevolence, sometimes it could simply get them into trouble.

Maybe due to recent headlines in Canada or a culmination of many disasters that have attracted the attention of the charitable sector, the CRA Charities Directorate obviously has felt that it is timely to address the issue of charities coming to the assistance of those affected by a disaster. They published a Q and A in a bulletin about assisting people affected by the conflict in Syria and more recently and quickly after the fires in Alberta, in the “Charities Giving – What’s New bulletin” the CRA Charities Directorate has asked and answered the following similar questions:

  1. Our charity wants to support the victims of wildfires in Alberta by raising funds and helping those who are affected. Can we do this?
  2. Generally, a charity can carry out activities, including fundraising activities, that further charitable purposes. Charitable purposes that allow a charity to help victims of disaster or other emergency might include a purpose to relieve poverty by providing financial or other assistance to those in need. Your charity can also gift funds raised for these purposes to other registered charities that are established to carry out such purposes.

To avoid placing your registered status in jeopardy, if your charity wants to carry out new programs and activities, you should contact the Charities Directorate to make sure the proposed activities are allowed and determine whether your purposes should be amended.

  1. What if we believe our charity’s purposes allow us to become involved in raising funds for and helping those affected by the wildfires, but we have not provided the Charities Directorate with detailed information on how we will do so?
  2. You can ask the Charities Directorate to review your purposes and proposed activities, and it will consider them on a priority basis. A charity that wants to conduct new activities should give the Charities Directorate a detailed statement of those activities to make sure they further the charity’s purposes. For more information on new activities, go to changing a charity’s activities.
  3. Our charity wants to become actively involved in raising funds for, and helping, victims of the wildfires, but these activities do not fall within our approved purposes. Can we change or add to our purposes?
  4. Yes, a charity can change or add to its purposes. If you want to do so, you should send your proposed purposes to the Charities Directorate for review, along with a detailed statement of the activities you intend to conduct to further the purposes. The Charities Directorate will consider them on a priority basis. If they are acceptable, you can then amend your governing documents. For more information on changing purposes, go to changing a charity’s purposes.

There are registered charities established to help victims of disaster that have systems in place to effectively conduct such activities. Donating to, and working with, these organizations may be a more efficient use of resources.

  1. How can I establish a new registered charity to provide relief to victims of the wildfires in Alberta?
  2. You can apply to the Canada Revenue Agency to be registered, and applications with purposes that address this emergency will be considered on a priority basis. However, processing new applications may take longer than other options, and setting up the infrastructure needed to provide disaster relief may be complex. If you want to provide help, we encourage you to work with existing registered charities that are established for, and carrying out, programs of emergency relief. For more information, go to Is registration right for you?

We have now been warned again that if a charity drifts from its charitable purposes and uses its charitable resources to assist in a disaster, registered charity status might be in jeopardy if it has not been set up to do that. The CRA has said, in a rather polite way, that any charity thinking of doing something involving a disaster should first do the following:

  1. Check its charitable purposes to see if they are clearly in the realm of being able to help people in a disaster;
  2. If in doubt ask the Charities Directorate; and
  3. If an activity is clearly not within their purposes then take steps to make the activity within their purposes by amending their purposes.

What the CRA Charities Directorate is not addressing in this bulletin is the lengthy delays with any kind of interaction with their department to get a clear answer to questions such as if charitable purposes cover activities that are proposed or if amended charitable purposes will be acceptable for an organization at any given time. This process could take months and sometimes takes as long as it does to create a new charity in the first place.

The best advice coming out of these CRA bulletins is the answer to the latter question from CRA, where they encourage anyone interested in helping those in a disaster to work with existing registered charities already set up and legally operating for this purpose. They are easy to find by a search either on the internet or on the CRA website. No delays would be involved to thwart good intentions.

In the same bulletin the Charities Directorate also addressed donors and answered some of their questions. Donors were advised to do their homework, search out charities that can actually issue official donation receipts, donate cash and be informed when confronted with any business or organization that is asking for a contribution. Donors will only get a charitable receipt if they are the donor to the charity that is involved in the disaster. Businesses collecting money at the cash register do not get those donation receipts.

This kind of bulletin is welcome from the Charities Directorate because it does answer a lot of questions that people who want to give and those serving on boards of directors of charities probably are thinking of in the back of their mind. A refreshing and useful piece of information.

By: Yvonne Chenier, Q.C., Lawyer and Philanthropy Consultant

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Drache Aptowitzer LLP

Tax and Charity Lawyers at Drache Aptowitzer LLP
Drache Aptowitzer LLPis one of Canada’s foremost experts in the law related to charities and non-profit organizations. Their team of bloggers is led by Adam Aptowitzer LLB. He is a lawyer practicing in the areas of charity and tax law. He is a member of both the bars of Alberta and Ontario. He has been speaking and writing on the topic of charity law for several years and been published in numerous publications including the Canadian Taxpayer, the Canadian Fundraiser and the Not-for-Profit News and has been cited as an expert in many publications including the National Post.Read more
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