When the Liberals came into power last year, the new Minister of National Revenue announced that she was putting a halt to the “political activities” audit of charities that the previous administration had been conducting for the past few years. In practice, this meant that the charities in line to be audited under the program were given a reprieve, but those that were already in the course of being audited were not. One of the latter charities, Canada Without Poverty, is now bringing a constitutional challenge against the political activities law.
Canadian charity law, being largely based on that of the United Kingdom, traces its roots directly back to the preamble of the English Charitable Uses Act of 1601, known as the “Statute of Elizabeth I”. Although the Statute itself was repealed in the 19th century, the preamble was legally preserved and still forms the basis of the line of case law running right to the modern day that defines what is legally charitable.
As an Executive Director, there are many different areas that need your attention on a daily basis: strategic direction, fundraising, stakeholder engagement, employee and volunteer management, media relations and grant applications, just to name a few.
With all of these factors to manage, keeping up with changes in legal compliance and CRA requirements may not be perceived as a top priority. However, failing to pay attention to compliance can leave your organization vulnerable to the risk of financial penalties and have a negative impact on your reputation.
I want to highlight a couple of recent issues you may want to consider.
Non-profit organizations may not consider it priority number one, but reviewing your legal compliance will protect your organization’s finances, your reputation, your directors and donors—even your organization—from shifting legal sands.