Charities' Top Five Challenges in 2012
By Terrance S. Carter*
IDENTIFYING FIVE OF THE TOP LEGAL
AND RISK MANAGEMENT CHALLENGES FOR 2012
The charitable sector has been very busy in 2011, and with the dawning of a new year, charities will want to turn their attention to new challenges ahead. The following is therefore a brief summary of five of the top anticipated legal and risk management challenges for charities for 2012:
1. Anticipating CRA’s New Fundraising Guidance;
2. Implications of the 2011 Federal Budget Concept of “Ineligible Individuals” for Directors, Officers, and Managers;
3. Working with Intermediaries Inside and Outside of Canada;
4. New Challenges Involving Inter-Charity Transfers; and
5. Reducing Risks from the Discipline and Expulsion of Members.
1. Anticipating CRA’s New Fundraising Guidance
Canada Revenue Agency’s (“CRA”) Guidance (CPS-028): Fundraising by Registered Charities (“Guidance”) is in the process of being revised into a new draft Fundraising Guidance. While the new Guidance is not yet available, it is likely to be released early in 2012. The new Guidance is expected to be a significant improvement but will be a longer document at approximately 38 pages compared to the current version’s 31 pages. Given this, it will be important for charities to be familiar with the entire document, including all appendices at the end of the Guidance, once it becomes publicly available. Although improved, the new Guidance is anticipated to still be a complex document and will therefore require careful reading. CRA has advised that the new Guidance will not represent a new policy position but rather will provide information on their current treatment of fundraising under the Income Tax Act (“ITA”) and common law. The new Guidance will provide general advice only and will be based on principles established by caselaw that fundraising must be simply a means-to-an-end, rather than an end-in-itself. The new Guidance will apply to all registered charities and to both receipted and non-receipted fundraising. An organization that is carrying out unacceptable fundraising may result in a denial of charitable registration or, for existing registered charities, sanctions or even revocation of charitable status. Watch for the release by CRA of the new Guidance early in the new year. For more details on the new Guidance, see the presentation by Terrence S. Carter entitled “Complying with CRA's New Fundraising Guidance” at http://www.carters.ca/pub/seminar/chrchlaw/2011/index.htm.
