by Dev User | Oct 31, 2019 | Uncategorized
Oct 2019 Charity & NFP Law Update
A handout is now available from a presentation given by Terrance S. Carter on the topic of Legal Challenges and Options for Boards of Religious Institutes in Transition at the Association of Treasurers of Religious Institutes 32nd Annual Conference, on September 29, 2019 in Calgary. The handout will be of interest for Catholic and other religious organizations having to deal with the intersection of civil law and canon law, particularly where these areas of law touch on the role of directors in dealing with religious organizations in transition, which may arise in part due to declining membership. The handout identifies legal challenges that boards of religious institutes in transition can face as civil law entities, as well as some options and suggestions to consider in response. The handout can be accessed here: Legal Challenges and Options for Boards of Religious Institutes in Transition.
Read the October 2019 Charity & NFP Law Update
by Dev User | Oct 31, 2019 | Uncategorized
Oct 2019 Charity & NFP Law Update
A On October 15, 2019, the Canadian Council for International Co-operation (the “CCIC”), a national association representing international development and humanitarian organizations, released a policy brief titled “Directed Charities and Controlled Partnerships” (the “Policy Brief”).
The Policy Brief discusses how registered charities that want to operate outside Canada are seriously restricted in effectively working with their partners by (i) the CRA’s requirement that registered charities exercise direction and control over the funds they disburse through third parties that are not registered charities or other types of qualified donees, and (ii) Canada’s onerous anti-terrorism regime. Based on research and interviews with national charity coalitions from six other member countries of the Organization for Economic Cooperation and Development (“OECD”), as well as input from the International Civil Liberties Monitoring Group, the Policy Brief made a number of recommendations concerning how the Government of Canada can improve the legal framework governing the charitable sector.
First, the Policy Brief explains the requirement in the CRA’s Guidance CG-002, Canadian registered charities carrying out activities outside Canada (“Guidance CG-002”) on how Canadian charities may operate outside Canada with the assistance of intermediaries abroad. This may be done by maintaining direction and control over the use of the charity’s resources by the intermediary, with strict conditions imposed on such a “partnership.” Specifically, Guidance CG-002 reflects the CRA’s interpretation of the ITA requirement under paragraph 149.1(1)(a.1) that “all the resources of [a charitable organization be] devoted to charitable activities carried on by the organization itself.” The Policy Brief states that Canadian charities operating internationally are required by the CRA to “assume dominance over their partners […] rather than pursuing equal, respectful, and mutually beneficial relationships,” something contrary to the central tenet of promoting effective international development of promoting local ownership.
As such, the Policy Brief supports the recommendation in the Special Senate Committee on the Charitable Sector’s (the “Special Senate Committee”) final report, discussed in Charity & NFP Law Bulletin No. 451. The Special Senate Committee recommended, among other things, to amend Guidance CG-002 to
replace the direction and control requirement with an expenditure responsibility test that emphasizes careful monitoring of financial expenditures by intermediaries and partners rather than substantive or operational control, and thereby bringing it more in line with the policies in effect in other OECD
countries.
Second, regarding Canada’s anti-terrorism regime, the Policy Brief refers to the powers granted to the Minister of Public Safety and Emergency Preparedness and the Minister of Revenue under the Charities Registration (Security of Information) Act. These Ministers may reject an application for charitable status or revoke such status with respect to a registered charity that they believe has made, makes or will make available any resources, directly or indirectly, to a terrorist entity or an entity engaging in terrorist activities, as defined in the Criminal Code. The Policy Brief states that, although preventing Canadian
charities from being used as a tool to support terrorism is an important policy goal, many humanitarian organizations work in conflict zones where listed non-state armed groups control parts of the territory. Accordingly, the strict prohibition on the flow of any resources to or through such organizations would
often result in certain peoples being denied humanitarian aid. As a result, these provisions work to discourage humanitarian organizations from operating in conflict-affected areas where needs may be most urgent.
In response, the Policy Brief recommends “the repeal or amendment of the Charities Registration (Security of Information) Act in favor of the use of the Criminal Code provisions, where necessary.” It also recommends the adoption of an exemption to the Criminal Code’s anti-terrorism provisions for “impartial humanitarian assistance undertaken with due diligence,” as well as a limitation on the definition of “facilitation” in the Criminal Code to situations where the facilitator knowingly facilitates a terrorist activity.
Overall, the Policy Brief highlights the constraints imposed on the charitable sector working globally because of the current regulatory and legislative provisions relating to direction and control and the antiterrorism legislation. The Policy Brief makes significant recommendations to reform both frameworks and to engage in a broad and systematic consultation and dialogue with Canadian charities.
Read the October 2019 Charity & NFP Law Update
