By Mark Blumberg
An interesting story appeared in the Toronto Star on December 15, 2024 by Max Binks-Collier of the Investigative Journalism Bureau. The article is entitled “This Canadian cancer charity tells the public it spends most of its donations on charitable works. Financial records tell a different story”. It is definitely worth reading. It shows that perhaps, unfortunately, today, the main oversight of charities is provided by journalism and not regulators.
When our main charity regulator is only going to audit 200 charities per year, the public is never going to have much confidence that problematic behaviour does not frequently occur behind the scenes.
It will be interesting to see if CRA does anything about this particular charity. Who knows, they could have been auditing the charity for years or decades, but unfortunately, as I have written about for a long time, CRA cannot say anything about non-compliant behaviour of any registered charity until there is either a penalty, suspension or revocation under the ITA.
By the way, if the Charities Directorate has also audited a charity and found the charity has done nothing wrong – it is also precluded from putting out a statement about that.
In an age when we want more donations from the public and people are increasingly stressed with bill payments, we leave it to the average donor to do extensive and time-consuming due diligence on charities. Makes no sense to me. Many donors will choose to simply not give and that is unfortunate on a number of levels – not just financial but also in terms of engagement with organizations and their issues.
Here is a submission that we recently made to the Finance Committee of the House of Commons on improving transparency in the non-profit and charitable sector: Blumbergs’ Pre-Budget Submission for the 2025 Canadian Federal Budget (see link below). We have been making similar submissions for about a decade with only minor impact.
I am going to comment on an aspect of the story not touched upon in the article.
This appears to be a large charity – taking in about $15-20 million per year in the last couple of years. See our CharityData information on it from their T3010s filings. These are the T3010s that this charity filed with CRA, and it may not be accurate.
The group is a federal Canada Not-for-profit Corporations Act (“CNCA”) corporation. You can see them listed on the Federal database of corporations. They identify themselves as being “non-soliciting”. It is not clear how an organization that gets so much by way of donations can be “non-soliciting.” The threshold to be a soliciting corporation under the CNCA is only receiving $10,000 of public funds in a year, which is very low. This group is, therefore, probably soliciting. They have never filed their financial statements with Corporations Canada.
They probably should have filed about 9 or 10 financial statements beginning around 2013. While Corporations Canada has started warning CNCA corporations that they could be dissolved if they don’t do their filings, because they identify as “non-soliciting” Corporations Canada would probably not be aware that the group is supposed to be filing their financial statements.
I have cautioned donors when it comes to largely national charities under the CNCA that are soliciting – if they have not filed their financial statements with Corporations Canada, DO NOT DONATE TO THEM.
When a charity does not file financial statements with Corporations Canada, is it just a mistake/oversight, or is it deliberate? I have no idea. If you really care about the group, perhaps let them know they need to do the filing. It only takes about 5 minutes to file the financial statements with Corporations Canada, and it does not cost anything. But if they don’t file the forms, better to avoid donating to them. That a soliciting corporation under the CNCA does file their financial statements does not make them a great group – but at least you have easy access to the financial statements if you want to review them.
There are so many recent examples of massive problems that could have been avoided if donors would not donate to registered charities or RCAAAs that don’t do their mandatory filings with Corporations Canada. The same applies to government agencies. How can the Federal government have given money to Hockey Canada and the Canadian Soccer Association if they did not do their mandatory Federal filings?? Sounds like absolute negligence to me.
Mark Blumberg is a lawyer at the law firm of Blumbergs Professional Corporation in Toronto and works almost exclusively in the areas of non-profit and charity law. He has a B.A. in Political Science from the University of Toronto, an LLB from the University of British Columbia and an LLM from Osgoode Hall Law School in Tax Law. Mark is also the editor of www.CanadianCharityLaw.ca – a Canadian charity law blog. He also manages www.CharityData.ca which is the largest portal in Canada with data on Canadian registered charities and www.SmartGiving.ca, a website encouraging Canadians to donate to legitimate charities.
https://www.canadiancharitylaw.ca/blog/blumbergs-pre-budget-submission-for-the-2025-canadian-federal-budget/
Related Posts
