Changing a Charity’s Director/Trustee Information

December 6th, 2013

If you’re the director, trustee, or other official of a charity, make sure the CRA is up to date on your information or they may refuse to speak with you about the charity’s matters.

From the CRA’s new webpage on changing officials’ information:

The Charities Directorate takes the security of all taxpayer information very seriously. We can only discuss a charity’s file with individuals we have on file as representing the charity. Therefore, it is in the best interest of your charity to make sure we have the most recent and accurate information available for directors, trustees, and like officials.

Although this information is included on Form T1235, Directors/Trustees and Like Officials worksheet that you submit with your annual registered charity information return, changes can happen between filings. To add a new director, trustee, or like official during a fiscal period, we need a written request that should include all of the following information:

  • charity’s name
  • charity’s registration number
  • individual’s name
  • individual’s position
  • individual’s date of birth
  • individual’s contact information (home address and telephone number)
  • arm’s length relationship with other directors, trustees, or like officials
  • effective date

Date the letter and include the printed name and signature of someone authorized to sign on behalf of the charity that the Charities Directorate has on file. Check your governing documents to see if more than one signature is required.

Also be sure to inform us in writing if a director, trustee, or like official no longer represents the charity.

Changing a Charity’s “Authorized Representative”

December 6th, 2013

Outside of any directors/trustees/officials that they have on file for a charity, the CRA’s Charities Directorate will only talk to “authorized representatives” about a charity’s matters.

From the CRA’s new webpage on authorized representatives:

The Charities Directorate needs consent from a charity or applicant organization to communicate with a representative for charity-related matters. An authorized representative can be an employee, volunteer, or another individual such as a lawyer, accountant, or bookkeeper.

To add or change the name of an authorized representative, you can:

Date the letter and include the printed name and signature of a director, trustee, or like official that the Charities Directorate has on file.

Also be sure to inform us in writing if an authorized representative no longer represents the charity or applicant organization.

The ISNA: A Cautionary Tale for Canadian Charities Operating Abroad

September 30th, 2013

It’s been all over the news lately. The Canada Revenue Agency has stripped the registered charitable status of the Missisauga-based Islamic Society of North America (ISNA) partly due to suspicion that it was funding terrorists.

For its part, the ISNA denies any intention to fund terrorist activities. It apparently entered into a funding arrangement with a charitable organization in Pakistan with the stated intention of providing relief to orphans. That charitable organization turned out to be one arm of a larger organization that also includes a military arm that has been listed as a terrorist entity by the Council of the European Union.

Whether the ISNA knew about the terror tie or not, its situation should be a warning to every Canadian charity that is operating overseas. The ISNA’s fundamental mistake was to enter into an agreement to funnel money to an organization that was not a qualified donee without taking the proper precautions.

Canadian charities can only transfer money to qualified donees, unless the charity and the recipient enter into a written agreement that gives the charity the necessary direction and control over what is done with the money it transfers over. Charities cannot simply start funnelling money to individuals or organizations outside of Canada without such an arrangement in place.

Taking the ISNA at its word that it did not intend to fund terrorism, it should have been careful to maintain carefully-recorded oversight as to what was being done with its money. Its failure to do so attracted the unwelcome attention of the CRA and allowed the charity’s funds to go to something distinctly different than orphan relief.

Many innocent charities make the same mistakes as ISNA and put themselves at risk for the same nightmare situation. If your charity is operating overseas or plans to start, Drache Aptowitzer LLP can help you ensure that the necessary controls are in place so that your hard-raised funds, and your charitable registration, are protected.