The View from the Mountaintop

By: Adam Aptowitzer 

As a member of the charity community we, like everyone else, are getting the sense that society is paying closer attention to the operations of charities than they have in quite some time. While charities obviously have an interest in these happenings, for those in the trenches such policy debates are often esoteric and not of practical concern until put into practice by the powers that be. Nevertheless, even the smallest charity must have some idea of what lies in wait down the road if they are to be able to plan for the future. So, in the spirit of the season, we present our top ten list of issues to watch out for in 2011.

1.       The Canada Not for Profit Corporations Act - While we cannot know for sure the new federal corporate act will be declared in force in 2011, its impending enforcement should be a matter of considerable planning for organizations incorporated under the Canada Corporations Act. These entities should start turning their minds to a bylaw review as soon as possible with an eye to complying under the new law.

2.       Bill C-470 - This is the bill being debated in Parliament which, if passed in its current form, will force charities to publish a list of anyone making more than $100,000 in salary. This invasion of privacy may result in senior employees resigning or otherwise moving to act as outside consultants rather than employees (although this may not prove effective).

3.       The Ontario Not for Profit Corporations Act - One would expect this law to pass in 2011. Similar to its federal cousin it will force charities incorporated in Ontario to re-examine their organization in order to best ensure compliance under the new law.

4.       DQ administrative spinoffs - The months since the last budget have not calmed our fears of the consequences surrounding the elimination of the disbursement quota. The time will come when the CRA will take matters into its own hands by publishing a policy on acceptable spending practices. We do not yet know if it will be reasonable or where the CRA will stand but we expect that before long we will know something.

5.        The Federal budget - Just kidding, there is unlikely to be anything of significance for charities.

6.       CRA's new forms - In its November newsletter the CRA announced that several forms have been redesigned (the most important being the yearly informational return the T3010-1). Charities can expect the following new forms in 2011:

Form T3010-1, Registered Charity Information Return;

Form TF725, Registered Charity Basic Information Sheet;

Form T1235 (09), Directors / Trustees and Like Officials Worksheet;

Form T1236 (10), Qualified Donees Worksheet / Amounts Provided to Other Organizations; and

Form T2081, Excess Corporate Holdings Worksheet for Private Foundations.

7.       CRA's New Policies - Some areas of the sector will be affected by new CRA policies. For charities operating well within the law in these areas it is unlikely that new CRA documents will give charities additional room to operate. But for those at the cutting edge, a more exact understanding of the CRA's positions may help them conduct their affairs. The policies to expect are:

Guidance on Arts Organizations and Charitable Registration

Promotion of Animal Welfare and Charitable Registration

Charitable Purposes and Activities for Protecting the Environment

Complementary and Alternative Health Services

Using an Intermediary to Carry out a Charity's Activities within Canada

8.       The Big Get Bigger The Small Get Smaller - Statistics show that the number of small donations in Canada are on the decline. Conversely, tax changes have encouraged the donation of larger gifts. Look to see the continued rise of the big gift.

9.       More Ado About Nothing - For years now it seems that the sector continually generates new and good ideas about its governance. Unfortunately, these ideas are rarely acted upon. 2011 is likely to generate similarly vibrant discussion with little or no practical application.

10.   Donation of Private Company Shares - Recent experience shows that the donation of private company shares is on the uptick. Expect this trend to continue as the global economy continues to strengthen and the opportunity to use up capital losses accrued over the past few years presents itself.

Whatever 2011 holds in store for the sector, we hope that it is a year of health, peace, prosperity and charity.