A group of prominent lawyers have published an open letter urging the government to change the rules that govern how Canadian registered charities are permitted to work with third party organizations in Canada and around the world to further their charitable purposes. It is rare for a group of practicing lawyers to take the step of publishing an open letter. The letter highlights the seriousness of the issues being raised.
The current rules require Canadian registered charities to enter into complex and cumbersome contractual arrangements when they collaborate with third parties that are not Canadian registered charities or “qualified donees” under Canadian tax law. The result is that charities must spend significant resources on complying with rules that are unnecessarily onerous, funds that could otherwise be applied directly towards fulfilling their charitable purposes. In some cases, the rules hinder charities’ ability to fulfill their purposes by making it simply too difficult for them to structure workable collaborations with potential project partners.
The timing of this call for change is particularly critical. The COVID-19 pandemic has heightened the need for coordination and collaboration amongst organizations that are working to address the difficult health, social, and economic challenges of our time.
On February 8, 2021, Senator Omidvar introduced a bill in the Senate that proposes changes that would go a long way towards addressing the issues raised in the letter. Bill S-222, the Effective and Accountable Charities Act, would enable registered charities to work more flexibly and efficiently with third parties, while still respecting the legitimate need for appropriate oversight and accountability to ensure that their funds are used for charitable purposes. These proposed changes have been a longstanding ask of lawyers and other groups in the charitable sector.
We, the Members of the Social Impact Group at Miller Thomson, will be sharing this letter as widely as possible. We encourage you to do the same by sharing the letter with your contacts, colleagues, and friends on social media and wherever else you choose to engage.