Saskatchewan’s Charitable Fund-raising Businesses Act (“Act”) has been in force since 2003. The Act requires licensing of all businesses which solicit contributions or manage fund-raising on behalf of a charitable organization from residents of Saskatchewan. The Act provides that no person shall act as a fund-raising business without holding a licence under the Act. The Act excludes employees of charitable organizations or entities which provide only consulting and are not involved in solicitation. Organizations operating in Alberta should note that the Act shares similarities with Alberta’s Act.
The term “solicitation” is defined broadly to include all requests to a member of the general public for a contribution where it is stated or implied that all or part of the money will be used by a charitable organization for a charitable purpose. Solicitation includes requests made door to door, by phone, by mail, or “any other prescribed solicitation.”
The Act requires that a written “Fundraising Agreement” be entered into between the charity and a fund-raising business. The Act identifies some of the basic points to be covered in such an agreement and a copy must be filed with the provincial registrar 30 days before a fundraising campaign begins. The registrar’s view is that the Act applies equally to businesses based in Saskatchewan and those based outside the province which solicit donations in Saskatchewan on behalf of charities. It is therefore likely that a number of individuals and corporations operating outside of Saskatchewan may not be in compliance with the Act. There are currently 10 fund-raising businesses registered in the province.
There is no doubt that if the business soliciting donations has people soliciting door to door, that they are required to comply with the Act. Activities such as telephone or mail solicitation are less clearly caught by the Act.
The penalty under the Act for a first offence in the case of an individual ranges from a fine not exceeding $10,000 to imprisonment not exceeding one year, or both. In the case of a corporation, a first offence is a fine not exceeding $25,000, although any directors, officers, or agents of the corporation who “directed, authorized, assented to, acquiesced in, or participated in the commission of the offence” are guilty of the offence and liable for the penalty on the same basis as an individual. According to the registrar, there have not yet been any prosecutions or fines for violations of the Act to date.
Charities should ensure that if they are hiring an external fundraiser to solicit in Saskatchewan, that the business is legitimate and licensed. The Act does not create an offence for a charity if their external fundraiser is not licensed, however, a fund-raising business licensed under the Act offers some protection for the charity. The fund-raising business might be required to be bonded and it will be required to file the fund-raising agreement with the registrar who examines it for compliance with the Act. Counsel and management for fund-raising businesses should be aware of the potential penalties for failing to comply with the Act.
Finally, the Act allows a charity to bring a court application to have their agreement with a fund-raising business licensed under the Act declared void because it is contrary to public policy. Although this type of application is permissible in any province under contract law, the ability to being such an applicable pursuant to the Act brings some certainty and structure to such an application. On a determination of this type of court application, the court is directed to take into account the provisions of the Act and its regulations.
Charities and fund-raising businesses seeking advice on Charitable Fund-raising Businesses Act are encouraged to contact us.