{"id":5953,"date":"2021-08-05T10:00:55","date_gmt":"2023-08-12T08:04:04","guid":{"rendered":"https:\/\/www.millerthomson.com\/advisory-committee-on-the-charitable-sector-focuses-on-reconciliation-national-data-strategy-and-charity-designations-in-second-report\/"},"modified":"2026-03-18T12:07:14","modified_gmt":"2026-03-18T16:07:14","slug":"advisory-committee-on-the-charitable-sector-focuses-on-reconciliation-national-data-strategy-and-charity-designations-in-second-report","status":"publish","type":"post","link":"https:\/\/www.millerthomson.com\/en\/insights\/social-impact\/advisory-committee-on-the-charitable-sector-focuses-on-reconciliation-national-data-strategy-and-charity-designations-in-second-report\/","title":{"rendered":"Advisory Committee on the Charitable Sector focuses on reconciliation, national data strategy, and charity designations in second report"},"content":{"rendered":"\n

The second report of the Advisory Committee on the Charitable Sector released on April 28, 2021 (the \u201cReport<\/strong>\u201d) expands on its first report<\/a>, adding eight recommendations for sector reforms.<\/p>\n\n\n\n

The Advisory Committee on the Charitable Sector (the \u201cACCS<\/strong>\u201d), established in 2019, is a permanent forum for the Government of Canada to gather feedback from the charitable sector on emerging issues and to engage in dialogue to promote the regulatory environment\u2019s support of charities.  The ACCS comprises fourteen individuals who have extensive experience in the charitable sector, including researchers and academics, legal experts, and representatives of registered charities, national umbrella organizations and professional associations. Susan Manwaring, the lead of our Social Impact Group, is on the ACCS and had direct input into the Report.<\/p>\n\n\n\n

Broadly, the advice and recommendations of the ACCS focus on the following three areas:<\/p>\n\n\n\n

    \n
  1. Evolving the institutional framework to effectively advance public purposes and to maximize sector impact;<\/li>\n\n\n\n
  2. Ensuring financial sustainability within the sector; and<\/li>\n\n\n\n
  3. Establishing modern governance for the sector.<\/li>\n<\/ol>\n\n\n\n

    The eight recommendations of the ACCS contained in this second Report were researched and developed by three of the five ACCS working groups: the Indigenous Peoples Working Group (\u201cIPWG<\/strong>\u201d), the Charitable Sector Data Working Group (\u201cCSDWG<\/strong>\u201d), and the Purposes and Activities Working Group (\u201cP&AWG<\/strong>\u201d).<\/p>\n\n\n\n

    Indigenous Peoples Working Group<\/h2>\n\n\n\n

    The first four recommendations focus on the utility of the regulatory system for Indigenous organizations and the relationship between Canada Revenue Agency\u2019s (\u201cCRA<\/strong>\u201d) Charities Directorate and Indigenous peoples.<\/p>\n\n\n\n

    The IPWG consulted with Indigenous peoples and organizations regarding how their relationship with the Charities Directorate can be strengthened.  In particular, IPWG learned that many Indigenous peoples and Indigenous organizations view the regulator negatively and find its rules unnecessarily cumbersome.<\/p>\n\n\n\n

    In the Report, the ACCS calls for increased open dialogue between the Charities Directorate and Indigenous organizations and urges the Charities Directorate to do the following:<\/p>\n\n\n\n

      \n
    1. Update its guidance documents to reflect the Government of Canada\u2019s commitment to reconciliation;<\/li>\n\n\n\n
    2. Improve its relationship with Indigenous communities and Indigenous-led charities;<\/li>\n\n\n\n
    3. Make a comprehensive and long-term commitment to building greater cultural competency within its staff; and<\/li>\n\n\n\n
    4. Implement a new system to respond to an Indigenous organization that applies for qualified donee status as a \u201cmunicipal or public body performing a function of government.\u201d<\/li>\n<\/ol>\n\n\n\n

      These recommendations are in line with many aspects of reconciliation being pursued in Canada.\u00a0In particular, Recommendation 4 calls for the Charities Directorate to defer to experts on Indigenous governance and government forms for determining whether an organization qualifies as a municipal or public body performing a function of government. Relying on internal policy fails to recognize that Indigenous peoples\u00a0 and organizations are based on governance structures that may differ from those used by Canada.<\/p>\n\n\n\n

      Charitable Sector Data Working Group<\/h2>\n\n\n\n

      Data or the lack of a central source of data, is a significant sore point for many who work in the charitable sector.\u00a0The lack of data makes it very difficult to address policy issues or positions taken by third parties about the charitable sector.\u00a0Three of the ACCS\u2019 recommendations call for more effective collection and dissemination of data on the sector with the goal of improving evidenced-based policy.\u00a0CSDWG learned from consultations that there is extensive data collected by sector organizations and stakeholders, including non-profits, charities, governments and funders.\u00a0Despite this wealth of data, the working group concludes, the absence of a consistent terminology and methodology make analysis and dissemination of data challenging.\u00a0The working group also heard that there is limited diversity information, which makes it difficult to create evidenced-based policy to support diversity and inclusion.<\/p>\n\n\n\n

      The ACCS\u2019 data recommendations are as follows:<\/p>\n\n\n\n

        \n
      1. That the Government of Canada develop a cross-departmental \u201cNational Charitable Sector Data Strategy,\u201d to support the coordination, standardization, integration, and accessibility of data on the sector, and to enhance evidence-based programs, policies, and practices;<\/li>\n\n\n\n
      2. That the CRA facilitate consistency in data reporting and reduce the burden on the charitable sector by leveraging existing data and data techniques; and<\/li>\n\n\n\n
      3. That relevant federal departments who collect information on the charitable sector (e.g. Employment and Social Development Canada, Statistics Canada, Canadian Heritage, Corporations Canada and others) work with a \u201cSector Advisory Group on Data\u201d, to determine appropriate mechanisms to collect diversity information on the directors and paid employees of charities.<\/li>\n<\/ol>\n\n\n\n

        What is clear from these recommendations is that the ACCS recognizes that centralized data means a coordinated across government approach.\u00a0 The Charities Directorate has access to data related to the filing of the T3010 Returns. This recommendation requires the Minister of Revenue to work with other ministries.<\/p>\n\n\n\n

        Purposes and Activities Working Group<\/h2>\n\n\n\n

        The ACCS\u2019 final recommendation proposes an amendment to the Income Tax Act<\/em> (the \u201cITA<\/strong>\u201d) to simplify the categories of registered charities.\u00a0When a charity is registered, it will be designated by the CRA as a charitable organization, private foundation or public foundation.\u00a0These \u201cdesignations\u201d or categories of registered charities are defined in the ITA.<\/p>\n\n\n\n

        The ACCS argues that the current three categories are cumbersome and no longer relevant and make the regulatory framework difficult to navigate.\u00a0The ACCS recommends replacing the three categories with two categories: public charity and private charity.<\/p>\n\n\n\n

        The definition of \u201ccharitable organization\u201d requires it to be constituted and operated for exclusively charitable purposes and to devote all its resources \u201cto charitable activities carried on by the organization itself.\u201d\u00a0However, this reference to activities is not included in the definition of \u201cpublic foundation.\u201d\u00a0CRA has interpreted this to mean that the ITA \u201cgenerally requires that charitable organizations spend no more than half their income as gifts to qualified donees, otherwise they will be re-designated as public foundations.\u201d<\/p>\n\n\n\n

        Conversely, if a charity designated as a public foundation begins granting 50% or less of its income to other qualified donees and instead devotes the other portion of its income to its own activities, it would be re-designated by CRA as a charitable organization.<\/p>\n\n\n\n

        The ACCS notes that there is oftentimes little distinction between the operations of many public foundations and charitable organizations \u2013 both types of charity can spend their income on a mix of their own charitable operations and grants to qualified donees.\u00a0The ACCS sees benefit in focusing on the public-private dichotomy, rather than categorizing charities based on their level of granting activities.<\/p>\n\n\n\n

        The ACCS recognizes that while most of the recommendations do not require legislative amendments, their implementation will require significant time and resources. The ACCS continues to consult the sector through its working groups and released its third report in July.<\/p>\n\n\n\n

        The Report is available on the CRA\u2019s website<\/a>.<\/p>\n\n\n\n

        Miller Thomson\u2019s Social Impact Group<\/a> will continue to keep you updated on the work of the ACCS and a summary of the third report will be released shortly.<\/p>\n","protected":false},"excerpt":{"rendered":"

        The second report of the Advisory Committee on the Charitable Sector released on April 28, 2021 (the \u201cReport\u201d) expands on its first report, adding eight recommendations for sector reforms. The Advisory Committee on the Charitable Sector (the \u201cACCS\u201d), established in 2019, is a permanent forum for the Government of Canada to gather feedback from the […]<\/p>\n","protected":false},"author":100,"featured_media":14389,"parent":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[535],"insight-format":[416],"class_list":["post-5953","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-social-impact"],"acf":[],"yoast_head":"\nAdvisory Committee on the Charitable Sector focuses on reconciliation, national data strategy, and charity designations in second report | Miller Thomson<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.millerthomson.com\/en\/insights\/social-impact\/advisory-committee-on-the-charitable-sector-focuses-on-reconciliation-national-data-strategy-and-charity-designations-in-second-report\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Advisory Committee on the Charitable Sector focuses on reconciliation, national data strategy, and charity designations in second report | Miller Thomson\" \/>\n<meta property=\"og:description\" content=\"The second report of the Advisory Committee on the Charitable Sector released on April 28, 2021 (the \u201cReport\u201d) expands on its first report, adding eight recommendations for sector reforms. 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