Transcript

The CRA usually steps up monitoring of activities of a Registered Charity during election campaigns and we will take appropriate measures if a registered charity undertakes excessive or partisan political activities. Registered charities may take part in some political activities as a way of furthering their charitable programs. However, partisan political activities, that is the direct or indirect support of or opposition to any political party or candidate, that's prohibited. That is, to repeat, some political activities are allowable. Generally, that rule is up to 10% of a charity's resources may be spent on allowable political activities, and there are some political activities which are prohibited, and these are partisan political activities. If you're looking for more information about political activities, if this is a concern for your charity or you just want more information, I'm going to refer you to our website and there you'll see our Political Activities Policy, which is CPS-022, CPS-022. There's a good breakdown on the differences between allowable political activities, partisan political activities, and what are the limits.

The next issue, then, is Business Activities. A charity can carry on limited related business activities. What is a related business activity? It is an activity that is subordinate or linked to the charity's programs or run substantially all by volunteers. That is, it's a business that is linked or subordinate to the charitable program, or an activity run substantially all by volunteers. If the business ceases to be subordinate or linked to the charitable program, or is not run substantially all by volunteers, then this would be a contravention of the Act. This usually occurs, or we've seen this occur, with fundraising programs that start off small, but then evolve and become an end in itself. Examples of unrelated business that may have started out like this, tournaments, gaming activities, or the sale or rental of properties, are some examples that we have seen. If you're carrying on an unrelated business activity, this could lead to financial penalties or revocation, so bear that in mind. As well, if you're designated as a private foundation, this is key, there's not too many private foundations of all the charities out there, but if you're designated as a private foundation, then you are prohibited from carrying out any business activity. If you are looking for more information about this, I refer you, again to our Guidance on our website, CPS-019 - What is Carrying on a Business for more information about that.

Moving on to our next compliance issue, Transactions with Directors. First of all, transactions with Directors, it should be approved at the board level. Factors which should be considered when considering this type of transaction is A, is it in the best interest of the charity? And is it the best deal for the charity? As well, I should note, it's generally recommended that the Director involved in such a transaction should remove him or herself from these discussions in order to ensure that there is no undue benefits which could occur. Charities, as I mentioned about the above due benefits, they need to be careful that they aren't conferring these types of benefits because were they to do so, this, as well could lead to financial penalties or revocation.