Christian Charities Shut Down by the CRA?!
“Give to Caesar what is Caesar's" Luke 20:25
Last week, an article came out indicating two charities had their status removed – essentially, they were shut down by the CRA. You can find the article here. One of them was the Evangelical World Outreach of Canada, Inc. On the surface of it, it could feel like a 'vendetta' of the CRA towards Christian charities. But let's slow down a minute. Let's ask a different question: What are the actual expectations and responsibilities that the CRA requires of us as Christian charities, churches and schools?
The following three key issues are worthy of consideration for charities, churches and schools. There is a lot more to say, but these three are the big ones. Decide for yourself if it's a legitimate government behaviour.
1. In order to qualify for the fiscal advantages of being a charity in Canada, the government has the expectation that your finances are clear and transparent, and that the money coming in and going out can be easily understood. This is an issue of transparency. The government deems that it has the right to be able to follow the fiscal paper trail to ensure that your funds are being used for the very purposes (objects) for which your organization exists. If you are transparent and make it obvious that you are fulfilling your purposes, you maintain your charitable status and continue to receive all the associated advantages.
2. Said with the most positive intent, the CRA simply wants to ensure that your charity is truly accomplishing the goals it was established to pursue. In some cases, charities have been approved and then, over time, have gradually shifted their activities in ways that fall outside what is acceptable for a registered charity in Canada – while still receiving the fiscal benefits of charitable status. Because of this, the government seeks to confirm that your organization’s work continues to fall within the scope of the four acceptable charitable purposes in Canada.
- Relief of Poverty: Helping people who are in financial need or vulnerable circumstances.
- Advancement of Education: Providing structured, legitimate educational activities that improve knowledge or skills.
- Advancement of Religion: Supporting religious beliefs, practices, and institutions.
- Other Purposes Beneficial to the Community: A broad category that includes purposes the courts have recognized as charitable—such as health care, community improvement, environmental protection, and more—as long as they provide a demonstrable public benefit.
Consequently, your paperwork (ie. minutes and other records) needs to show that you are staying true to your word. "We are a charity with these purposes, and we will ensure we continue to pursue that very purpose(s)."
3. Maintain Direction and Control! All of the above adds up to the broadest way of thinking about your organization's leadership responsibility: maintaining 'Direction and Control.' These two words are actually the most helpful when it comes to applying the 'HOW' to running your charity. Direction speaks to knowing where you are going (ie. having a clearly developed Strategic Plan) and then constantly being aware of all the measureables (Controls) that will demonstrate to your board if you are properly steering toward your perceived organizational destination. It's why the article aformentioned concluded with this quote from the CRA: "We were not provided with any other information to demonstrate that the organization maintained direction and control over the use of its resources."
At minimum, what the rules point to is the expectation of ensuring your governance and leadership practices are prudent and transparent – formative words used in the legal duties of Board directors all the way to the Supreme Court.
Additionally, the CRA’s language can be a positive rubric for how you think about your board and senior leadership functions. In my humble opinion, their expectations are fair. And, the expectations may actually be useful to reflect on, as a board—not only for the purpose of meeting the obligations of the government, but also to strengthen the capacity of your board members, the board itself, and the senior staff leaders in achieving exactly what God designed you to accomplish!
Don’t hesitate to contact Shepherd Consulting if you are at all intrigued about are thinking about getting charitable status, setting up your charity's board practices, or learning more about board governance and effectiveness in achieving your purposes – even while you meet CRA guidelines. Training, teaching, and other leadership processes depend on a good knowledge and practice of this dynamic.
SHEPHERD'S SPOTLIGHT: Board Training Opportunities
Whether in a retreat centre in Canada or a Zambian classroom, board training can be enjoyable, educational, and faith-building. Concentrating not just on legal duties, but on the joyously enriching aspects of what it takes for your leadership group to flourish in its setting can be a constructive and formative process that will create a Godly impact through your leaders for years to come!
If you are a Christian leader in a charity, school, or church setting, don't hesitate to reach out for support.
Rev. Dr. Darren Roorda (Founder and Principal Consultant) has served in Nonprofit Leadership for over 23 years. He is proud to work with a wonderful group of associates. His roles as Executive Director, International Liaison, Project Manager, Pastor, and even Official Lobbyist have helped hone his education in Leadership, Governance, and Theology.
D. Min., Pro Dir, Partner of The Alliance for Board Effectiveness. Professional Member of the Canadian Centre for Christian Charities
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email: info@shepherdconsulting.ca
