What donors can do to improve transparency in Canada's charity sector
Following the Charities Directorate's revocation of one of Canada's largest charities, Beth Oloth in January 2019, comments were made about what took the Charities Directorate so long.[i] Expert charity lawyer Mark Blumberg commented "if abuses like these are allowed to continue it will undermine the public’s confidence in the whole charitable sector” and the government should be embarrassed the charity was allowed to operate for so long.
Canada's current laws muzzle the Charities Directorate from informing the public. The Charities Directorate must follow due process and do exhaustive audits and investigations. In the Beth Oloth case, the investigation was dragged on by lawyers and spanned more than two years. It is alarming that in these two years under investigation, Beth Oloth tax receipted $49.9 million in donations and received an additional $53.9 million from private foundations.
Currently, the Charities Directorate cannot suspend “trading” or notify donors until it makes its final decision. In contrast, British laws allow its Charities Commission to prominently notify the public when a charity is under investigation. Canada’s laws can change to help the Charities Directorate better police the charity sector and inform the public.
Yet, rather than asking what more Ottawa can do, shouldn’t we be asking ourselves what we can do to make our charity sector what we want it to be?
Charity Intelligence believes we donors need to become more active. We need to ask charities to be financially transparent in exchange for our support. We need to raise our expectations that charities follow best practices.
Just as our communities are kept safer by watchful neighbours, our charity sector needs us all to be vigilant. We must help prevent charity fraud or tax abuse. This job is too big for one regulator, or single organization. Canada’s charity sector will be stronger and cleaner when we all step up. Let’s start now.
- Know your rights as a donor. Rights are just platitudes unless respected. The Donor Bill of Rights, Article III states, “All donors have the right to have access to the organization’s most recent financial statements.”
- Do your homework and research the charity. Check that the charities you support have posted financial statements on their website, especially with large charities with more than $1 million in annual donations. For large charities, are these financial statements audited? Contact the charity’s management team and directors to share your thoughts.
- Hold your support until your charity is financially transparent is what Charity Intelligence recommends.
- Report suspicions of charity fraud, please contact the Charities Directorate.
Beth Oloth's charity status revoked - one of Canada's largest charities is a case study showing donors early warning signals February 2019
Kupas Hachesed Meoroth revoked July 2022
Gates of Mercy - Charities Directorate finds curious connections with revoked charity Beth Oloth, April 2019
Why charity transparency matters, March 2019
[i] Stewart Bell, “Government revokes charity status of Canadian Jewish group that supported ‘foreign armed forces’, Global News, January 28, 2019
Revocation of Beth Oloth Charitable Organization, Canadian Gazette, January 12, 2019
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