Toronto Star: Ottawa targets rogue charities
Charities that use the bulk of their donations on high-priced fundraisers, or lie to donors to get money, face tough new rules.
Toronto Star, Jul 12, 2009 | FULL STORY
Charities that use the bulk of their donations on high-priced fundraisers, or lie to donors to get money, face tough new rules making it easier for the government to suspend or revoke their charitable status.
The guidelines, introduced after a year of consultation, attempt to bring order to the 83,000 charities in Canada, ranging from multi-million-dollar agencies run as corporations to groups run out of a kitchen.
The Charities Directorate, part of the Canada Revenue Agency, warns charities they must be honest with the public when asking for donations. Donors must be told what the money will be used for, and how much of it will go toward the cause.
A Star investigation found dozens of cases of charities lying to donors about how much of their donation goes to good works, and about what their charity does. Some charities claimed they were operating programs that simply did not exist. Others claimed most donor money went to good works, yet the Star found 80, 90 or more per cent of donations paid fundraisers.
Charities that misrepresent themselves can now be suspended or have their status revoked.
Marcel Lauzière, president of Imagine Canada, which represents the philanthropic sector, said the guidelines, introduced Thursday, will help good charities figure out what the federal regulator expects of them, and make it clear to the minority of bad charities what will get them in trouble. He said donors will now have a sense of what to look for in a charity before writing a cheque.