Why Charitable Giving Outside Canada is so Hard, And Who’s Trying to Fix It
This excerpt from Canadian Family Offices discusses Bill S-216, The Effective and Accountable Charities Act, which is sponsored by Senator Omidvar.
Many people worry about making enough money, but for some, the trick is giving it away. There’s no problem, of course, if you simply want to hand out cash, but if you’d like to receive a tax receipt – as most people, quite reasonably, do – then your gift is subject to the regulations of the Income Tax Act.
And while no one would disagree that charitable giving should be carefully scrutinized, a growing number of Canadians want to change the wording of the act.
Specifically, they want to revise a few phrases that make it onerously difficult for donors to support some legitimate causes, especially if the intended recipients are outside Canada. On Dec. 1, Senator Ratna Omidvar presented Bill S-216, a.k.a. the Effective and Accountable Charities Act, to the Senate. Its aim is to amend the Income Tax Act to help registered charities partner with organizations that aren’t charities, enabling Canadian donors to support a broader range of causes without sacrificing accountability or transparency.
“Providing help to institutions and organizations overseas is a complex situation,” says Omidvar. “The rules are pretty tight. They stipulate that Canadian charities may only give to other charities or conduct their ‘own activities,’” she says.
“When you are building a school in India, or giving to educational institutions, or women, or farmers, those organizations may well be charities in their own jurisdictions, but they’re not registered in Canada.”
The current rules stop “a lot of innocent people who want to do work outside Canada,” says Marvi Ricker, managing director, family philanthropy and legacy, with BMO Family Office in Toronto, “mainly people who have immigrated from outside Canada and want to support education or healthcare in their country of origin – sometimes even the village they grew up in. It’s a very personal need to help the people that they grew up with.”