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| Path: Main Street : NewsWeek : Op/Ed : Audience Opinions |
The Canada Customs and Revenue Agency (CCRA) is clarifying its guidelines around charities that operate related businesses. Right now, charities can operate businesses that relate in some direct way to their charitable purpose (e.g. hospital cafeteria or museum gift shop). Do you think that charities should be allowed to operate any kind of business, as long as the profits from the business are used to conduct charitable programs?
Our Art Gallery operates a gallery shop which contributes about 1/3 of our operating costs to the gallery itself. This allows us to hire programming staff, to pay artist fees and to fund our building costs. Financial support from local and provincial governments about equals the amount we raise from this business operation. ( I should also say that the work we carry in the gallery shop is that of local artisans) Government support, gaming revenues are all on the decline, the gallery shop serves both as a service to artisans and a business venture which brings in the resources required to exhibit contemporary art in this community.
-- Evelyn Gillespie, Project Co-ordinator, Comox Valley Art Gallery
More than ever we need to encourage charities to develop small businesses or CED initiatives to support the work they do. I work in a small service agency that services marginalized individuals. All the revenue from our small business initiatives goes back to the organization and is declared on funding proposals.
More importantly we empower agency users.
-- T. Harber, Toronto
Yes I think any business that exhibits entrepreneurial spirit should be given a chance. I do sincerely feel though that all business operating under a not for profit regimen should be governed by a set of morality standards and support the community in a direct positive way not indirect i.e.: a smoke shop that donate a part of its profits.
--Elaine Rushlow
I do not think that charitable donations should be allowed to run for-profit businesses on the side. The lines become very blurred very quickly. On the surface people believe they are donating to a non-profit charity but who will monitor that that money is not being used to execute the administration of the "profit" side of the charity. Who is going to monitor that the profits from the business are used solely for charitable purposes? In the current accounting world of "cooked books", government included, this will open up yet another pandora's box of opportunity for colossal rip-off.
-- Ingrid Roberts, North York Community Care Access Centre
I believe that charities have one of the most difficult tasks ever--acquiring sustainable funding. If there is an opportunity to run a business that promises a regular income to cover rent, phone, salaries, etc., it would be great. Let us know what the rules and regulations are to do this.
-- Sharon Hogan, Elder Abuse Prevention Services, Kingston, Ontario, Canada
I read with interest the "Guidelines for Registered Charities on Related Business", http://www.ccra-adrc.gc.ca/tax/charities/consultation_policy-e.html.
Please allow me to qualify my position prior to my comments on the"Guidelines for Registered Charities on Related Business". I am very much against organizations, for-profit or charitable, expanding their mission and strategy to encompass activities that do not reflect the organization's core competencies and skills, and thus undermines the organization's primary purpose for existing.
Furthermore, I am very much against charitable organizations that hold an advantageous position in a competitive market, solely based on the organization's tax exempt status (what is currently being termed as "revenue-generating models for the social sector").
I am very much for organizations that expand the organization's strategy to encompass new and/or acquired skill sets and are capable of building infrastructure to support the new venture. Additionally, I am very much for charitable organizations benefiting (monetarily?) from the introduction of innovated products into the market.
As an example, the Rasch Foundation will be implementing several technology-based solutions for the primary purpose of alleviating the administrative activities of the Foundation. These innovative products would be of benefit to both the charitable and non-charitable sector.
I believe that the Foundation should be able to monetarily benefit from the sale of the product (ensuring that the marketing strategy does not diminish the Foundation's ability to fulfill its disbursement quota and that the proper procedures are in place to prevent the marketing of a product or products from becoming the sole focus of the organization). From my position, the Foundation will create a product that would potentially result in residual revenue (in donated dollars?) to the Foundation, thus ensuring sustainability and increased ability to fulfill the mandate of the Foundation of funding qualified donees.
(I do understand that the issue being discussed in the "Guidelines for Registered Charities on Related Business" relate to charities that are able to engage in business activity, which Private Foundations are currently exempt; This, I believe, is a major oversight, as Private Foundation's have been called on to fund Infrastructure Development across the sector). The questions I would ask that you consider:
-- Andrew Sefton
- What financial trigger or financial triggers would automatically rescind charitable status (assuming full integration with online T3010 Returns)?
- What loopholes will exist for charities to take advantage of the system?
- What process will be established for complaints from the "for-profit" sector regarding an uncompetitive market place?
- At what point will the Charities Directorate concede that un-paid staff should be "compensated" and to "compensate" requires the basic financial concept that income should exceed expenditures?
- Will the Charities Directorate play a role in ensuring that the organization's strategy and infrastructure are capable of implementing such a venture? And if not, who will?
- Will the Charities Directorate play a role in promoting collaboration with the "for-profit" sector as a method to generate resources (labour, money, materials)? And if not, who will?
E-mail us your thoughts today at help@charityvillage.com.
From my point of view i think charities SHOULD NOT be allowed to operate any kind of business at all because a charity's purpose is to help other not themselves in business. It should not be mixed with each other because sometimes it can lead to business more that charitable program. Sometimes when greed come in, charitable program become less charitable because money is everything. To prevent charity from chaos, business should never be allowed.
-- Van Tran
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