The Canadian Charity Law Podcast

This episode is a step-by-step instructions for reinstating a revoked charity license in Canada. It highlights the importance of understanding the reasons for revocation, rectifying non-compliance issues, and engaging with the Canada Revenue Agency (CRA).

The discussion emphasizes the need for a comprehensive reinstatement application and the benefits of seeking professional legal assistance from organizations like B.I.G. Charity Law Group.

The information provided is for educational purposes and does not constitute legal advice.

This episode is jointly sponsored by B.I.G. Charity Law Group Professional Corporation, a Charity Law Firm exclusively serving charity and not-for-profit clients in Toronto, Ontario and across Canada with registration and governance, and B.I.G. Charity Accounts Group, a bookkeeping firm serving Canadian charities in Ontario with all their financial and tax filing needs.

https://www.charitylawgroup.ca/
P: 416-488-5888

https://www.charityaccountingfirm.ca/
P: 289-301-8883

Creators & Guests

DJ
Producer
Dov Goldberg, J.D.
Dov Goldberg is a manager partner at B.I.G. Charity Law Group Professional Corporation, a Charity Law Firm Providing Services Exclusively to Charities Across Canada

What is The Canadian Charity Law Podcast ?

Exploring the ins-and-outs of Canadian Charity Law in a way that can be understood by the layperson, including Charity Registration, Not-for-Profit Incorporation, Charity Governance, Charity Fundraising, Tax Receipting, and much more!

Sara:

Welcome to the deep dive. Today, we're gonna be looking at, Canadian Charity Law and, more specifically, what happens when a charity in Ontario

David:

Mhmm.

Sara:

Has its license revoked and wants to get back in good standing.

David:

Oh, yeah. That's a

Sara:

High stakes stuff.

David:

That's a big one.

Sara:

And we've got a great guide here

David:

Oh.

Sara:

From, BIG Charity Law Group PC to kind of walk us through this. This.

David:

Yeah. So I think it's important to understand that, you know Yeah. Charitable status in Canada, it's not just a Right. A feel good title. It actually comes with serious benefits

Sara:

Mhmm.

David:

Tax breaks, public trust

Sara:

Okay.

David:

Ability to receive donations. Yeah. So losing that status is a major set back for any organization.

Sara:

With great power comes great responsibility. Right?

David:

That's right. Yeah.

Sara:

But sometimes it feels like even the most well intentioned charities can trip up on these regulations.

David:

Absolutely.

Sara:

What are some of the most common reasons that a charity might have its license revoked?

David:

Well, one thing that we see pretty often is actually missing deadlines.

Sara:

Oh, really?

David:

Yeah. So we're talking about those t 3010 forms Oh,

Sara:

you're right.

David:

That charities need to file.

Sara:

Okay.

David:

And these forms are essentially a yearly checkup

Sara:

Oh, god.

David:

Proving to the CRA and to you as a potential donor that everything is running smoothly.

Sara:

So it's not enough to do good work. You gotta document it meticulously.

David:

And I should say you gotta have it all in writing.

Sara:

Gotcha.

David:

Another big one is misuse of funds.

Sara:

Go ahead.

David:

Now this doesn't necessarily mean that someone is pocketing donations.

Sara:

Right.

David:

It could be something as simple as using funds Yeah. For a staff retreat that's not really aligned with Right. Organization's purpose.

Sara:

Oh, so even small discrepancies can trigger an audit.

David:

Absolutely. Wow. Yeah. Even things that seem unrelated to your main mission Okay. Could be a problem.

Sara:

Gotcha. So staying laser focused on

David:

Yes.

Sara:

That organization's core mission.

David:

That's key.

Sara:

And making sure every dollar spent reflects that.

David:

For sure. And the guide explicitly states that Yeah. Deviating from that stated purpose is a huge red flag

Sara:

That makes sense.

David:

For the CRA. Yeah.

Sara:

Nobody wants to feel like their generosity is being misdirected.

David:

Exactly.

Sara:

Now let's say a charity finds itself on the wrong side of the CRA.

David:

Okay.

Sara:

And they've had their license revoked.

David:

Mhmm.

Sara:

What happens next? Can they still operate?

David:

So this is where things get tricky. Okay. Losing your charitable status, it's a major blow.

Sara:

Yeah.

David:

Not just from a financial perspective, but also from a public perception

Sara:

Okay.

David:

Perspective. Yeah. It can be difficult to continue operating effectively. The guide does lay out Okay. A step by step approach to reinstatement.

Sara:

Okay.

David:

And that's something we'll delve into.

Sara:

Alright. So there's a glimmer of hope.

David:

There is.

Sara:

But I imagine it's not an easy process.

David:

It's not a quick fix. No.

Sara:

Okay. So what's the first step?

David:

Alright. So the first step and maybe the most important is Yeah. An internal review.

Sara:

An internal review. Okay. I'm really curious about this. It sounds pretty intense.

David:

It can be.

Sara:

What are some of the blind spots organizations might encounter during this self assessment?

David:

I think the big thing here is honesty.

Sara:

Okay.

David:

A willingness to confront Right. The uncomfortable truths

Sara:

Yeah.

David:

About what went wrong. Mhmm. Asking the tough questions.

Sara:

Okay.

David:

Did we have proper financial controls in place?

Sara:

Right.

David:

Was there a breakdown in communication? Right. Identifying the root cause is essential Gotcha. To fixing the problem.

Sara:

So no sweeping things under the rug?

David:

No. Absolutely not. This is where transparency is key.

Sara:

Okay.

David:

You have to acknowledge the mistakes Yeah. And take responsibility for them. Them.

Sara:

And speaking of taking action, what's the next step in this path to redemption?

David:

So step 2 is all about addressing those noncompliance issues head on.

Sara:

Okay.

David:

It's not enough to just acknowledge the mistakes. Right. You need to demonstrate a commitment Okay.

Sara:

To fixing them. So not just saying the right things, but

David:

taking a

Sara:

commitment Okay. To fixing them. So not just saying the right things, but taking concrete steps to change.

David:

Exactly. This might involve updating financial records

Sara:

Okay.

David:

Submitting missing reports or even Yeah. Implementing stricter governance Mhmm. And accountability measures.

Sara:

So essentially rebuilding that trust.

David:

Yes. Brick by brick.

Sara:

Brick by brick.

David:

Yeah.

Sara:

But I imagine this is where things can get really complicated

David:

They can.

Sara:

Especially for organizations that might not have Right. In house legal expertise.

David:

You're absolutely right. Yeah. And that's where our friends at BIG Charity Law Group come in.

Sara:

Okay.

David:

They really emphasize the importance of

Sara:

Yeah.

David:

Seeking legal counsel.

Sara:

At this stage.

David:

At this stage. Yeah.

Sara:

Makes sense. I mean, trying to navigate all these regulations Yeah. Without expert help could be like trying to perform surgery on yourself.

David:

It's a great analogy. Right. Yeah. You don't wanna be doing that.

Sara:

Okay. So BIG Law Group can help these organizations understand the nuances of the law

David:

That's right.

Sara:

And make sure that they're meeting all the requirements.

David:

Exactly. They can really advocate

Sara:

Okay.

David:

For the organization.

Sara:

So it's not just about good intentions.

David:

Right.

Sara:

It's also about dotting your i's and crossing your t's.

David:

Yes. Attention to detail is crucial.

Sara:

Alright. So we've laid the groundwork with the internal review

David:

Okay.

Sara:

And we've addressed the noncompliance issues. Mhmm. What's next on the road to reinstatement?

David:

Alright. So the next step is engaging with the CRA directly.

Sara:

Oh, that sounds intimidating.

David:

It can be for many organizations. I

Sara:

mean, dealing with any government agency can be a little scary.

David:

Yeah. Especially when you're trying to get back in their good greases.

Sara:

Exactly.

David:

But this step is all about open communication.

Sara:

Okay.

David:

It's about reaching out to the charities directorate Mhmm. Expressing the organization's commitment to reinstatement.

Sara:

So building that bridge.

David:

Building that bridge. Exactly.

Sara:

Okay.

David:

And seeking guidance on what they need to see.

Sara:

Gotcha. So it's about showing them that you're serious about making things right.

David:

You got and this is another area where legal counsel can be helpful.

Sara:

Okay. How so?

David:

Well, they can act as a liaison between the organization and the CRA

Sara:

Right.

David:

Smoothing the communication process

Sara:

Okay.

David:

Making sure everything is handled professionally

Sara:

Mhmm.

David:

And strategically.

Sara:

So having them in your corner can make all the difference in navigating that interaction.

David:

Absolutely.

Sara:

Okay. So once that initial contact is made, what comes next?

David:

So now comes the heavy lifting. Uh-oh. The reinstatement application itself.

Sara:

Okay.

David:

This is not a DIY project.

Sara:

I was afraid you were gonna say that.

David:

The guide strongly recommends seeking legal counsel

Sara:

At this stage?

David:

At this stage. Yeah.

Sara:

Make sure everything is prepared and submitted correctly.

David:

Exactly.

Sara:

Okay. So what exactly needs to be included in this application?

David:

So the application is very detailed

Sara:

Okay.

David:

Covering everything from the organization's history and mission

Sara:

Right.

David:

To the specific steps they've taken Yeah. To address the issues that led to the revocation.

Sara:

Okay.

David:

It's crucial to be thorough accurate Mhmm. And to provide solid documentation to back up

Sara:

Right.

David:

Every claim.

Sara:

So you can't just say you've changed. You need to prove it.

David:

Exactly. You need the receipts, so to speak.

Sara:

What kind of documents are we talking about here?

David:

So it could include updated financial statements, revised bylaws, meeting minutes Yeah. Letters of support from stakeholders

Sara:

Okay.

David:

Really anything that helps build a compelling case.

Sara:

That shows a genuine commitment to compliance.

David:

That's it.

Sara:

Okay. So it sounds like having legal counsel can really streamline this process.

David:

It can definitely help ensure accuracy and increase the chances of success.

Sara:

Okay.

David:

They can help you navigate all those complexities

Sara:

Okay.

David:

And advocate for the organization every step of the way.

Sara:

So it's not just about filling out forms. It's about presenting a persuasive case Exactly. To the CRA.

David:

That convinces them to give the organization a second chance.

Sara:

Right. So the application is submitted. Right. Then what happens? Is it just a waiting game?

David:

Well, there is a waiting period while the CRA reviews the application.

Sara:

Right.

David:

But it's not a passive process.

Sara:

Okay.

David:

The guide highlights the importance of

Sara:

Yeah.

David:

Ongoing communication with the CRA during this time.

Sara:

So it's not a submit it and forget it situation?

David:

Not at all. Yeah. The CRA might have questions.

Sara:

Okay.

David:

They might request additional documentation. Yeah. They might even wanna conduct site visits

Sara:

Oh, wow.

David:

Or interviews.

Sara:

So it's about being proactive, responsive, and maintaining that transparency.

David:

Exactly. Showing the CRA that you're serious about compliance.

Sara:

And I imagine this is another area where having legal counsel can be helpful.

David:

Absolutely. They can manage those expectations, facilitate communication

Sara:

Okay.

David:

And ensure that the organization is responding effectively to the CRA's request.

Sara:

So even with the best legal representation, this all takes time.

David:

It does. The reinstatement process isn't quick. Yeah. The guide cautions that it could take several months

Sara:

Wow.

David:

Even a year or more in some cases.

Sara:

So patience is key.

David:

It is, but the goal is worth it.

Sara:

Right. To get back to doing the good work they're passionate about.

David:

Exactly. And when that reinstatement letter finally arrives, it's a huge moment.

Sara:

It must be.

David:

It means the organization can operate with the full weight of that charitable status Okay. Behind it. Yeah. They can rebuild trust with the public and get back to making a positive impact.

Sara:

It's a long and winding road, but it sounds like reinstatement is possible

David:

It is.

Sara:

For organizations that are willing to put in the work.

David:

Absolutely. The key takeaway here is that while the process is challenging, it is possible

Sara:

Okay.

David:

To regain charitable status.

Sara:

Yeah.

David:

But it requires a deep understanding of the regulations, a commitment to compliance, and offering the guidance of those experienced Yeah. Legal professionals.

Sara:

Well said. And I'm so grateful to the experts at BIG Charity Law Group for providing this guide.

David:

Yeah. They're a great resource.

Sara:

Absolutely.

David:

For sure.

Sara:

It's given us a lot to think about.

David:

It has.

Sara:

But before we wrap things up, I wanna touch on something you mentioned earlier.

David:

Okay.

Sara:

Proactive compliance.

David:

Yes.

Sara:

What steps can charities take to avoid finding themselves in this situation?

David:

That's a great question and something we'll explore further in our next segment.

Sara:

Sounds good. We'll be right back to continue our deep dive into revoked charity licenses in Ontario.

David:

And we're back diving deeper into this whole charity license reinstatement process in Ontario. Yeah. Before we get into proactive compliance

Sara:

Mhmm.

David:

I did wanna touch on something we mentioned earlier. Yeah. The importance of getting legal help.

Sara:

Right. A lot of people might be wondering Yeah. Why it's so important to actually bring in Mhmm. A lawyer.

David:

Right.

Sara:

When you're facing something as serious as license revocation Yeah. Can't organizations just handle this themselves?

David:

Well, it's a good thought. But,

Sara:

Yeah.

David:

These regulations are really nuanced.

Sara:

K.

David:

And it can be pretty tough to navigate Mhmm. Without expert help.

Sara:

Right.

David:

B. I. G. Charity Law Group, PC.

Sara:

Okay.

David:

They emphasize this a lot. Yeah. They say they've seen firsthand how organizations can accidentally

Sara:

Right.

David:

Make things worse

Sara:

Yeah.

David:

By trying to DIY.

Sara:

Right. Because these regulations are designed to be super accountable and transparent.

David:

Yeah.

Sara:

And that requires a certain level of expertise that a lot of smaller organizations Mhmm. Might not have.

David:

Yeah. A lot of these places are volunteer run. They don't have a legal department.

Sara:

Exactly. And the CRA, they don't just give out second chances. Yo. You really gotta

David:

They need to see that you're serious.

Sara:

Yeah.

David:

That you understand what went wrong. Prove it to them. And that often means

Sara:

Yeah.

David:

Having that legal expertise.

Sara:

It's not just about good intentions then.

David:

No. It's about knowing the law Yeah. Inside and out.

Sara:

Speaking their language.

David:

Yeah. Presenting your case

Sara:

Right.

David:

In a way that the CRA understands.

Sara:

Okay. So let's say an organization has taken all the right steps. Alright. Internal review.

David:

Mhmm.

Sara:

They fixed all the compliance issues.

David:

Okay.

Sara:

They've talked to the CRA Yeah. Submitted that super detailed application with the help of their lawyer.

David:

Oh, which

Sara:

Now what?

David:

Well, now there's a bit of a waiting game Okay. While the CRA reviews everything.

Sara:

Right.

David:

But it's not exactly a passive process.

Sara:

What do you mean?

David:

The guide really stresses

Sara:

Okay.

David:

Staying in touch with the CRA

Sara:

Okay.

David:

Throughout this whole time.

Sara:

So you don't just, like, submit it and forget about it?

David:

No. No. You gotta be proactive.

Sara:

What do they what do they do during that time?

David:

Well, the CRA might have questions.

Sara:

Okay.

David:

They might need some extra documentation.

Sara:

Mhmm.

David:

They might even wanna do a site visit

Sara:

Oh, wow.

David:

Or some interviews.

Sara:

But you gotta be ready for anything. Be prepared. Okay.

David:

You know? Stay transparent. Yeah. Keep those lines of communication open.

Sara:

And this is where having a lawyer is super helpful.

David:

Absolutely. Having that experience professionally Yeah. To kind of manage expectations

Sara:

Yeah.

David:

And facilitate those Right. Conversations with the CRA Mhmm. Can make all the difference.

Sara:

So it takes the stress off a bit.

David:

For sure.

Sara:

Even with all that help, though, it sounds like this still takes

David:

It does.

Sara:

Quite a while.

David:

The reinstatement process

Sara:

Yeah.

David:

Is not a quick fix.

Sara:

Right.

David:

It can take Yeah. Months, sometimes even a year

Sara:

Wow.

David:

Or more.

Sara:

So in the meantime, what happens to the organization? Can they keep doing their work?

David:

So that's a really good question. Yeah. And it shows how much of an impact

Sara:

Mhmm.

David:

Losing your license can have.

Sara:

Right.

David:

Makes it so hard

Sara:

Yeah. To operate.

David:

Yeah. Fundraising becomes a huge challenge.

Sara:

Right. Because you can't issue those tax receipts.

David:

Exactly. And public trust Yeah. Can really take a hit.

Sara:

People are gonna be hesitant to donate.

David:

Yeah. So it's a tough situation.

Sara:

So while they're waiting for that decision from the CRA, what can they do to kinda stay connected to their mission?

David:

Well, they need to talk to their stakeholders.

Sara:

Okay.

David:

Donors, volunteers.

Sara:

Yeah.

David:

The people they help anyone who's involved. Right. They need to explain what's going on Right. Honestly.

Sara:

Okay.

David:

You know, be upfront about the challenges

Sara:

Yeah.

David:

But also show that they're committed Right. To fixing things.

Sara:

So kind of acknowledging the setback, but also emphasizing that they're still dedicated to

David:

Yes.

Sara:

Their goals.

David:

Exactly. And, hopefully Mhmm. With time and hard work Yeah. They'll get that reinstatement letter.

Sara:

And when they do, what does that mean?

David:

It's a huge win.

Sara:

Okay.

David:

They can operate again

Sara:

Yeah.

David:

With all the benefits of being a registered charity

Sara:

Right.

David:

Fundraising's back on the table Right. Tax receipts.

Sara:

Mhmm.

David:

They can really just focus on their mission.

Sara:

It's a fresh start.

David:

Yeah. It's a chance to rebuild that trust

Sara:

Right.

David:

And get back to making a difference.

Sara:

It's a long road, but it shows that it's possible to recover.

David:

Yeah. Anyone out there

Sara:

Yeah.

David:

Going through this

Sara:

Yeah.

David:

There is hope.

Sara:

There is a light at the end of the tunnel.

David:

There is. But the best case scenario is obviously to avoid this whole mess

Sara:

Right.

David:

Altogether.

Sara:

Exactly.

David:

Which brings us back to Yeah. Proactive compliance.

Sara:

Proactive compliance.

David:

How can charities stay on the CRA's good side?

Sara:

And that's what we'll be talking about next.

David:

Let's get into it.

Sara:

Alright. And we're back for the final part of our deep dive today.

David:

Okay.

Sara:

Looking at how charities in Ontario can avoid having their licenses revoked in the first place.

David:

Yeah. So we've covered a lot today.

Sara:

We have

David:

All those common reasons for revocation

Sara:

Mhmm.

David:

The steps to reinstatement.

Sara:

Right. It's a lot.

David:

But like they say

Sara:

Yeah.

David:

An ounce of prevention is worth a pound of cure. Absolutely. So let's talk about proactive compliance.

Sara:

Okay. So what can charities do to stay on the CRA's good side?

David:

Well, the guide really emphasizes Yeah. Good governance practices Okay. Right from the beginning. Like building a house, you gotta start with a solid foundation.

Sara:

Exactly. Okay. So what building a house, you gotta start with a solid foundation. Exactly. Okay.

Sara:

So what are the building blocks of this foundation when it comes to charities?

David:

The first one's pretty straightforward.

Sara:

Okay.

David:

You gotta know the rules.

Sara:

Understand the regulations.

David:

Yeah. Know the guidelines, the policies Mhmm. All the reporting requirements.

Sara:

It sounds obvious, but you'd be surprised how many people trip up on that.

David:

More than you'd think.

Sara:

Right.

David:

Yeah. Just not being familiar with the rules.

Sara:

Knowledge is power, especially in this world.

David:

For sure. But it's not enough

Sara:

Yeah.

David:

To just read the rule book. You gotta put those rules into practice.

Sara:

Okay. So what does that look like?

David:

So one of the key things is having really strong financial controls.

Sara:

Okay.

David:

Clear procedures for handling donations, tracking expenses

Sara:

Mhmm.

David:

You know, making sure all the financial stuff is transparent.

Sara:

It's like you gotta treat the CRA like your bank.

David:

Yeah. Right?

Sara:

Right? You're managing money responsibly. Exactly. They wanna see those checks and balances. Finance person on staff Yeah.

Sara:

Can be really helpful.

David:

Absolutely. Or even a consultant. Yeah. Someone who can set up those systems Yeah. And make sure everything's documented properly.

Sara:

And not only does that reduce the risk, but

David:

Yeah.

Sara:

It makes things more efficient.

David:

Exactly.

Sara:

So it's a win win.

David:

But good governance, it goes beyond Right. Just the financial stuff.

Sara:

So what else is involved?

David:

It's about making sure everyone's on the same page Okay. When it comes to compliance. Yeah. Board members, staff, everyone.

Sara:

So providing training

David:

Yeah.

Sara:

Making sure everyone understands the importance of following the rules.

David:

Exactly. And fostering a culture where people feel comfortable speaking up.

Sara:

Okay. So, like, a culture of Yeah. Compliance?

David:

Compliance exactly where everyone feels responsible for doing things the right way.

Sara:

And having access to good legal advice from the start

David:

Oh, that's huge.

Sara:

Can really help with this.

David:

Absolutely. Think of it like preventative medicine

Sara:

Okay.

David:

For your organization.

Sara:

So you've got an expert in your corner

David:

Yeah.

Sara:

Who can anticipate those problems and help you stay on track.

David:

Yeah. Someone who can guide you through

Sara:

Mhmm.

David:

All those tricky areas.

Sara:

And, ultimately, that's what allows charities to do their best work.

David:

Absolutely.

Sara:

You know, making sure every dollar, every hour goes towards fulfilling that mission.

David:

That's what it's all about. It's it. Making a difference.

Sara:

Well, I think this has been a really great conversation.

David:

Yeah. It's been great to

Sara:

Yeah.

David:

Dive deep with you today.

Sara:

And a big thank you to BIG Charity Law Group.

David:

They're a great resource.

Sara:

They are.

David:

For sure.

Sara:

Their guide was really insightful.

David:

Absolutely.

Sara:

And for our listeners, thanks for joining us on this deep dive into the world of charity law in Ontario.

David:

Yeah. We hope you learned a lot.

Sara:

We hope you found it helpful.

David:

Definitely.

Sara:

Remember, knowledge is power.

David:

It is.

Sara:

And the more we understand about charities, the better we can support their work.

David:

Couldn't have said it better myself.

Sara:

So until next time, keep learning, keep exploring, and diving deep.