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.