Separation and Independence by Canadian Charities from Entities that are not Canadian Charities

While charities can work closely with other entities there must always be appropriate separation

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There are many organizations, enterprises or groups that have a multiple entity structure, meaning that they are made up of for-profit corporations, not-for-profit corporations and registered charities and even multiples of each.

There are numerous reasons why an organization may want to have different corporate entities, such as a registered charity and a not-for-profit corporation. If the organization is large enough, and plans to do many different types of activities, this model provides flexibility in carrying out their activities, as different entities each have their own advantages and disadvantages.

However, if an organization plans to have multiple corporate entities, and especially if one of them is a registered charity, it is vital that the organization ensures that there is sufficient separation between the registered charity and other entities. Charities are governed by many rules and restrictions, especially when it comes to charitable resources (that is, money and other assets that comes into a charity’s possession), and the organization needs to ensure that they are complying with these rules so that they do not lose its registered charity status.

How can you show separation? How much separation is needed? This course will assist you in understanding the importance of separation, how to determine separation vs. overlap/integration and whether further separation is required.

There is a continuum between total overlap and complete separation on the extremes. The Canada Revenue Agency (CRA) does not require that registered charities operate in isolation but if it is hard for the public and the regulator to separate out the entities then this could be a significant compliance problem.

While some may think it is a good idea to have a seamless "one organization" approach with branding, governance and operations, it will be a huge problem from a legal perspective in Canada because the benefits of being a "registered charity" do not apply to that "one organization", the resources of the registered charity can only be used for the purposes and activities of the registered charity, and there needs to be a clear separation/distinction between the registered charity and the other groups that are not registered charity (“non-qualified donees”)

It is vitally important that not only an appropriate structure is put in place, but also that the way the organization is described both verbally and in writing, both privately and publicly, is with accurate and consistent language. It is a good idea to have standard wording to describe the relationship that we can review.

Here is an overview of the course:

  • Why separation is an issue?
  • Charity Commission of England and Wales
  • Connections between charities and others
  • Long term and close relationships
  • When is separation relevant?
  • Why multiple related structures may be helpful and appropriate
  • Issues to consider when establishing an entity
  • Key features of a separate entity
  • Examples of connected organisations
  • Keep the charity separate – don’t blur the boundaries
  • Branding and Communication and Shared Names and Shared Communications
  • Separation Checklist and adequate separation
  • CRA Revocation Letters
  • Conclusion

This course will be of interest to:

  • staff and volunteers at registered charities responsible for governance, financial management and compliance issues;
  • professional advisors such as lawyers, accountants, investment advisors who advise registered charities and other entities that have relationships with registered charities; and
  • board members of Canadian registered charities.

Your Instructor

Mark Blumberg
Mark Blumberg

Mark Blumberg is a lawyer at the law firm Blumbergs Professional Corporation (Blumbergs) in Toronto and works almost exclusively advising non-profits and registered charities on their work in Canada and abroad. Mark has written numerous articles, is a frequent speaker on legal issues involving charity and not-for-profit law. He is the editor of a blog,, and created the largest portal of data on the Canadian charity sector, Mark also edits, which provides information on due diligence when selecting charities.

Mark is particularly interested in the regulation of non-profits and charities in Canada, philanthropy, transparency requirements for the voluntary sector, providing accessible information on regulatory issues, and the use of data to make more informed decisions on the charity sector.

Mark is quoted regularly in print media and frequently appears on radio and television on topics relating to philanthropy and the regulation of charities in Canada. Mark has also appeared on a number of occasions in front of the House of Commons Standing Committee on Finance on topics such as charity regulation, transparency, accountability and tax incentives for philanthropy. Mark has testified at the Special Senate Committee on the Charitable Sector, the Standing Senate Committee on National Finance and the House Committee on Access to Information, Privacy and Ethics.

Mark has also made presentations to the Charities Directorate Annual All Staff Meeting as well the Annual Divisional Staff Meeting of the Determinations Section of Charities Directorate. Mark presented to the Financial Action Task Force (FATF) when the FATF conducted an evaluation of anti-money laundering and counter-terrorism in Canada in 2015.

Mark sat for 4 years on the Charities Directorate Technical Issues Working Group, which is a bi-annual meeting between the Charities Directorate, the Department of Finance and the charity sector to discuss technical and policy issues pertaining to registered charities and the Income Tax Act (Canada). Mark is a member of the Exempt Organizations Committee of the American Bar Association. Mark spent 6 years on the Advisory Committee for the Master of Philanthropy and Nonprofit Leadership (MPNL) at Carleton University. Mark is on the Board of the Canadian Charity Law Association.

Mark has co-authored 20 Questions Directors of Not-for-Profit Organizations Should Ask About Mergers (Published by CPA Canada) and co-wrote a chapter on International Trends in Government-Nonprofit Relations: Constancy, Change, and Contradictions in Non-profits and Government: Collaboration and Conflict in Non-profits and government: collaboration and conflict (Edited by Elizabeth T Boris and C Eugene Steuerle)

Mark frequently lectures to various industry and professional groups on charity compliance issues including the Chartered Professional Accountants Canada (CPA Canada), as well as CPA Ontario, BC and Alberta, the Canadian Bar Association, Ontario Bar Association, Canadian Association of Gift Planners, Association of Fundraising Professionals, Ontario Hospital Association, Ontario Non-profit Network, and many other organizations.

Mark has a B.A. in Political Science from the University of Toronto, an LLB from the University of British Columbia and an LLM from Osgoode Hall Law School in Tax Law.

Course Curriculum

  Separation and Independence by Canadian Charities from Entities that are not Canadian Registered Charities
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Frequently Asked Questions

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