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Uniform Law to Create Consistent Fundraising Regulations

(Oct. 3, 2005) The Uniform Law Conference of Canada has drafted legislation that would create one set of consistent requirements and regulations for charitable fundraising in the country.

Currently, the regulation of fundraising can differ quite dramatically, as four provinces and territories (Alberta, Manitoba, Prince Edwards Island and Saskatchewan) have different legislation and requirements for charities and fundraising businesses.

The proposal by the Uniform Law Conference is intended to supercede these different laws and create one universal series of regulations that all provinces would use. Because the conference has no standing legal authority over the provinces and territories, they are not required to approve and abide by the legislation.

However, the working group that developed the proposal included several federal and provincial government officials, such as Terry De March, the director of policy and communications for the Charities Directorate of the Canada Revenue Agency. Tad Brown, finance and development counsel for the University of Toronto and chair of the AFP Government Relations Committee, also served on the working committee. The presence of these officials is a good sign that provinces and territories will seriously consider the proposal.

The Conference was founded in 1918 to harmonize the laws of the provinces and territories of Canada, and where appropriate the federal laws as well. It also makes recommendations for changes to federal criminal legislation based on identified deficiencies, defects or gaps in the existing law or based on problems created by judicial interpretation of existing law.

What the Act Would Do

Any charity that solicits funds, as well as for-profit firms that raise funds for charities, would have to comply with the requirements of the act, although charities with annual gross contributions of less than $25,000 annually would be exempt.

According to the working committee's final report, the types of requirements involved with the act include:

  • The permissible hours for soliciting
  • The types of solicitations allowed
  • Information that a solicitor must provide during a solicitation
  • Provision of receipts for donations of $10 or more

There are two specific provisions in the act of particular importance to charitable fundraisers. The first is that any donor list compiled by a fundraising business for a charity belongs to the charity and must be destroyed when the contract between the charity and the business is terminated. Second, the practice of percentage-based compensation for charitable fundraisers is prohibited.

For fundraising businesses, the act requires that they register and be licensed in each province or territory in which they will do business (i.e., solicit funds). In addition, the act specifies certain items and terms that must be contained in any contract or agreement between a charity and a fundraising business.

Any organization registered under the Income Tax Act as a charity would be considered already registered in any province or territory that approved and implemented the uniform act. Thus, no additional filing or registration would be required for charities.

What's Ahead

The AFP Canadian Government Relations Committee will closely monitor and work with any provincial and territorial governments that intend to adopt the uniform legislation.

'If there is to be additional regulation of charities, it is important to have one uniform standard across the country,' Brown said. 'We're pleased to have been invited to work on the project and ensure that the charities' perspective was taken into account. I believe that this model legislation achieves the goal of providing the regulator with better tools to curb abuses by the handful of bad charities while not imposing undue administrative burden on the vast majority of charities doing good work.'

A copy of the act is available in the Attachments section below.

For more information about the initiative and the uniform act, contact paffairs@afpnet.org.

Attachments

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