Why Does Funding Organizations Without Charitable Status Matter?

Imagine Canada
Description / Summary

If you follow nonprofit sector policy news, you’ve likely heard the buzz about Bill S-216. This bill has already passed in the Senate and been introduced in the House of Commons. It appears that the bill has enough support to pass and Imagine Canada is hopeful that it will become law this year. In this blog post, they dive deep into why this legislation and funding organizations without charitable status matters.

A brief explainer of Bill S-216:

Charities are able to spend their resources on gifts to “qualified donees” which include other charities and several other types of organizations such as registered Canadian amateur athletic association and the United Nations and its agencies.

Groups without qualified donee status are known as “non-qualified donees” but are referred to as “non-charities” in this piece for simplicity. Current rules prevent charities from providing funds to non-charities to deliver an initiative in partnership unless they enter into an agreement whereby the charity exercises “direction and control” over the activities of their partner. In essence, this results in the non-charity partner becoming an operating arm of the charity. The charity is required to exercise significant operational control.