Budget 2015 and Canadian nonprofits (HIGHLIGHTS)

The federal budget was released today, and there are plenty of potential impacts on and opportunities for the nonprofit sector. One item not included is the charitable donation stretch tax credit championed by Imagine Canada, but here are the most relevant tidbits I found during a cursory review.

General implications

Ability for charities to invest in limited partnerships (LPs): A gamechanger for social finance and a policy priority championed by Philanthropic Foundations Canada and Community Foundations Canada. This is one of the largest roadblocks to opening more impact investment / social finance in that the most natural legal structure for many social finance vehicles that the charitable sector (especially foundations) would like to invest are limited partnerships.

Exempting donations of private shares and real estate from corporate gains tax: There are currently exceptions for charitable donations of publicly traded shares (aka securities), but opening this up to other investment donations will do good for areas of Canada where there is a combination of high net worth individuals and real estate investment / private companies (ie Vancouver).

Creating of a government “Social Finance Accelerator”: ESDC is the federal government lead on social finance. However, a risk averse government and a untested social/market tool do not equate to quick innovation. I hope ESDC works with external partners to make this happen (“workshops, advisory services, mentorship, networking opportunities and investor introductions”) in a timely manner. I know the people in ESDC working on this file and they are smart wonderful hardworking people, it’s the highers up that slow things down. In a fast moving field like Social Finance, doing things “in house” can lead to irrelevance quickly.

$56.4 million over four years to Mitacs, an independent organization that provides funding to businesses (eligibility was opened to nonprofits earlier this year) to solve business challenges through research collaborations with universities via paid graduate-level internships.

Unclear changes to the governance of not-for-profit organizations and co-operatives: this budget item started with a focus on increasing women and diversity on corporate board, but finishes with “Amendments to related statutes governing cooperatives and not-for-profit corporations will also be introduced to ensure continued alignment among federal laws.”

Support for specific nonprofit organizations

Futurpreneur Canada: “Economic Action Plan 2015 proposes to provide $14 million over two years, starting in 2015–16, to Futurpreneur Canada to support young entrepreneurs.”

Organizations that provide loans to newcomes for foreign credential recognition: “Economic Action Plan 2015 proposes to reallocate up to $35 million over five years, starting in 2015–16, to make the Foreign Credential Recognition Loans pilot project permanent to support internationally trained workers in their pursuit of foreign credential recognition.” [I got to see some of this while on contract recently in the social innovation unit within Citizenship and Immigration Canada. Pre- and post-loan incomes for newcomer clients with one organization went from ~$14,000 to over $100,000. Most loans are <$10,000.]


Organizations that support women entrepreneurs: “Economic Action Plan 2015 announces support for the Action Plan for Women Entrepreneurs in order to help women entrepreneurs succeed, through mentorship and increased access to credit and international markets.”

Working with post-secondary to train the nonprofit labour force: “Economic Action Plan 2015 proposes to provide a one-time investment of $65 million over four years, starting in 2016–17, to business and industry associations to allow them to work with willing post-secondary institutions to better align curricula with the needs of employers.”

Organizations that support employment of Aboriginal peoples: “Economic Action Plan 2015 proposes to provide $248.5 million over five years beginning in 2015–16 to support Aboriginal labour market programming.”

Organizations that want refurbished computer equipment and work with vulnerable populations: “Economic Action Plan 2015 proposes to provide $2 million over two years, starting in 2016–17, to expand the Computers for Schools program, extending access to refurbished computer equipment to non-profit organizations such as those that support low-income Canadians, seniors and new Canadians.”

Improvements for community infrastructure: “Economic Action Plan 2015 proposes to create a new dedicated infrastructure fund to support the renovation, expansion and improvement of existing community infrastructure in all regions of the country as part of the Canada 150 celebrations.”

Organisations who do work in financial literacy: “In 2015–16, the Government will release a National Strategy to strengthen the financial literacy of Canadians.”

Organizations with mortgages for social housing: “Economic Action Plan 2015 proposes to provide $150 million over four years, starting in 2016–17, to support social housing in Canada by allowing social housing providers to prepay their long-term, non-renewable mortgages without penalty.”

Organizations who do work related to Austism Spectrum Disorder: “Economic Action Plan 2015 proposes to provide $2.0 million in 2015–16 to support the development of a Canadian Autism Partnership.”

Other items of interest

Updating labour code to protect interns in federally-regulated industries (not the nonprofit sector, but still a great step). See more about regulations re: internships via Canadian Intern Association. This is a good reminder that just because volunteering is OK, unpaid internships are often not, in the nonprofit sector.

There are many items relevant to clients of nonprofit organizations not listed here.

Any other items I missed?

A restrained voice for social change

Image Credit: ephotography

I believe social change happens on three main levels.

  1. It includes actions that fill immediate needs. Food banks. Shelters. Child care. Chaining yourself to an old growth tree.
  2. It includes projects that provide ongoing support or awareness raising. Groups for single mothers and survivors of abuse. Employment programs. Bike to work weeks. Farmers markets.
  3. It also involves changing legislation, infrastructure, and societal norms that are barriers to some balanced utopia where people, animals, and environments are free from persecution and exploitation.

The first two are where nonprofits and charities thrive. But for all the money, effort and talent that is poured into these actions, I feel that little progress beyond the anectodal has been made.

I believe that real progress, real change, happens because of the third. The Canada Revenue Agency (CRA) agrees:

Through their dedicated delivery of essential programs, many charities have acquired a wealth of knowledge about how government policies affect people’s lives. Charities are well placed to study, assess, and comment on those government policies. Canadians benefit from the efforts of charities and the practical, innovative ways they use to resolve complex issues related to delivering social services. Beyond service delivery, their expertise is also a vital source of information for governments to help guide policy decisions. It is therefore essential that charities continue to offer their direct knowledge of social issues to public policy debates.

But this is where the voice of charities and nonprofits are restrained.

Lobbying – an action used by industries and companies to advocate for self-serving policies, programs, tax incentives, etc  – is fairly unrestricted by government. Save registration requirement for lobbyists which acts to increase the transparency of lobbying efforts, industry organizations and individual companies can lobby to their hearts desire if they can get the ear of a minister, elected official, or other senior public servants.

However, this does not hold true for those advocating for charitable efforts (defined in Canada as the relief of poverty, the advancement of education, the advancement of religion, or other purposes that benefit the community, a definition that comes from a 1891 British legal ruling with roots even 300 years earlier). Registered charities in Canada are only able to spend 10% of their resources on political activities, which include “explicitly communicat[ing] to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained…, opposed, or changed.” Charities with less than a $200,000 operating budget can dedicate more resources, on a sliding scale to 20%. Note that the percentage isn’t just $, it’s also people (including volunteers), space and other physical resources.

The CRA states that one main reason applications for charitable registration may be rejected is that “the organization seems to be devoting too many resources to political activities.”

It should be noted, however, that nonprofit organizations (those that are not registered as a charity, but as a society – e.g. under the BC Society Act) are able to dedicate as many resources as desired to political activities. However, these organizations do not receive the same tax benefits as charities (e.g. the ability to provide tax receipts for donations) and are not eligible to apply for a majority of foundation and government grants (which often require charitable registration numbers).

Overall, while lip service is given to the value nonprofits and charities can provide in policy change, the voice is restrained. We wouldn’t want the sounds of progressive social change to get too loud.

IMPACS, an organization that lasted briefly over the turn of the millennium, was working hard to analyze the law, dialogue with charities and nonprofits across Canada, and suggest alternatives to the current regulatory system. At a recent event in Vancouver, I met with a variety of individuals interested in this topic, and I decided to dig a bit further to get as much IMPACS documentation as possible. Thanks to Justin Ho over at United Community Services Co-op in Vancouver, here are the results for you to review if you are interested. Of particular practical use is the Election Took Kit. Si vous voudriez les documents en francais, envoyer-moi.

Impacts of the regulations on ethnocultural organizations:

Letters to government ministers and committees:

I’m trying to find out what current action (if any) is being taken on this issue. I sent a message to Michelle Gauthier, Vice-President, Public Policy & Outreach at Imagine Canada on December 5 to find out it it’s on their radar, but I haven’t heard back. If you are a charity wanting clarity, contact me or visit the CRA website. If you are interested in digger further with me, let me know.

Resources for drivers facing Canada’s nonprofit sector

This list of resources and information sources was provided in a recent email from Imagine Canada; the list is based on key drivers facing Canadian nonprofit organizations and the priority program areas of Imagine Canada, and was too good to just sit in my inbox. Enjoy and share.


Imagine Canada – www.imaginecanada.ca

Our website includes information on a range of initiatives and research to help charities and nonprofits across Canada fulfill their missions.

You may also be interested in reading our 2009 Annual Report .

Public Policy and Engagement

1. National Engagement Strategy: http://www.imaginecanada.ca/node/239

2. Membership – http://www.imaginecanada.ca/node/38

As Marcel mentioned Canadian registered charities and nonprofit organizations are encouraged to become members of Imagine Canada to participate in this exciting movement, take advantage of engagement opportunities, and come together with colleagues from across the sector to shape our future and to define our role.  As a member you will also get access to many benefits and savings.

Check the links above to find out more about becoming a member or contact: [email protected]

3. Pre-budget activities

Imagine Canada is a national voice for public policy issues affecting the sector.  We focus predominantly on federal issues and those that are pan-Canadian in scope.  Our 2010 federal pre-budget submission, along with information on other major public policy files, can be found in the Public Policy section of our website.

Knowledge Development and Mobilization

1. Canadian Directory to Foundations & Corporations – http://www.imaginecanada.ca/en/node/22

Whether you are new to fundraising or a seasoned professional, the Canadian Directory to Foundations & Corporations can help you connect with funders who are interested in your cause. The fully bilingual, searchable Directory lists the grant giving foundations in Canada; American foundations that grant in Canada; and over 200 corporate giving programs!  No other fundraising directory is this accurate, relevant, and affordable.

2. Sector Casts – http://www.imaginecanada.ca/node/43

SectorCasts are web/audio conferences designed to give participants an opportunity to share and discuss critical issues affecting the nonprofit and charitable sector. This fall, we have an exciting line-up that you can access directly from your work space.

3. Nonprofit Library – http://nonprofitscan.imaginecanada.ca

This site holds the largest collection of Canadian nonprofit literature in the world with 80 per cent of our collection available free online.

4. Sector Monitor – http://www.imaginecanada.ca/sector_monitor

The goal of the Sector Monitor program is to provide relevant and timely information on the issues facing charities and nonprofits to the sector itself and to various sector stakeholders, including Imagine Canada members, policymakers, business leaders, the media and the Canadian public.

5. Nonprofit Newswire – http://nonprofitscan.imaginecanada.ca

This is a daily source of news and press releases from online media outlets, news services, and nonprofit organizations. Subscribe through the Nonprofit Library Commons.

Governance and Accountability

6. Ethical Code http://www.imaginecanada.ca/ethicalcode

The Code lays out standards for charitable organizations to manage and report their financial affairs responsibly.  This is a tool that can help you meet donor expectations and distinguish you from others in the field. The Ethical Code also enhances awareness among Boards and staff about fundraising and financial accountability and provides you with a baseline against which you can evaluate your policies and practices.

7. Standards – http://www.imaginecanada.ca/standards_initiative

A national standards initiative is underway that will define sector standards for human resources, volunteerism, governance and accountability.

8. Insurance and Library Resource Centre www.nonprofitrisk.imaginecanada.ca

A number of you had a chance to meet our colleague, David Hartley, during the Risk Management workshop. Great information can be found on the website regarding workshops, webinars, tips, newsletters on insurance and liability issues affecting the sector.

9. Charity Tax Tools – http://charitytax.imaginecanada.ca

The site contains information on the basic legal requirements for all Canadian charities that are registered with CRA and entitled to issue tax receipts for charitable donations. It provides examples and links to additional information for those who wish to know more.

Our National Partners

10. The HR Council for the Nonprofit Sector – www.hrcouncil.ca

The HR Council’s website has terrific information, tools and research on HR issues affecting the sector.  Check out the HR check-up.

11. Canada Helps – http://www.canadahelps.org

This website offers great tips and resources for using social networking in your organization.

12. Volunteer Canada – www.volunteer.ca

This is a great source of information on volunteering in Canada which includes tools and resources for volunteers, research, a directory of organizations, and a calendar of events.

FREE webinars: Canadian charities and the tax man

Imagine Canada is offering a FREE Charity Tax Tuesdays Webinar Series. Two have already happened, but you can view them online. Two others are coming up before the end of March.

For more details, visit http://charitytax.imaginecanada.ca/

Charity Tax Tools is a set of resources built around a free comprehensive information website with easy-to-understand content developed by Imagine Canada that will provide your charity with timely information and tools to ensure you have the resources to meet Canada Revenue Agency (CRA) requirements.