WATCH ABOVE: Hope House is just one of the charities that receives funding from the Giving Tree Foundation. Mark McAllister reports on the foundation’s fight with the CRA to keep its charity status.
TORONTO – The looming threat of having its charitable status revoked by the Canada Revenue Agency (CRA) has a Toronto-based foundation calling it an “unfounded, callous campaign.”
The Giving Tree Foundation of Canada’s executive director says the organization received notice last fall that its status was going to be challenged.
“We responded through a lawyer and then six months passed,” said JoAnne Korten. “We heard from them again giving us 30 days to respond to that.”
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She says the reasons for the notice are still unclear and claims money that would be directed to more than 20 children’s charities is now in jeopardy.
“We’re very forthcoming about where the money goes,” Korten said.
The CRA has been criticized over the past few years for conducting audits based on political activity.
Another group based in Toronto, Dying with Dignity, lost its charity status early in 2015. The Sierra Club Canada Foundation was having its books reviewed just last week.
“The CRA has enormous powers in respect of everybody, not only charities,” the former head of the Law Society of Upper Canada Vern Krishna said. “Those powers are so strong that it isn’t a tap. It is a hammer.”
Krishna believes The Giving Tree’s donation structure is legitimate and within the bounds of law.
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By the end of 2015, the organization’s executive director said it plans to distribute $8 million.
The CRA wouldn’t comment on its dealings with The Giving Tree, citing confidentiality, but did release a general statement on monitoring registered charities.
“In instances where an audit has identified non-compliance, the CRA takes an education-first approach using a series of progressive compliance measures,” the statement said.
“In less serious to moderate cases, we use education letters, or compliance agreements. In more serious cases we may impose a monetary penalty, suspend a charity’s privileges to issue tax receipts, or in the most egregious cases, revoke its registered status.”
Hope House Youth Charities is one of the agencies that benefits from money from The Giving Tree. It runs a number of after-school programs to help young people with homework and social activities.
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Funding dedicated to helping over 2,000 at-risk youth at Hope House is now in danger of being lost due to “aggressive bullying tactics,” Korten said.
The Giving Tree Foundation now intends to file an appeal and pursue the matter in the courts.
In Canada, 86,000 registered charities issued receipts worth more than $14 billion in 2012.
Twenty-three charities had their registered status revoked by the CRA as a result of an audit in the 2013-14 fiscal year.
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