Social Policy in Ontario

Which charities get the most foreign cash? Not those on Tory hit list

Posted on May 10, 2012 in Inclusion Debates

Source: Globe & Mail — Authors: Steve Rennie

TheGlobeandMail.com – news/politics
Published Thursday, May. 10, 2012.    Steve Rennie Ottawa— The Canadian Press

The Conservatives have taken some Canadian environmental charities to task for accepting money from wealthy foreign donors to finance their campaigns against oil and gas projects.

But tax returns filed to the Canada Revenue Agency show most of the foreign money that fills the coffers of domestic charities does not go to the environmental groups now in Tory crosshairs.

An analysis by The Canadian Press of charities’ annual tax returns found only one of the top 10 foreign-funded charities could be considered a conservation group.

That group is Ducks Unlimited Canada. Tax returns show it has reported receiving more than $33-million over the years from foreign sources, making it the fifth-largest recipient of money from outside the country.

Ducks Unlimited Canada says it receives foreign funding from its sister organization in the United States, U.S. federal and state governments, corporations, private foundations and individual contributors.

CARE Canada reported the largest amount of foreign funding. It has accepted nearly $99-million over the years from foreign donors. Most of it came from United Nations agencies, foreign governments and the charity’s international members.

Second was World Vision Canada, which has reported $89-million in foreign income. It says the vast majority of that money comes from gift-in-kind donations from UN organizations and international corporations with branches in Canada.

“For example, these would be things like pharmaceuticals, clothing, school supplies and books and medical supplies,” spokeswoman Tiffany Baggetta said in an email.

“Then we have a very small portion that is from individual citizens who just happen to live outside of Canada. For example, sometimes we have people who sponsor a child through World Vision Canada, then they move to another country but want to continue sponsoring that child through World Vision Canada.”

Third was Hamilton’s McMaster University, which, like many post-secondary institutions, has charitable status. McMaster has reported $43-million in foreign income.

University spokesman Gord Arbeau says last year foreign students paid McMaster $25-million in tuition fees, while the school also received $13-million for research funding and $4-million from sales of medical isotopes from its nuclear reactor.

All that money counts as foreign funding for CRA’s purposes.

The charity that reported the fourth-most foreign funding was the Canadian UNICEF Committee, with $37-million. But a UNICEF Canada spokeswoman says the organization doesn’t actually receive much foreign funding.

“While it appears we received a significant amount of cash from foreign donors – we don’t,” Melanie Sharpe said in an email.

“That figure is almost entirely the value of donated health supplies that we send to our child survival programs in developing countries. Less than 0.5 per cent represents cash donations Canadians have made to one of UNICEF’s global fundraising campaigns.

“… According to accounting regulations all cash or in-kind donations have to be registered as revenue whether from a foreign or domestic source.”

The CRA database shows only 1,998 of the 85,000 or so registered charities now active in Canada have reported any foreign income. Most are aid organizations, religious groups or schools. All of their foreign funding over the years amounts to a combined total of $811,467,808.

“It’s certainly not as if this was something new,” said Marcel Lauziere of Imagine Canada, an advocacy group for Canadian charities. “And even if it were new, and it certainly is not, hard to understand why that would be a bad thing. I mean, unless Canada wants to isolate itself from the rest of the world, it would make no sense.

“You know, if 80 per cent of funding of charities came from foreign sources, you’d say, ‘Okay, that’s a bit bizarre. What does that mean?’ That’s not the case at all. The lion’s share, by far, of the funding that charities get are provided by Canadians.”

Canadian charities do not have to disclose on their tax returns which foreign groups gave them money. But the recent federal budget promised to impose new penalties on charities that fail to provide full disclosure of funding and activities.

“There have also been calls for greater public transparency related to the political activities of charities, including the extent to which they may be funded by foreign sources,” the budget document says.

Sanctions for charities that don’t play by the rules could include fines or a suspension of a charity’s ability to issue tax receipts.

Prime Minister Stephen Harper’s Conservatives have been critical of charities that receive foreign funding, particularly environmental groups.

Natural Resources Minister Joe Oliver has accused “environmental and other radical groups” of trying to use money from “foreign special-interest groups” to hijack hearings on a pipeline that would bring Alberta oil-sands bitumen to a port on the British Columbia coast.

Environment Minister Peter Kent even raised the spectre of criminal activity in a recent interview broadcast on CBC Radio’s The House. Asked by host Evan Solomon if the government is trying to silence environmental groups by taking away their charitable status, Mr. Kent raised concerns about money laundering.

“Some groups with charitable status have been going well beyond the CRA guidelines for what is acceptable practice as a charitable agency,” he said. “And there has also been concern that some Canadian charitable agencies have been used to launder offshore foreign funds.”

The Environment Minister was not available to speak to The Canadian Press.

One group that has been singled out for receiving American grants is Tides Canada, which runs both a grant-making foundation and a charity that backs environmental and social-justice projects. It has reported $7.8-million in foreign income over the years, according to CRA tax returns. That makes Tides the 16th-largest recipient of foreign money.

However, U.S. tax records show a different amount.

Annual filings to the U.S. Internal Revenue Service from tax-exempt and non-profit organizations show the Tides Canada Foundation has received more than $63-million from wealthy American foundations. That would put it third on the list of Canadian charities that received funding from outside the country.

The Gordon and Betty Moore Foundation gave the Tides Canada Foundation almost $33-million, the William and Flora Hewlett Foundation gave it nearly $14-million, the David and Lucile Packard Foundation gave it $11 million, and other groups gave it smaller amounts.

Ross McMillan of Tides Canada said wording on the CRA tax form changed in 2009 to include a line for revenue received from all sources outside Canada. Prior to this charities only reported foreign funding under “other gifts.”

Since pre-2009 CRA tax forms did not distinguish foreign funding from other income, a search of the agency’s database does not turn up a higher number for the Tides Canada Foundation.

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Tags: ideology, philanthropy, rights, tax

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