Reflections from CAGP on the final report from the Special Senate Committee on the Charitable Sector

This past Thursday, June 20^th, the Special Senate Committee released Catalyst for Change: A Roadmap to a Stronger Charitable Sector, the long-awaited report of its findings and recommendations, stemming from a mandate to study Canada’s charitable and non-profit sector and the many challenges it faces.

The 190-page report includes 42 recommendations spanning a breadth of issues impacting Canada’s charities, from strengthening the sector, including issues related to volunteerism, human resources, funding and data collection, to modernizing the legal and regulatory framework governing charities and non-profits, and exploring issues such as the definition of charity, regulation of charitable and revenue-generating activities, and of course, tax measures that strengthen a culture of charitable giving.

After receiving hundreds of reports and submission, and many hours of testimony from an astounding array of witnesses, including our President & CEO, Ruth MacKenzie, and a number of other long-time CAGP members and members of our Government Relations Committee, the Committee has produced a report that is comprehensive and compelling. It has taken a broad, reflective and forward-looking lens that recognizes the breadth of Canada’s charitable sector, as well as the challenges and limitations the sector frequently encounters, and provides a framework of recommendation actions which, if implemented, would certainly set the sector on a course of renewal, greater impact and stronger mission effectiveness.

The report is an interesting and thought-provoking read. Here’s a highlight of the recommendations that have the greatest relevance for CAGP and our mission, with specific excitement around the inclusion of a recommendation pertaining to an examination of a capital gains exemption on gifts of real estate and private company shares, long championed by CAGP and Mr. Donald K. Johnson.

Recommendation 9

That the Government of Canada, through the Minister of Revenue and the Commissioner of the Canada Revenue Agency, direct the Advisory Committee on the Charitable Sector to review existing tax measures available to individual donors in order to strengthen the culture of giving among new and current charitable donors.

Recommendation 17

That the Government of Canada, through the Canada Revenue Agency, seek the advice of the Advisory Committee on the Charitable Sector on what additional information could be included in the Agency’s T3010 form that would support the work of the sector.

Recommendation 34

That the Government of Canada, through the Canada Revenue Agency, develop, implement and evaluate a pilot project on the impact on the charitable sector of exempting donations of private shares from capital gains tax.

Recommendation 35

That the Government of Canada, through the Canada Revenue Agency, study the extent to which the donation of non-environmental real estate could be incentivized without undermining the Ecological Gifts Program.

Recommendation 36

That the Government of Canada direct the Advisory Committee on the Charitable Sector to examine the advantages and disadvantages of amending the disbursement quota for registered charities; and the advantages and disadvantages of setting the disbursement quota in regulation, rather than statute.

Recommendation 37

That the Government of Canada instruct the Advisory Committee on the Charitable Sector to consider means of ensuring that donations do not languish in donor-advised funds, but are instead used to fund charitable activities in a timely fashion.

The Special Senate Committee has no mandate to do further work to implement or advocate for the implementation of any of the recommendations. In fact, in issuing this report, the Committee’s work is complete and its disbanding is imminent.

It's early days but it’s evident that CAGP has an important voice and perspective on any discussions that may take place regarding overall tax measures that incentivize charitable giving, as well as any initiative to explore a capital gains exemption on gifts of real estate and private shares. Our knowledge and expertise will also be an important component of any examination of Donor-Advised Funds and other endowment funds, as a rapidly-growing trend in Canada, and where a consistent, comprehensive and fact-based understanding of the advantages and disadvantages they present as a long term funding strategy for Canada’s charities is crucial.

CAGP has long suggested that data on sources of donor revenue, such as receipted bequests, would be enormously valuable in capturing the utilization of various planned giving vehicles, and that the T3010 would be a simple mechanism through which to collect that data. We are pleased that Recommendation 17 may provide an avenue to continue that dialogue.

As CAGP’s Government Relations Committee considers its next step, we’ve taken the opportunity to write to Senators Terry Mercer and Ratna Omidvar, chair and co-chair of the Committee respectively, to thank them for this exciting work and this seminal report. CAGP will also be connecting to other national umbrella organizations to learn about their respective responses and to explore the need or opportunity for a collective response. The fall election is, of course, a significant factor in any next steps as is the activation of the recently-established Advisory Committee on the Charitable Sector, to which approximately one-third of the Senate Committee’s recommendations are referred.

We’re also happy to share some follow ups on the report from other organizations and partners, including Miller Thomson, Imagine Canada, the Ontario Nonprofit Network, as well as The Philanthropist.

In the meantime, we encourage all members of CAGP to review the report and consider its findings and recommendations in terms of their implications and relevance for CAGP and our local Chapters, charities you work with, and donors and clients you engage with.

With a fall federal election looming, we expect many of you will be engaging with MPs and candidates or their campaigns in your local communities. For those wishing to raise issues regarding Canada’s charitable sector with candidates, Catalyst for Change provides a solid framework on which to do that.