F12. Who is ultimately responsible for registered charity fundraising?

F12. Who is ultimately responsible for registered charity fundraising?


Short answer

The legal responsibility for fundraising lies with the charity and its board of directors. The charity and its board of directors have to provide direction and exercise control over all fundraising activities.

Long answer

Directors have a responsibility to exercise prudence in overseeing the operations of a charity and protecting its charitable property, which includes protecting the charity's property from undue risk of loss and ensuring against excessive administrative expenses.

Example

The duty placed on directors of charities from fundraising programs was underscored in a 2001 Ontario case in which the court found the AIDS Society for Children and its three directors liable for unreasonable fundraising costs of almost $740,000 and imposed a further $50,000 penalty on the directors of the charity. It had been discovered that despite raising over $920,000 through public donations, no funds had been spent on charitable programs. More than 76 per cent of the money raised went to fundraising companies for fees.

The court held that directors of a charity:

    • have an obligation to the charity and the property held by the charity
    • are accountable to the public for all funds publicly raised
    • are accountable to use such funds to further the objects of the charitable institution

For more details, see Ontario (Public Guardian and Trustee) v. The AIDS Society for Children (Ontario), [2001] and/or here

More…

For CRA's policy on directors and trustees, see the Summary Policy