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.
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The court held that directors of a charity:
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- 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
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For more details, see Ontario (Public Guardian and
Trustee) v. The AIDS Society for Children (Ontario), [2001]
and/or here
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More…
For CRA's policy on directors and trustees, see the Summary Policy
