F17. Would I be held responsible for illegal fundraising if someone else carried it out?

F17. Could I be held responsible for illegal fundraising if someone else carried it out?

Short answer

Very possibly. Assuming you are a board member, you are responsible for direction and control of your charity. Due diligence is expected of you as a board and of a charity's directors and officers.

Illegal fundraising by a registered charity is prohibited whether carried out by the registered charity or by a third party on behalf of the registered charity. In the same way you are responsible for maintaining direction and control of your charity, you have to maintain direction and control of any third party fundraiser.

You must take all necessary steps to ensure that fundraisers working on behalf of your charity are complying with all applicable laws.

In particular, fundraising to facilitate or advance an illicit gifting arrangement or involving improper issuance of donation receipts is not charitable and can lead to revocation of your charitable status.

Long answer

The possibility of revocation for a registered charity applies even when the fundraising activity is not in itself illegal, but is associated with illegal conduct. Where a charity knows, or ought to have known, that through its fundraising it is furthering illicit practices or transactions, the Canada Revenue Agency takes the position that this fundraising is grounds for revocation.

The courts have held that fundraising contracts can be harmful to the public interest if they result in misrepresentation to the public about whether donated amounts go to the charity or to pay the fundraising company collecting them. Charities are prohibited from entering into fundraising contracts that result in the public being misled about the use of donations.

Making a fundraising solicitation that does not comply with Canadian Radio-television and Telecommunications Commission directives, the CRTC's telemarketing rules, or other established government policy may be considered contrary to public policy and is also prohibited.


See the CRA's summary policy on accountability