Let’s start with the most obvious. Canadian individuals and corporations can donate to numerous Canadian registered charities that are dealing with the situation in Ukraine and neighbouring countries.
Here are examples of some of the groups:
- Canadian Red Cross Society
- Humanitarian Coalition
- Canada-Ukraine Foundation
- SOS Children’s Villages Canada
- Save the Children Canada
- UNICEF Canada
For most people, and even companies, this is a simple and effective way to help in Ukraine. Donating cash is usually far more helpful and quicker than donating goods.
With respect to the Canadian Red Cross Society, there was a match for $10 million that was quickly met. Then, the Canadian government upped the match to $30 million and that was met. Clearly, Canadians are being quite generous – not surprising in light of the magnitude and importance of the war in Ukraine.
While Canadian registered charities can issue official donation receipts there is also a broader group called “qualified donees” that can issue official donation receipts and they include the United Nations and its agencies. Therefore, all UN agencies (for example, UNHCR or UNICEF or the World Food Program) are considered to be qualified donees as well and therefore you can give to the Canadian charity or directly to the UN group and receive an official donation receipt.
For most people or groups this is all they really need to know. I will continue with some other more in-depth points now.
- For registered charities, depending on your objects, you may be able to assist as well. For most registered charities, the best thing to do if your objects permit is to make a gift to a Canadian registered charity or qualified donee that is working on the situation in Ukraine. While we will discuss below carrying out your own project in Ukraine, for most charities having your own project is not the best approach and supporting other charities makes the most sense. Keep in mind that you can change your registered charity’s objects if you wish. Normally this involves asking CRA for approval of new objects. CRA typically processes object changes in 1-4 months but in the case of Ukraine, they will probably expedite the review and it may only take days or a week or two. In some cases, the objects can be changed and CRA approval can be obtained later on.
- For Canadian charities that are making public fundraising appeals for the situation in Ukraine, it is important to make sure that you are careful in what you’re asking people to donate to. You want to ensure that the purpose of the fundraiser is broad enough or that you have a secondary purpose. For example, if you say we are raising money for a particular city in Ukraine and that city is overrun and you can no longer carry out the activities that you wish to carry out then you might have a problem. So, best to keep the nature of the appeal broader and also to have a cy pres provision such as ‘to assist those affected by the war in Ukraine, whether in Ukraine or elsewhere’ so that you will always be able to spend the funds on what they are intended. Having a purpose that may become impossible to fulfill, unfortunately, can be difficult to change and may require a court order which is time-consuming and expensive. It is easy to prevent that problem with a little forethought. Also, any fundraising done for registered charities should comply with CRA’s guidance dealing with fundraising.
- Some Canadian charities will send staff and volunteers into Ukraine and obviously, it is very important to keep in mind the tremendous risk associated with having staff and volunteers in a war zone. CRA in their guidance on foreign activities reminds charities in terms of risk:
4.2 What if a charity’s activity puts people at risk?
If a charity’s activity exposes anyone to the risk of harm, it may affect the charity’s registration.
When the CRA looks at whether a charity meets the public benefit test, it considers whether the activities are likely to result in harm to the charity’s staff, its beneficiaries, or anyone else. To meet this test, the charity must be able to show a net public benefit, that is, that the potential benefit is greater than any harm that might result.
On a practical level, the CRA recognizes that many situations involve some element of risk. Sometimes, it is not possible to predict all outcomes, especially in quickly changing international environments. However, organizations should be able to show an awareness of the risk an activity poses. If they intend to proceed with the activity, they should have a plan to keep risks at an acceptable level.
The facts of every situation are different, and it is not possible to provide a comprehensive guide on managing risk for all activities. To determine if a charity is doing enough to evaluate and manage the relative levels of benefit to risk, the CRA usually looks at these factors:
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the likelihood and nature of harm to anyone delivering the activity, receiving the benefit, or otherwise affected
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the urgency of the need for charitable assistance (for example, will the activity help desperate people in regions affected by a disaster, or in war zones?)
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the charity’s experience operating in situations with significant risk
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the charity’s proposed measures to keep risk at an acceptable level
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- Canadian charities with the appropriate objects can work directly with groups that are not qualified donees in Ukraine. These groups include organizations, businesses, individuals, etc. These groups that provide help to beneficiaries are called “intermediaries.” Canadian charities cannot “donate” or “gift” funds to these groups. However, in general, a Canadian charity with appropriate objects can hire these intermediaries to do work in Ukraine and in neighbouring areas. We have a whole directory of resources on this topic of establishing “structured arrangements” with intermediaries. This is more than ‘having an agreement’ with the group but includes due diligence, a description of the activity to be conducted, reporting, periodic payments if the amounts are large and keeping adequate books and records of the activities, etc. CRA’s guidance on foreign activities discusses in detail the requirements for Canadian charities operating outside of Canada but our resources may be helpful for groups considering working directly with groups in Ukraine or neighbouring areas.
- There are rules when it comes to operating in a disaster. It is not a wild west. There are rules for Canadian legal requirements for Canadian charities but also local laws that could be applicable. Failure to be aware of Canadian or local rules, irrespective of good intentions, can result in severe consequences. For example, for a charity, there are limits on how much one can assist one person or group. CRA has not yet posted a note on the unfolding situation in Ukrainian and hopefully, they will one day.
- If your organization will be operating directly in Ukraine either with staff or volunteers or if you’re hiring an intermediary keep in mind that there are some sanctions against certain regions in Ukraine and individuals and that those sanctions may be updated. For more information, see the federal government website dealing with Ukraine sanctions.
- As well, Canadian charities are not allowed to support the armed forces of a foreign country. It is beyond the scope of this article to discuss individuals and non-profits providing support to the armed forces of a foreign country. If Canada becomes more involved in this conflict, Canadians may need to also consider supporting charities that provide support to the Canadian military.
- Many foundations have objects that allow them to donate to registered charities or qualified donees. The foundation can provide gifts to Canadian registered charities that are doing work in Ukraine as noted above and, for most foundations, this is the best approach. For some foundations with broader objects, they could carry out direct work with intermediaries in Ukraine as discussed above.
These are some quick thoughts and hopefully these points are helpful. We are assisting Canadian charities and philanthropists who are responding to the crisis in Ukraine. If you wish to retain our law firm, you can contact us.