The non-profit world is in a lot of turmoil at the moment. There have been many unfortunate developments, for example, in the United States, that are very ominous, to say the least.
On November 9, 2024, we wrote an article entitled Will the Trump presidency result in more international organizations incorporating or moving to Canada. We thought that the Trump presidency would be very bad for many groups in the US. It appears that it may be far worse than we had thought. The above article discusses some of the structuring options.
For many US groups, there is no way and no interest in moving anywhere. If you are an evangelical church in Texas, you are not moving to Canada. If you are a community foundation in Los Angeles, you are not moving to Canada. If you are a social service agency in Buffalo focused on helping homeless people, you are not moving to Canada or establishing a headquarters in Canada.
However, tens of thousands of non-profit organizations in the US are primarily concerned with international work, or the work that they do in the US can be largely or completely done virtually. Some of them receive some funding from the US, while others receive a lot of funding from outside the US. Some have a workforce that is all over the world, and it may become increasingly difficult for their foreign employees to even reach the US headquarters. Some US groups have extensive reserves or investments, and they are worried that either the US government or an American bank will freeze those funds or assets or confiscate them. It may make sense for some groups in the US and elsewhere to establish an affiliate in Canada, or it may make sense that the headquarters be based in Canada.
The big question is, when does one start to prepare for a potentially dramatically increased hostile environment? Does one wait till funding is cut? Does one wait for when your organization’s bank account is frozen because you have a ‘woke’ agenda?
Every group will have a different mission and appetite for risk. Every group is going to be affected differently by the uncertain and problematic climate in the US. There is nothing wrong with hoping that the next 4 years will not be as bad as one thinks they could be. But as they say, hope is not a plan.
This course will cover:
- the Canadian regulatory environment for non-profit organizations and how it is different from the US;
- the advantages and disadvantages of a US non-profit organization establishing a presence in Canada, whether it is just an affiliate or an international headquarters;
- different entities in Canada that would be more appropriate for an international non-profit;
- the differences between non-profits and registered charities in Canada;
- the process for establishing Canadian non-profits and the process for some of obtaining registered charity status;
- cross-border issues and transfers of funds;
- the importance of membership and maintaining control of the non-profit;
- costs and timelines for establishing different types of non-profit entities and backlogs with certain types of filings;
- how some groups may want a staged approach; and
- the ongoing regulatory requirements for non-profits and charities in Canada.
This course is not about “fundraising in Canada” as we might have discussed in the past. It will focus on valuable information for organizations in the US trying to think through options that are available to them in an increasingly hostile environment.