Understanding undue benefit

Charities in Canada are not allowed to bestow undue benefit, a situation where an individual, corporation, or other entity receives a tangible benefit from their involvement with a particular charity. This is a very important issue for charities to understand since the penalty for giving an undue benefit is 105% of the benefit for a first offence and 110% of the benefit for a second offence. Although there are many examples of how charities can get into trouble with undue benefit, a common difficulty that charities should watch for is member and non-member pricing.

Understanding undue benefit

Difficulties with Canada's charity regulations

Late last year, the C.D. Howe Institute published a white paper written by Adam Aptowitzer where he argued that because the federal government does not have the necessary jurisdiction to regulate charities, it is forced to use the registration system, through the Canada Revenue Agency, to enforce regulations more generally. This podcast provides further clarification and discussion of Aptowitzer's paper, and is of vital interest to anyone working in the nonprofit sector.

Difficulties with Canada's charity regulations