This document summarizes an event hosted by SkyLaw Professional Corporation on June 22, 2016 about demystifying charities, not-for-profits, and social enterprises. SkyLaw is a boutique law firm that provides legal services to companies and organizations. The event featured presentations by lawyers from SkyLaw on legal structures for non-profits and answered audience questions.

1. Social
Venture
Partners
Toronto
Hosted
by
SkyLaw
Professional
Corporation
Toronto,
ON
|
June
22,
2016
Demystifying
Charities,
Not-­‐For-­‐Profits
and
Social
Enterprises
SVP
Wine
&
Learn
Education
Event:

2. 2
SkyLaw Professional Corporation
SkyLaw is a boutique corporate and
securities law firm offering sophisticated
legal and strategic advice to public and
private companies and shareholders
through an innovative law firm structure.
.
www.skylaw.ca
Brought
to
you
by:
Social
Venture
Partners
Toronto
Using
the
venture
philanthropy
model,
SVP
helps
progressive
and
innovative
charities
increase
their
ability
to
create
positive
change
in
Toronto
and
in
so
doing,
educate
and
unleash
the
full
potential
of
progressive
Toronto
philanthropists
to
become
true
change-­‐makers.
www.socialventurepartners.org
Hosted
by:

3. Kevin
R.
West
Founder
SkyLaw
• Kevin
is
a
senior
corporate
and
securities
lawyer
with
more
than
16
years
of
experience.
• After
clerking
for
Justice
Binnie
at
the
Supreme
Court
of
Canada,
Kevin
practiced
with
Sullivan
&
Cromwell
in
New
York
and
Australia
and
was
a
partner
at
Davies
in
Toronto
for
over
5
years.
• Kevin
founded
SkyLaw
in
2010.
• Kevin
works
with
many
not-­‐for-­‐profit
corporations,
charities
and
social
enterprises
and
leads
several
pro
bono
initiatives
at
SkyLaw.
Kevin
has
volunteered
his
time
with
a
number
of
organizations,
including
as
a
partner
with
Social
Venture
Partners,
as
a
director
of
Skills
for
Change
and
on
the
corporate
governance
committee
of
Project
Canoe.
3
Presented
by:

4. Andrew
Cooley
Associate
SkyLaw
• Andrew
joined
SkyLaw
as
a
corporate
and
securities
lawyer
in
2015.
• Prior
to
joining
SkyLaw,
Andrew
was
an
associate
at
Davies
Ward
Phillips
&
Vineberg
LLP
in
Toronto
where
he
had
a
broad
corporate
practice.
• Andrew
has
helped
form
not-­‐for-­‐profit
corporations
and
has
worked
on
a
variety
of
transactions
including
mergers
and
acquisitions,
proxy
contests
and
other
shareholder
activism
matters,
financings,
fund
formations
and
general
corporate
matters.
• He
also
has
experience
advising
companies
and
shareholders
on
corporate
governance,
disclosure
and
compliance
matters.
4
Presented
by:

5. Devi
Panday
Senior
Law
Clerk
SkyLaw
• Devi
is
a
Senior
Corporate
Law
Clerk
with
more
than
11
years
of
experience.
• Prior
to
joining
SkyLaw,
she
worked
in
the
charities
group
at
Blake,
Cassels &
Graydon LLP,
Miller
Thomson
LLP,
as
well
as
in-­‐house
at
a
public
corporation.
• Devi
specializes
in
corporate
governance
and
transactions.
She
assists
in
all
matters
with
respect
to
incorporating,
organizing
and
maintaining
corporations
and
charities,
including
by-­‐law
development,
preparation
of
resolutions
and/or
minutes,
as
well
as
compliance
matters
such
as
annual
returns
and
business
name
registrations.
5
Presented
by:

6. About
Our
Host:
SkyLaw
Professional
Corporation
SkyLaw
is
a
corporate
and
securities
law
firm
that was
recently
named
one
of
Canada’s
Top
10
corporate
law
boutiques
by
Canadian
Lawyer
Magazine.
The
SkyLaw
team
works
with
a
variety
of
public
and
private
companies
and
provides
top
tier
legal
services
to
its
clients
around
the
globe.
6

7. About
Our
Host:
SkyLaw’s
Community
Involvement
The
SkyLaw
team
is
actively
involved
in
the
community.
We
volunteer
for
a
variety
of
organizations
and
provide
our
services
to
clients
that
are
making
a
real
difference.
Here
is
a
list
of
some
of
our
current
clients
that
we
support:
• SkyLaw
assisted
Social
Venture
Partners
Toronto
tobecome
a
not-­‐for-­‐profit
corporation
on
a
pro
bono
basis.
• We
are
a
proud
Corporate
Partner
of
SkyLaw
client
Women
Get
on
Board
Inc.,
an
organization
that
connects,
promotes
and
empowers
women
to
corporate
boards.
• We
are
a
strong
supporter
and
Corporate
Partner
of
SkyLaw
client
Toronto
Homecomingsince
its
inception
in
2010,
with
a
mission
to
boost
the
Toronto
economy
by
connecting
Canadians
working
abroad
with
professional
opportunities
in
Toronto.
• SkyLaw
supports
the
Tyson
Bailey
Fund, dedicated
to
helping
underprivileged
young
athletes,
by
providing
pro
bono
corporate
services.
7

8. 8
Demystifying
Charities,
Not-­‐For-­‐Profits
and
Social
Enterprises
Question
&
Answer
Period:

9. Question
#1:
What
is
a
registered
charity?
• A
charity
is
an
entity
that
has
been
registered
with
the
Canada
Revenue
Agency
as
a
charity.
• A
charity
is
required
to
have
only
charitable
purposes:
• Relief
of
poverty
(food
bank)
• Advancement
of
education
(university)
• Advancement
of
religion
(place
of
worship)
• Other
purposes
that
benefit
the
community
(library)
9

10. Question
#2:
Why
become
a
registered
charity?
• Charities
can
issue
tax
receipts
for
donations
of
money
or
property.
• Charities
do
not
pay
income
tax
on
any
income
earned.
• To
receive
grants
from
other
charities,
governments
and
foundations
that
are
only
available
to
charities.
• To
use
the
designation
as
a
charity
to
encourage
volunteers
and
raise
profile
in
the
community.
10

11. Question
#3:
Can
you
do
charitable
work
without
registering
as
a
charity?
• Yes,
but
you
would
not
have
the
benefits
of
a
registered
charity
(see
previous
slide).
• For
example,
you
could
incorporate
a
not-­‐for-­‐profit
corporation
or
simply
work
as
a
group
or
on
your
own
to
benefit
the
community.
• You
do
not
need
to
incorporate
to
register
as
a
charity.
11

12. Question
#4:
What
is
the
difference
between
a
charity
and
a
not-­‐for-­‐profit
corporation?
12
• Most
charities
start
as
a
not-­‐for-­‐profit
corporation
and
then
apply
to
the
CRA
for
registration
as
a
charity
and
have
only
charitable
objectives.
• Not-­‐for-­‐profit
corporations
can
be
incorporated
federally
or
in
any
province,
whereas
charitable
status
is
a
tax
designation
for
any
type
of
organization.
• Both
not-­‐for-­‐profit
corporations
and
charities
must
prepare
annual
financial
statements,
but
charities
must
annually
file
these
statements
and
other
information
that
can
be
accessed
on
the
CRA
website.

13. Question
#4
(continued):
What
is
the
difference
between
a
charity
and
a
not-­‐for-­‐profit
corporation?
13
• A
charity
must
meet
its
annual
disbursement
quota
by
spending
each
year
at
least
3.5%
of
the
value
of
its
property
on
its
own
charitable
programs
or
on
gifts
to
qualified
donees,
such
as
another
registered
charity.
• Charities
are
exempt
from
paying
income
tax,
while
not-­‐for-­‐profits
generally
do
not
pay
income
tax
provided
that
profits
are
incidental
and
operate
primarily
on
a
cost-­‐recovery
basis
and
should
not
have
an
unreasonably
high
accumulated
surplus.

14. Question
#5:
How
can
a
charity
start
a
social
enterprise?
• A
social
enterprise
is
any
organization
that
is
generally
a
social
purpose.
There
is
no
legal
or
tax
definition.
• A
charity
can
run
a
social
enterprise
that
is
a
“related
business”.
A
related
business
is
generally
one
that
is
substantially
run
by
volunteers
or
that
is
linked
to
a
charity’s
purpose
and
subordinate
to
that
purpose.
• To
be
linked
to
a
charity’s
purpose
it
must
be
(i)
usual
and
necessary
to
the
charity’s
program,
(ii)
an
offshoot
of
the
charity,
(iii)
use
excess
capacity
or
(iv)
involve
the
sale
of
items
that
promote
the
charity.
• See
the
CRA’s
policy
statement
“What
is
a
related
business?”
14

15. Question
#6:
What
is
a
“dual-­‐purpose”
corporation?
• In
May
2014,
the
Ontario
government
examined
dual
purpose
corporate
structure
legislation.
• The
legislation,
if
adopted,
would
create
a
new
type
of
corporation
that
would
have
a
dual
purpose:
a
social
or
environmental
purpose
as
well
as
a
private,
for-­‐profit
interest.
• Dual
purpose
corporate
structure
legislation
has
been
passed
in
British
Columbia,
Nova
Scotia
and
the
United
Kingdom.
15

16. Question
#7:
What
kind
of
personal
liability
do
I
have
as
a
director
on
a
charity?
16
• Directors
manage
or
supervise
the
management
of
the
corporation,
including
not-­‐for-­‐profits.
• Directors
have
a
fiduciary
duty
to
the
corporation
and
not
the
interests
of
any
party
they
may
feel
they
represent.
• Directors
are
required
to
exercise
the
level
of
skill
and
judgment
of
a
person
with
his
or
her
knowledge
and
experience.

17. Question
#7
(continued):
What
kind
of
personal
liability
do
I
have
as
a
director
on
a
charity?
17
• Directors
must
also
adhere
to
the
rules
of
fiduciary
duty,
including:
• good faith
• honesty
• loyalty
• confidentiality
• avoidance
of conflicts
of
interest

18. Question
#7
(continued):
What
kind
of
personal
liability
do
I
have
as
a
director
on
a
charity?
18
• Generally,
as
long
as
directors
act
in
the
best
interest
of
the
corporation
and
follow
a
proper
process
relying
on
the
advice
of
experts,
where
appropriate,
they
will
not
be
held
accountable
for
an
error
in
judgment.
• Corporations
are
separate
legal
entities
and
directors
generally
will
not
be
held
personally
liable
for
debts
or
obligations
of
the
corporation,
with
some
exceptions:
• Breach
of
fiduciary
duty
or
breach
of
trust
• Unpaid
employee
wages
• Failure
to
deduct
or
withhold
and
remit
certain
taxes
• Non-­‐compliance
with
specific
statutes

19. Question
#8:
Do
employees
at
a
charity
have
the
same
responsibilities
and
protections
as
employees
at
for-­‐profit
business?
• Yes,
all
provincial
and
federal
laws
apply
to
charities
the
same
way
they
would
apply
to
any
other
business
(e.g.
employment
standards
act,
health
and
safety
legislation,
anti-­‐spam
legislation,
etc.).
• Employees
at
charities
can
be
unionized
and
are
entitled
to
severance
if
they
are
dismissed
without
cause.
19

20. Question
#9:
Why
can’t
I
get
a
tax
receipt
for
donating
my
services
to
a
charity?
• Charities
can
only
give
official
tax
receipts
for
gifts,
which
at
common
law
is
a
voluntary
transfer
of
money
or
property.
Contribution
of
services
(time
and
skill)
are
not
property,
so
a
receipt
can’t
be
issued.
• Publicly-­‐traded
shares
can
be
donated
and
the
donor
will
receive
a
tax
receipt
for
the
fair
market
value
at
the
time
of
donation,
generally
without
paying
tax
on
any
capital.
20

21. Question
#10:
What
is
Ontario’s
Not-­‐for-­‐Profit
Corporations
Act
(“ONCA”)?
• The
ONCA
is
the
new
and
modern
legislation
that
will
replace
Ontario’s
Corporations
Act, which
currently
governs
Ontario
not-­‐for-­‐profit
corporations.
• The
ONCA
is
not
yet
in
force
and
a
firm
date
for
its
adoption
is
unknown
at
this
time.
Regulations
to
the
ONCA
have
not
been
released
yet.
The
government
will
give
the
not-­‐for-­‐profit
sector
at
least
24
months’
notice
before
the
ONCA
comes
into
force.
21

22. Question
#10
(continued):
What
is
Ontario’s
Not-­‐for-­‐Profit
Corporations
Act
(“ONCA”)?
• Existing
Ontario
not-­‐for-­‐profit
corporations
will
have
a
three-­‐year
transition
period
once
the
ONCA
is
in
force.
• The
Canada
Not-­‐For-­‐Profit
Corporations
Act came
into
force
in
October
2011
and
is
substantially
similar
to
the
ONCA.
22

23. Question
#11:
What
is
the
role
of
organizations
like
TIDES
CANADA
and
TORONTO
FOUNDATION?
• Donor
advised
funds
– direct
annual
grants
to
charitable
organizations
within
Canada
(must
have
a
minimum
amount
in
funds
before
making
grants).
• Administrative
services
(accounting,
legal,
donation
receipting
and
granting).
• Professional
investment
management.
• All
regulatory
filings.
23

24. 24
Andrew
Cooley
Associate
Tel:
416.644.3190
Email:
andrew.cooley@skylaw.ca
Devi
Panday
Senior
Law
Clerk
Tel:
416.644.3190
Email:
devi.panday@skylaw.ca
Want
to
know
more?
If
you
have
any
further
questions,
please
contact:
Kevin
West
Founder
Tel:
416.644.3190
Email:
kevin.west@skylaw.ca

25. Social
Venture
Partners
www.socialventurepartners.org
Thank
you
for
joining
us!