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RC Forward 2018 Year in Review 2019-05-31T18:27:09.903Z · score: 43 (16 votes)

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Comment by siobhanbrenton on RC Forward - Canada's Effective Giving Experiment: Results & Plans for 2019 · 2019-01-31T18:20:34.644Z · score: 7 (5 votes) · EA · GW

The missing link seems to be on what the Income Tax Act defines as a qualified donee. As mentioned, the Canada-US Tax Convention opens up US registered charities as qualified donees provided they are a 501(c)(3) in good standing with the IRS. Using the 501(c)(3) registration as the backbone of our due diligence package ensures that the work we are supporting in the US is generally exempt from tax and would reasonably be considered tax-exempt in Canada. However, this convention only allows us to facilitate partnerships with US based organizations, or organizations who have a fiscal sponsor that is registered as a 501(c)(3).

Related to CHIMP specifically, we’re not in a place to comment on the financials of a given charity, but we have built in a variety of measures to ensure 100% of our donors’ donations will be passed onto our partner charities, such as:

  1. We make sure that all of the funds raised for our partner charities come to us in cheque form before being distributed to our partners. We do this to ensure that CHIMP has disbursed the exact amount that matches our internal records, and we provide unique tracking codes for our partners to ensure the cheques reach their intended destination, in full.
  2. We also follow up with a confirmation email from our partners to ensure the cheque was able to be deposited with no issues. We also provide our full donor analytics to our partner charities so they can confirm the amounts raised match their distribution.
  3. RC Forward independently covers 100% of CHIMP's fees out of our own operational budget. These funds are raised with the sole focus of covering operations costs and cross-border fees, which allows us to guarantee that 100% of a donation goes to the intended high-impact charity.

While we are aware of the links provided above, we don’t feel well-placed to comment on CHIMP operations beyond the scope of our specific, well-documented arrangement. We have yet to encounter a formal reason to reconsider this collaboration and take great care in working with organizations verified by the CRA. John Bromley (CHIMP CEO) was introduced to us at EA Global in 2017 and he seemed genuinely interested in supporting EA. RC Forward and our beneficiary charities have yet to have an experience that suggests otherwise. We look forward to maintaining our organizational relationship.

Comment by siobhanbrenton on RC Forward - Canada's Effective Giving Experiment: Results & Plans for 2019 · 2019-01-27T22:43:24.197Z · score: 7 (5 votes) · EA · GW

Article XXI of the Canada–US Tax Convention allows us to make this happen. The legal analysis is that a 501(c)(3) qualifies as a registered charity pursuant to Article XXI which reads: “For the purposes of Canadian taxation, gifts by a resident of Canada to an organization which is resident in the United States, which is generally exempt from United States tax and which could qualify in Canada to receive deductible gifts if it were created or established and resident in Canada shall be treated as gifts to a registered charity;”.

However, Canadians cannot directly receive a tax benefit from donations to a 501(c)(3) charity unless they have U.S. source income. Rethink Charity Forward works with the CHIMP Foundation, a registered Canadian Charity (845528827 RR0001) to create donor-advised funds for non-Canadian charities that that are registered 501(c)(3) organizations. As a tax-exempt Canadian registered charity, CHIMP is able to facilitate cross-border grants composed of donor-advised funds. Since charities are not required to issue tax-receipts to other charities, this decision to only move charity-to-charity grants cross-border protects the Foundation from any disputes related to the issuance of charitable donation receipts to individual donors giving to non-qualified donees.

Comment by siobhanbrenton on RC Forward - Canada's Effective Giving Experiment: Results & Plans for 2019 · 2019-01-27T22:32:35.130Z · score: 7 (5 votes) · EA · GW

1. Thanks for pointing this out! I agree and I think that there is a large market of Canadians wanting to donate effectively that have not yet been reached, or have not yet heard about high-impact giving. We are working on ways to take over more of the Canadian donor market share in 2019 and this would be impossible without tax incentives like the ones we have provided.

2. I don't believe there is an easy way to give to EA Funds at the moment, but we are constantly adding more options for effective giving. Since CEA is a registered 501(c)(3) in the United States we could see this option being added to the platform in 2019, provided our setup would work with the way CEA administrates EA Funds.

3. We are currently using CHIMP's software for direct donations made via credit card and are unable to change the functions pre-set in their provided donation buttons, so adding a 'tip' option for credit card donations is unlikely but worth exploring. However many of our donations are made through either Interac E-transfers or cheques, which are administered without the use of a donor-filled form for now. Once RC Forward receives tax-exempt status we will be working on ways to automate tax-receipting, and adding a tip option for donors to opt-in to during information collection is a great idea!

Comment by siobhanbrenton on RC Forward - Canada's Effective Giving Experiment: Results & Plans for 2019 · 2019-01-27T22:08:06.923Z · score: 5 (3 votes) · EA · GW

Allan, thanks for your support! Canada has a very complicated system when it comes to registering charities. Not only can it easily take over a year working with the Canadian Revenue Agency (CRA) to get registered, but the annual upkeep needed by professional accountants and lawyers will likely not make it worth while for many high-impact charities as it would cost more than our platform. It is likely, however, that in other countries with different tax structures that the reverse would be true.

As for our value add for Canadian-registered charities, our primary reason for setting up RC Forward this way was the ease and consistency of donor experience. If donors create an account with CHIMP (they don't have to), they are able to put money into their account and distribute it easily as they see fit among any number of charities. Since a large number of donors come in from GiveWell or other EA hubs, we would essentially be making it "one-stop shopping".