Thank you, Mr. Chairman.
My name is Mark Blumberg. I'm a charity lawyer in private practice and a volunteer with the Association of Fundraising Professionals' Canadian government relations committee. I've written quite extensively on Bill C-470, and I'm grateful for the opportunity to address you today.
The Association of Fundraising Professionals, also known as the AFP, is a global professional association for individuals responsible for generating philanthropic support for a variety of non-profit charitable organizations. The AFP advances philanthropy in society by enabling people in organizations to practise effective and ethical fundraising. The core activities through which AFT fulfills this mission include education, training, mentoring, research, and credentialling. AFP is the largest association of fundraisers in the world, representing more than 30,000 practitioners, including 3,100 members in 16 chapters across Canada.
AFP appreciates the spirit of Bill C-470, strongly supports transparency and good stewardship, and is pleased to learn of recent amendments proposed relative to the bill. However, we remain concerned about the bill for a number of reasons.
First, there are already rules on charity compensation. CRA notes that compensation should be fair and reasonable. Otherwise, if compensation were disproportionate to the services rendered, it would contravene the Income Tax Act. The CRA's fundraising guidance, which is available on the charities directorate website, also discusses good staffing processes and notes that the salary should “never exceed the fair market value for the services provided”.
Second, a regulatory framework for transparency already exists. On the revised T3010B , the Canada Revenue Agency already requires that charities must provide compensation information for their ten most highly paid employees in one of nine ranges to the CRA, which then publishes them. Creating another secondary disclosure is unnecessary.
Third, non-profit board members and administrators are already subject to CRA scrutiny and have a fiduciary duty to make sure that all decisions, including those concerning employee and executive compensation, are made in the best interests of the registered charity.
Fourth, CRA already has the power to ask charities, first, to provide additional compensation detail as it deems appropriate, and second, to publish that information. This appears to make the bill as revised unnecessary.
Fifth, providing simply the name, job title, and annual compensation without context could be misleading. One researcher might be paid $150,000 and another $250,000. Which charity is providing appropriate compensation? Or might both be appropriate subject to differing circumstances? To know the answer, an individual would require information including, but not limited to, information on experience, professional qualifications, amount of responsibility, and comparable market compensation.
AFP has strongly supported past tough measures to enhance transparency and accountability, including the June 2009 guidance on fundraising, which owing in large part to open, comprehensive, and cross-sector consultation was well designed and welcomed by the sector. Indeed, the recent Attorney General’s report, while noting capacity challenges, specifically highlighted CRA's improved performance in charity regulation and enforcement.
AFP proposes that this bill not go forward at this time. Instead, we propose that the charities directorate of the Canadian Revenue Agency be instructed to immediately and urgently undertake consultation with the sector and other interested parties about increasing transparency and accountability. CRA Canada, without changes to the Income Tax Act, has already significantly increased disclosures in the T3010B on a number of different issues, including expanding salary ranges from $120,000 to $350,000 and up. That did not require any legislative changes, and I don't believe Mrs. Guarnieri was even aware of that change.
AFP strongly believes that it would be beneficial to this sector, its stakeholders, and the CRA to have greater transparency and more relevant information available. CRA has a proven record of delivering on such matters.
In conclusion, AFP would like to thank the Standing Committee on Finance for this opportunity to appear, and we are available to provide any additional information you require in your deliberations on this important issue.
Thank you.