Lands Trust Alliance BC | Organizational Assessment

Standard 5: Philanthropy and Fundraising

The land trust conducts philanthropy and fundraising activities in an ethical and responsible
manner.

Background

Raising money through philanthropy and fundraising activities is a critical and ongoing activity for every active land trust. Philanthropy is a voluntary gift eligible for a tax receipt. Fundraising activities generally include some type of benefit to the supporter such as at a special event, lottery or gaming, for which no receipt may be issued. Land trusts should approach fundraising as a way to build longtime supporters and friends of their conservation mission. Charitable solicitations and fundraising activities should be undertaken not only with an eye toward meeting short-term needs, but also with an understanding of how philanthropy and fundraising practices affect the long-term credibility of the land trust. A good source of charitable giving standards is Imagine Canada, an organization formed in 2004 with the joining of the Canadian Centre for Philanthropy (CCP) and the Coalition of National Voluntary Organizations (NVO). Imagine Canada’s standards can be found on the website: www.imaginecanada.ca

Relevant Law

Charitable solicitation and fundraising :

Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see

Gift acknowledgement :

Canada Revenue Agency policy interpretation of Income Tax Act, SC 1985, c. I; see:
- http://www.cra-arc.gc.ca/tx/chrts/plcy/csp/csp-d17-eng.html

Privacy of personal information, especially re: donors :

Personal Information Protection Act, SBC 2003, c. 63
Personal Information Protection and Electronic Documents Act, SC 2000, c. 5.

PRACTICE

A. Legal and Ethical Practices

The land trust complies with all charitable solicitation laws, does not engage in commission-based philanthropy and fundraising, and limits costs for philanthropy and fundraising expenditures to a reasonable percentage of overall expenses.

Background

There is increasing federal and provincial regulation of philanthropy and fundraising practices, and public and donor scrutiny of non-profit charitable solicitation activities. Charitable solicitation laws are designed to enhance public accountability and to aid potential donors by making government-required registration material and financial reports available to the public. Land trusts should be familiar with laws governing charitable solicitation in their jurisdictions. Compliance with the standards of the philanthropy and fundraising industry is considered prudent for land trusts.

Professionals raising money in the charitable sector are discouraged from engaging in commission-based fundraising by national associations. Imagine Canada’s Ethical Fundraising & Financial Accountability Code states “Paid fundraisers, whether staff or consultants, will be compensated by a salary, retainer or fee, and will not be paid finders' fees, commissions or other payments based on either the number of gifts received or the value of funds raised. Compensation policies for fundraisers, including performance-based compensation practices (such as salary increases or bonuses) will be consistent with the charity's policies and practices that apply to non-fundraising personnel.” (See www. imaginecanada.ca.) Imagine Canada’s code complements the professional codes of ethics and standards of practice to which many professional fundraisers individually adhere, such as those of the Association of Fundraising Professionals, the Canadian Association of Gift Planners, and other national and provincial organizations.

Funds spent in excess of 80% of charitable receipts can be carried back one year to offset a shortfall in that period. A charity can also draw on an excess for up to five of its following fiscal periods to help it meet its disbursement quota. A charity can draw on previous years’ excesses to cover a shortfall. If no excesses are available to draw on, a charity can try to spend enough the following year to create an excess that will make up for the shortfall. However, continuous shortfalls can lead to revocation of the charity’s registration. For more information, refer to bulletins on the CRA website at www.cra-arc.gc.on.

Assessment Questions

BC Assessment Questions

Is the land trust familiar with the standards of the Association of Fundraising Professionals?
Is the land trust aware of charitable solicitation laws, including CRA expectations around fundraising activities?
Does the land trust have a mechanism to account for and evaluate its fundraising expenditures?

CLTA Assessment Questions

What is the percentage of the land trust’s operating expenses allocated to fundraising?
Does the land trust complete an annual fundraising plan to ensure diversified funding?
Does the land trust have members and/or contributors?
- If yes, how many members and/or contributors?

Standard 5: Philanthropy and Fundraising

Background

Relevant Law

PRACTICE

A. Legal and Ethical Practices

Background

Assessment Questions

BC Assessment Questions

CLTA Assessment Questions

Resources: Example Policies & Template Documents

Template Documents

Example Policies