The COVID-19 pandemic has created challenging economic times and the charitable and not-for-profit sector has been severely impacted. In order for charities and non-profit organizations to continue to provide necessary services, there are some important measures to consider:
Measures To Consider
1. Apply for government programs
- Canada Emergency Wage Subsidy – Non-profit organizations and charities may apply for this program, provided that they have experienced an eligible reduction in revenue and had a Canada Revenue Agency payroll account on March 15, 2020. Registered charities and non-profit organizations may choose whether or not to include revenue from government sources, such as grants, when applying for the subsidy, however, they must take the same approach for each period.
- Temporary 10% Wage Subsidy – A three-month measure that will allow non-profit organizations and registered charities to reduce the amount of payroll deduction required to be remitted to the Canada Revenue Agency.
- Extension of Work-Sharing Program – Not-for-profit employers experiencing a shortage of work due to a reduction of business activity and/or a reduction in revenue levels due to COVID-19 are eligible and the program has been extended to 76 weeks. Income support is provided to employees eligible for Employment Insurance who agree to reduce their normal working hours because of developments beyond the control of their employers.
- Canada Emergency Business Account – Non-profit organizations and/or charities who paid between $20,000 to $1.5 million in total payroll in 2019 can qualify for interest-free loans of up to $40,000.
- Canada summer jobs program - If you are employing people through this program, it will now provide you with up to 100 percent of the provincial minimum hourly wage for each employee. Staff can be hired on a part-time basis, including youth during the academic year, and job placements may run between May 11, 2020 and February 28, 2021.
- Finally, all funded employers are able to amend project and job activities to support the delivery of critical services.
2. Turn the cancellation of events into a potential charitable donation
Provide people with a choice of receiving a refund or turning the amount into a charitable donation. Consideration should be made as to whether the person/organization redirecting the funds should provide direction in this regard.
3. Consider pivoting your fundraising activities into virtual events
Virtual fundraising events can take on many different forms, including live streams of events or virtual tours of a walk/ride.
4. Reach out to the United Way Centraide Canada, the Canadian Red Cross and the Community Foundations of Canada (or their local entities)
The Canadian government has invested $350 million to support vulnerable Canadians through charities and non-profit organizations that deliver essential services to those in need. Most of the money will be received by these three national organizations that will disburse the funds to community-based organizations. Community organizations will be able to apply for funds through these national partners or their local entities.
5. Explore cost-sharing solutions, including finding efficiencies in your organization’s workforce
- If you are a tenant of a commercial building, read our article outlining what commercial tenants can expect in the upcoming months
- If you own the building you are in, contact your lender for potential mortgage deferral options.
- Consider merging your organization with another. For more information read our article here.
- Consider whether or not streamlining staffing may assist with any savings. If your organization requires assistance transitioning to a “virtual” existence, consider utilizing volunteers.
6. Planned giving
The pandemic has led many people to start or revisit their estate plans. Ensure that your members and donors know how to leave a planned gift to your organization.
If the above measures are not enough to help your charity or non-profit organization survive, read our brief article on dissolving your non-profit organization. Prior to making any decisions regarding amalgamation and/or dissolution, we advise consulting with your accounting and tax advisors.
The team at SV Law is here to work with you and help develop a strategy to address the challenges affecting your charitable or not-for-profit organization. Contact us here to begin the process.
 For registered charity employers, qualifying revenue generally includes gifts and other amounts received in the course of its ordinary activities. If the registered charity operates a related business (as defined in subsection 149.1 of the Income Tax Act), the revenue from that related business is also included in the registered charity's qualifying revenue. For non-profit organization employers, qualifying revenue generally includes membership fees and other amounts received in the course of its ordinary activities.
 Public institutions are not eligible for the subsidy. This includes municipalities and local governments, Crown corporations, public universities, colleges, schools, and hospitals.
The content of this article is intended to provide a general guide to the subject matter and is not legal advice. Specialist advice should be sought regarding your specific circumstance.