[nSLUG] Donate Hardware to FMM

D G Teed donald.teed at gmail.com
Fri Jul 8 09:17:52 ADT 2016


On Fri, Jul 8, 2016 at 1:03 AM, Daniel AJ Sokolov <daniel at falco.ca> wrote:

> On 2016-07-07 at 12:11, D G Teed wrote:
> > I'm reading news articles which say they can't take other people's
> > money and claim it as their own charity donation.
>
> That is the law as I understand it, yes.
>
> > But I'm not sure it is all trackable when it is simply done as a cash
> > donation container.
>
> That would be fraud.
>

Oh, that never happens.  Especially when the amounts are not recorded.

None of the stories I've read discuss the organizations which run a charity
foundation,
of which there are many in the big chains.  The articles only discuss the
scenario of donating to a third party via the checkout.  When there is a
cost
to operate the foundation, I expect an entirely different set of accounting
rules kick in.

The reality is, tax shelter abuse is widespread, and the CRA only knows
some of it.  Other parts of it are not considered abuse if it is a genuine
loophole.  They know how to play the game.

Here is an example story illustrating one type of fraud under investigation
in 2014:

https://www.thestar.com/news/gta/2014/04/17/canada_revenue_agency_expands_investigations_of_tax_shelters.html

The point is, there is a widespread will to do this, and unless there is
detection
and an applied penalty, the gates are wide open.  It is white collar crime,
where
no one is named, no one goes to jail, and the only risk is you have to pay
it back.
It would be entirely wrong to assume the people with the will to do these
things have a moral compass when the penalty is so light.  Thus my
conjecture
that if it isn't traceable, they could easily say one thing
and do another.

Take a look at the KPMG statement "Basis for Qualified Opinion" in their
auditor's report for President's Choice Children's Charity:

https://www.charityintelligence.ca/media/audit_pdfs/2015-2-31%20President%20Choice%20Children%20Charity%202015%20FS.pdf

KPMG's auditor basically says this is a charity organization, which has a
common trait
of incomplete record keeping.  Average compensation for the charity's
6 staff is $83,611, so I don't expect anyone to blow the whistle on
any grey or rationalized accounting.
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