Unpublished letter submitted to the Toronto Star
Re: Public must be warned, Editorial, October 28, 2015.
The revelation by The Star that yet another charity has been revealed to be fraudulent should come as a surprise to no one. What is surprising is how feeble the laws are governing this and other charitable enterprises. In Canada if you register a business you immediately have protection from criminal prosecution because questionable activities are deemed a civil matter as long as you are making an effort of any kind to operate your “business.” This hole in the legislation is large enough for the criminal element or the even the mildly dishonest to drive a truck through to load up the cash from unsuspecting and well-meaning donors as they have done over the past several decades of hands-off government and deregulation of the private sector under Stephen Harper while the police and the CRA generally turn a blind eye to this form of corporate crime. Tax evasion gets the same response. Charities large and small regularly misrepresent themselves and receive willing donations from a vulnerable public with little or no accountability by the organization or its operators. Donors are becoming inured to the constant appeals for money and as a result legitimate causes suffer financially. Charitable giving is based largely on trust and once this trust is broken all will suffer whether good or bad.
In Canada as in other countries, this fraudulent practice of shilling for dollars is almost strictly targeted at the working public for the most part since they regularly give the lion’s share of money to charitable causes according to Statistics Canada while corporate giving is miniscule when compared to their after-tax profits. Corporations only give to gain tax deductions, not through any corporate moral compassion in the company. The wealthiest are equally stingy in their contributions statistically while taking the majority of the media and public credit for their efforts at galas and other such events.
Charitable fund-raising has exploded over the last several decades and morphed into a massive, thriving and corrupt industry that has changed from local charitable appeals into huge corporate campaigns that are everywhere today. The public is currently assaulted daily by a deluge of charitable appeals that ask us to give, give, give. While there are charities that are honest, the blizzard of questionable charitable causes now appealing for the public’s attention and dollars is overwhelming and it is virtually impossible to separate the wheat from the chaff. Governments offer little assistance in this process as supporters of any business. They do little or nothing to intervene and regulate the industry. Governments generally ignore businesses and allow them to self-regulate which is like letting the foxes run the hen house. This approach is called being ‘open for business.’
These campaigns have become big-business where enterprising ‘entrepreneurs’ can set up shop in a few weeks or months and begin working the emotional heartstrings of the public at large to extract millions in donations with little or no accountability over how the money is spent or distributed and with little overhead to do it. Even major and respectable charitable fundraisers like charitable lotteries are largely run by slick corporate fundraising companies that make a handsome profit from the business while giving miniscule amounts back to the charities in question that have retained their services. This is the worst form of corporate predation that exploits people’s most basic instincts of good-will and emotions to defraud them of their hard-earned money whether the operation is legal or not. The illusion is created that all the donors’ money will be spent curing diseases, helping sick or abandoned children or rescuing abused animals etc. while nothing could be further from the truth – those operating the charities are often found to be channelling most or all of the funds for their own purposes whether business or personal. Despite this, there has been little government or CRA oversight of this industry or a full investigation by any government or law enforcement agency of how much money is raised by the industry in total, how it is used and how much is directed to the charities and causes in question. Equally there are no stringent forensic accounting random audits of these organizations to monitor their activities. Corporate fraud is not on their radar screens. In too many cases it is simply legalized fraud as the Star’s editorial indicates.
The final insult is that the charges are ironically defended in court using the same ill-gotten funds donated to the charity. The entire charitable fundraising industry and charitable giving is a well-orchestrated sham and needs a major overhaul including a widespread criminal investigation to weed out the predators. Governments should also set mandatory requirements on charities to ensure the majority of the money raised goes to the charity in question. It is not enough to out the offenders – they must be prosecuted as well. In Canada, charitable giving is definitely a case of buyer-beware.