Social Media is increasingly being used by Canadian registered charities for a number of different purposes including advancing programs, marketing and fundraising. Most regulation of charities occurred prior to the advent of social media, however, registered charities that use social media are expected to be aware of and comply with legal requirements whether in the realm of social media or otherwise. Social media’s ease of use and decentralized nature can result in mission drift and confusion over the charity's priorities, incorrect or inappropriate information being disseminated widely, and alienation of stakeholders. Is that charity employee on Twitter representing his/her own views or that of the charity? As with any new technology there are risks that registered charities need to be aware of and plan for to make social media an important and positive contribution to their charitable work. Attendees Will Walk Away With: • An understanding of the rules that apply to charities who use social media. • An awareness of the rewards as well as the pitfalls and risks of engaging with social media. • The know-how required to reasonably minimize the mistakes made with social media, alienation of stakeholders, and embarrassment for a charity. Mark Blumberg Mark is a partner at the law firm of Blumberg Segal LLP in Toronto and works primarily in the areas of non-profit and charity law. He is also the editor of www.globalphilanthropy.ca – a Canadian website dedicated to legal, ethical and risk management issues for Canadian charities.

1. Charity Law Information Program (CLIP)
Social Media, Charity Compliance
and Risk Management
Mark Blumberg (mark@blumbergs.ca)
www.canadiancharitylaw.ca
www.twitter.com/canadiancharity

2. Introduction
• Legal information not legal advice
• Views expressed are my own
• Questions during and at end
• Logistics and timing
2

3. Overview
• Registered charities that use social media are expected to be
aware of and comply with legal requirements whether in the
realm of social media or otherwise.
• Social media is very flexible, inexpensive, instantaneous and
personal way to interact with stakeholders and others.
• Ease of use and decentralized nature can result in mission
drift and confusion over the charity's priorities, incorrect or
inappropriate information being disseminated widely, and
depreciation of goodwill and alienation of stakeholders.
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4. Overview (cont)
• Organizations wanting to apply for charitable status may
have greater difficulty if their social networking content is
inappropriate
• Registered charities with inappropriate social media content
are potentially more likely to be audited
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5. Definitions
Legal – binding minimum rules and regulations
Ethical – higher standard than legal – ‘applied ethics’ – trying to
achieve moral and ethical outcomes in real-life situations
consistent with our values and standards.
Risk management - identification, assessment, and prioritization
of risk (loss or adverse event) followed by coordinated and
economical application of resources to minimize, monitor, and
control the probability and/or impact of unfortunate events.
5 (Wikipedia)

6. Voluntary Sector in Canada
• 161,000 non-profits in 2003 (federal and provincial and
unincorporated)
• 85,250 Registered Charities (as of 2010)
• $180 Billion in revenue, 2.4 million on payroll
• 2/3 have revenue under $100,000
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7. Variety of Charities
Every charity is different:
• Objects
• Areas of charitable work
• Risk tolerance
• Public profile
• Donors and level of government support
• Independent vs. affiliated
• Resources
• Values and knowledge
• Local vs. international activities
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8. What is a Registered Charity?
1) Purposes must be exclusively and legally Charitable
(4 heads of charity – relief of poverty, advancement of
education; advancement of religion; and other purposes
beneficial to the community in a way the law regards as
charitable)
2) Must be established for the benefit of the public or a
sufficient segment of the public (Public Benefit)
3) Apply to Charities Directorate of CRA for registered
charity status and be accepted. (Registered)
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9. Maintaining Charitable Status
• Conduct allowable charitable activities and avoid prohibited activities
• Keep adequate books and records
• Properly issue official donation receipts
• Meet annual spending requirement (disbursement quota)
• File T3010 Registered Charity Information Return
• Maintain status as a legal entity
• Inform CRA of certain changes
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10. Social Media
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11. Social Media/Web2.0
• Blogging – e.g. globalphilanthropy.ca
• Micro Blogging - Twitter
• LinkedIn
• Facebook
• RSS
• Video sharing (YouTube)
• Wikis – Wikipedia
• VOIP – Skype
• Instant Messaging – MSN
• Podcasts
• Webinars – online web meetings
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12. Why Social Media?
“The enemy is engaged in this battlespace and
you must engage there as well”
US Airforce
http://www.af.mil/shared/media/document/AFD-090406-036.pdf
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13. Why Social Media?
• Raising profile of charity
• Communications (especially at difficult times)
• Programming
• Advocacy
• Governance and Administration
• Volunteer recruitment
• Raising money (Fundraising)
• Networking
• Inexpensive
• Dialogue with stakeholders
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14. Return on Investment (ROI)
• Biggest challenge
• How much is it costing you?
• Can you do it cheaper and more effectively?
• Is social media promoting mission or just fad/personal
empire building?
• What are goals? How does this fit in with charity’s strategic
plan?
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15. Use of Social Media at Work
• Can become addiction
• Can detract from work
• Can affect work life balance
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16. Planning is an unnatural process; it is much more fun to do
something. The nicest thing about not planning is that
failure comes as a complete surprise, rather than being
preceded by a period of worry and depression.
- Sir John Harvey
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17. Reputation Management
• Reputation for many charities is most valuable asset
• Reputations take a long time to build, but can be destroyed
quite quickly
• Social media can help or hurt
• Don’t ignore Web 1.0 (websites, e-newsletters)
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18. Policies on Social Media Use
• If everyone had common sense, understood technology and
the needs of all stakeholders probably would not need
policies.
• Here are some examples of policies:
http://socialmediagovernance.com/policies.php
http://laurelpapworth.com/enterprise-list-of-40-social-media-staff-guidelines/
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19. Ownership and Control of Accounts
• Employee/independent contractor or charity
• Social media channels can be valuable
• Upfront investment in promoting site can be substantial
• Much of following may come from charity’s goodwill
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20. Political Activities and Registered Charities
“A registered charity may pursue political activities to
retain, oppose, or change the law, policy, or decision of any
level of government inside or outside Canada provided the
activities are non-partisan, related to its charitable
purposes, and limited in extent.” (see T3010B)
• Social media used extensively in politics – be careful about
line between personal views and that of the registered
charity; amount of resources devoted to political; and
impression given by social media to the public.
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21. Political Activities
• Cannot have political purpose (object); only political activities
• No illegal or partisan political activities
• Political activities must be “connected and subordinate” to
purpose (legal objects)
• Comply with “10% rule” and disbursement quota restrictions
(political work not charitable and only if DQ room)
• Informative, accurate, and well-reasoned (not false,
inaccurate, or misleading)
• Read CRA Policy Statement on Political Activities (CPS-022)
(http://www.cra-arc.gc.ca/tax/charities/policy/cps/cps-022-e.html)
• Upholding Human Rights and Charitable Registration
– http://www.cra-arc.gc.ca/tx/chrts/plcy/cgd/hmn-rghts-eng.html
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22. An Activity can be…
• Prohibited (illegal and/or partisan political)
• Allowable Political
• Charitable:
- Public awareness campaigns
- Communicating with an elected representative or
public official
- Education
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23. Social media and political activities
• Be aware of rules
• Make sure everyone involved with posting or moderating
knows rules.
• Be careful, especially at times of heightened political
interest, like elections.
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24. CRA Fundraising Guidance
• Fundraising is important for charities but it is not a
charitable activity
• Lots of media and donor concern about costs and practices
• CRA Guidance on Fundraising
http://www.cra-arc.gc.ca/tx/chrts/plcy/cps/cps-028-eng.html
• Social media may fall into low cost
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25. CRA Guidance for Fundraising
• Prohibited fundraising conduct (illegal, main purpose, too
much private benefit, misleading or deceptive)
• Disclosure and transparency
• Apportioning expenses between fundraising and charitable
• Best practices
• Indicators of concern
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26. Indicators of Concern
• Sole-source fundraising contracts
• Non-arm's length fundraising contracts
• Fundraising initiatives that are not well-documented
• Fundraising merchandise purchases that are not at arm's
length, not at fair market value, or not purchased to
increase fundraising revenue.
• Most of the gross revenues for non-charitable parties.
• Commission-based fundraiser remuneration
• Misrepresentations in fundraising solicitations or in
disclosures about fundraising or financial performance.
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27. CRA Guidance on Fundraising
Best Practices
a. Prudent planning processes
b. Appropriate procurement processes
c. Good staffing processes
d. Ongoing management and supervision of fundraising
practice
e. Adequate evaluation processes
f. Use made of volunteer time and volunteered services or
resources
g. Disclosure of fundraising costs, revenues, and practice
(including cause-related or social marketing arrangements)
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28. Fundraising Ratio of Costs to Revenues
Ratio of Costs to Revenues over
Fiscal Period CRA Approach (Cost to Revenue)
• Under 35% • Unlikely to generate questions or concerns.
• 35% and Above • The CRA will examine the average ratio over recent
years to determine if there is a trend of high
fundraising costs. The higher the ratio, the more
likely it is that there will be concerns and a need for
a more detailed assessment of expenditures.
• Above 70%
• This level will raise concerns with the CRA. The
charity must be able to provide an explanation and
rationale for this level of expenditure to show that it
is in compliance; otherwise, it will not be acceptable.
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29. Fundraising Guidance
• fair, truthful, accurate, and complete disclosure on social
media
• If need more space link to website
• Low cost of social media fundraising can work well with
fundraising guidance
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30. Receipting and Social Media
• Do not issue receipt when:
– Donation of services to charity – volunteer doing social media
– Donation is intended for another organization that is not a registered
charity
– Cannot determine the name of the true donor
• Make sure you have collected all information to
appropriately issue receipt.
• Twenty free archived webinars on charity law including one
on charity receipting http://www.capacitybuilders.ca/clip/clip.php
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31. Sample Official Donation Receipts
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32. Split Receipting
• New legislative idea – from 2002
• Pre-2002 – if donor received any advantage, then no receipt
• Now donors can receive some advantage eg. concerts, golf
tournament, gala dinners, etc.
• Charity must determine the eligible amount of that gift for
receipting purposes in order to issue an official donation
receipt
• http://www.cra-arc.gc.ca/E/pub/tp/itnews-26/itnews-26-
e.pdf
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33. Don’t “Lend your registration”
Caution: Lending registration numbers
Under no circumstances should a registered charity lend its
registration number to another organization for receipting
purposes. A registered charity is responsible for all tax
receipts issued under its name and number and must
account for the corresponding donations on its annual
information return. A charity that lends its registration
number risks losing its charitable registration.
http://www.cra-arc.gc.ca/tx/chrts/prtng/menu-eng.html
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34. Acting Outside Legal Objects
Charities in Canada have legal objects in their founding
documents (eg. Letters Patent, Trust deed etc)
Charities must not act outside of these legal objects.
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35. Non-Charitable Activities
A registered charity must devote its resources (funds,
personnel, and property) to charitable activities (the work
that advances the charitable purposes).
Certain non-charitable activities are allowed within limits
like administration, fundraising, related business, social and
political.
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36. Social Media and easier collaboration
• Registered charities increasingly working with parties that
are not registered charities
• Social media will increase this trend
• Is organization qualified donee or not?
• If not qualified donee be careful to follow rules about
transfers of resources to non-qualified donees.
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37. Avoid Gifts to Non-Qualified Donees
Charities conduct activities in two ways:
1. By gifting to “qualified donees”; or
2. By carrying on its own charitable activities.
Charities cannot gift to a non-qualified donee or be a
“conduit”. (Gifts to non-qualified donees = 105% penalty on
the amount of the gift and second infraction 110% penalty
and greater chance of revocation.)
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Need “direction and control” over funds and resources.

38. Canadian Registered Charity
“Own Activities”
[Direction and Control]
Structured
Arrangement -
Qualified Donee, eg. Written agreement
Canadian registered Employee
Charity, UN, prescribed Intermediary –
Volunteer
University, Canadian agency, JV,
Municipality, etc partner,
contractor
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39. “Own Activities” or “Direction And Control”
When not working with qualified donee or own staff need to
have:
• Due Diligence of Intermediary (investigate)
• Written agreement
• Detailed description of activities
• Monitoring and Supervision
• Ongoing Instruction for changes
• Periodic Transfers
• Separate Activities and Funds
• Books and Records showing above
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40. Charity Scams
• Charity scams, fraudsters and criminals in cyberspace
• Be careful who your “friends” are.
• Be careful who you “like”
• Your reputation is valuable
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41. Charity Gifting Tax Shelters
• People can donate to registered charities in Canada and get
an official donation receipt which is very valuable and can
cost the tax system a lot. Promoters and “charities” cannot,
through various games and tricks, abuse the tax system to
issue whatever receipt they wish.
• Usually “investor” or “donor” is told that the tax benefits
and deductions arising from the scheme will equal or exceed
the costs of entering into the arrangement or the property.
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42. Avoiding Abusive Charity Gifting Tax Shelters
• Over $5 billion in gifting tax shelters over last 6 years
• Over 175,000 Canadians being audited
• If it sounds too good to be true, it probably is
• Be careful of advice from people who have a financial benefit in the
transaction
• Keep charity far from these schemes
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43. Employment Issues
• Is person doing social media a unpaid volunteer, employee
vs. independent contractor - see CRA publication Employee
or Self-employed?: http://www.cra-arc.gc.ca/E/pub/tg/rc4110/
• Withholding source deductions (CPP, EI, Income Tax)
• Remitting source deductions
• Proper employment agreements
• Excessive compensation / private benefit
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44. Unrelated Business Activities
Income Tax Act prohibits “unrelated business activities” by
all charities
Charitable organizations and public foundations are
permitted to engage in “related business activities” but
private foundations may not engage in any business activity
“Carrying on business” - activity is commercial in nature
(derive revenue and provisions of goods and services,
intention to earn profit) and continuous
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45. What is a Related Business?
There are two kinds of related businesses that a registered
charity can conduct:
1. Businesses that are linked to a charity’s purpose and
subordinate to that purpose (for example, a hospital
parking lot, church gift shop); and
2. Businesses that are run substantially (90%) by volunteers
(for example, coffee shop run by volunteers).
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46. Privacy Issues/Confidential Info
• Legal issues – Personal Information Protection and
Electronic Documents Act (Pipeda)(Federal)
• Also other countries, provinces etc.
• Standards and ethics
46

47. Common Privacy Mistakes
• To: CC: BCC:
• Reply vs. Reply all
• Storing confidential information on laptops, USB sticks
• Forwarding a long string of e-mails
• E-mail/Twitter/Facebook direct messages to wrong person
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48. Monitoring Employee Use
• Are they aware?
• Is their reasonable expectation of privacy?
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49. Intellectual Property
• Ownership of work by employees
• Ownership of work by independent contractors
• Ownership of posts by third parties
• Copyright/TMs of others
• Branding policies and standards
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50. Who “owns” social media product?
• Personal blog done on own time?
• Charity Facebook page?
• Twitter account?
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51. E-Volunteering Opportunities
• Social media can take advantage of volunteers who are
dispersed, have busy schedules etc.
• “Crowdsourcing refers to the act of delegating a task to a
large diffuse group, usually without monetary
compensation. The basic idea has to do with harvesting and
harnessing creativity, knowledge, labor, resources and
money from the masses in a collaborative effort. It is about
using the crowd to do things better, faster and cheaper.
Internet companies such as eBay, MySpace and Wikipedia
are just a few that have crowdsourcing business models”
• http://mycharityconnects.org/web2_0glossary
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52. Manage Volunteer Risks
• Have policies
• Have volunteer coordinator
• Do basic risk management
• Have applications and volunteer contract
• Proper orientation and training
• Proper monitoring
• See my article “Managing Risk with Volunteers in Canadian
Charities”
• http://www.capacitybuilders.ca/files/resources/Managing_Risk_with_Volunteers_1256066635.pdf
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53. Prepare for mishaps
• Mistaken or inappropriate comment
• Hacker takes over social media account
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54. Prepare for criticism
• Negative comments can be opportunity – let managers
know
• Are social media comments moderated?
• Are comments constructive? If not then remove them.
“Remember, we encourage you to comment on this blog. All viewpoints are
welcome, but please be constructive. We reserve the right to make editorial
decisions regarding submitted comments, including but not limited to
removal of comments. The comments are moderated, so you may have to
be a tiny bit patient in waiting to see them. We will review and post them as
promptly as possible during regular business hours (Monday through Friday,
8:30 - 5:30).” Red Cross
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55. Monitor
• Use GoogleAlerts
• Google searches
• SocialMention (SocialMention.com)
• Have people watching social media.
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56. Social Media and Governance
• Communication
• To do lists
• Shared calendars
• Virtual meetings
• Electronic voting?
• Increased transparency
• Collaboration
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57. Metrics
• Beware of deceptive metrics
• “hits”
• Google Analytics – free and easy to use.
• Metrics are important part of evaluation
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58. Social Media is global
• Social media travels beyond borders
• Beware of non-Canadian sensibilities and law
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59. Social media and security
• Security of personal information
• Security of credit card information
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60. Social Media Policy Issues
• Do you have authority to speak on behalf of your charity?
• Do you identify if you are writing about your charity that
you work for the charity?
• Do you inform your manager of your social media work?
• Do not share confidential, embargoed or proprietary
information.
• Use of name and trade marks on private blog
• Is it allowed for an employee to be actively promoting
another charity during or after work, that is competitive
with your charity?
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61. Social Media Policy Issues
• Are you committing charity to any initiative or restrictions
that could be problematic?
• Respect charity time and property
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62. Some ideas
• Respect privacy
• Try to be accurate
• Be respectful in posts
• Respect rules of venue
• Respect copyright, trademark
• Think twice before posting
• Everything posted may last forever (persistent or
permanent)
• If in doubt do not post
• Can post be taken out of context? Is 140 characters enough
to express matter? Otherwise refer to article
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63. Avoid
• Discriminatory comments
• Partisan political comments
• Vulgar or abusive language
• Personal attacks
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64. Disclaimers
• The views expressed on this website/weblog are mine alone
and do not necessarily reflect the views of my employer.
or
• "The postings are my own and do not necessarily represent
_____ positions, strategies or opinions.“
• Perhaps with some senior leadership difficult to have
“personal” views.
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65. Physical Security
11) Keep security in mind
Be particularly careful with what you are discussing online if you are in an
operational context. Please make sure that you have read and follow your
delegation's security requirements. Never talk about routes or times of
planned convoys or distribution of goods. If in doubt, talk to the security
unit or a security delegate. Never post personal details such the home
addresses of yourself or colleagues. Bear in mind that personal details of
local staff members can be very security sensitive in many operational areas
– this includes their names and pictures. To guard against burglaries, do not
post information on when you are travelling or away from your duty post.
http://sm4good.com/wp-content/uploads/2009/11/Red-Cross-Red-Crescent-SocialMedia-Guidelines.pdf
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66. Capacity Builders
• Capacity Builders is a division of the Ontario Community
Support Association (OCSA) and it runs the Charity Law
Information Program (CLIP)
• CLIP provides training, workshops, and webinars to
Canadian charities to enhance their understanding of their
legal, ethical, and governance obligations
• http://www.capacitybuilders.ca/clip
• CLIP Communiqué – sign up for free
• (416) 256 – 3010 x 232 or 1-877-484-3030
• clip@capacitybuilders.ca
• The Charities Directorate of CRA has provided funding for
CLIP
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67. Charities Directorate of CRA
• Regulates registered charities
• Based in Ottawa
• Website: www.cra.gc.ca/charities
• E-mail list: www.cra-arc.gc.ca/esrvc-srvce/mllist/sbscrbchrts-
eng.html
• Webinars: www.cra-arc.gc.ca/tx/cmmnctn/sssns/wbnrs-eng.html
• Telephone: 1-800-267-2384 (English)
1-888-892-5667 (Bilingual)
• Through CPOP supporting registered charities conducting
educational work on legal and Income Tax Act compliance issues.
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68. Blumberg Segal LLP
• Blumberg Segal LLP is a law firm based in Toronto, Ontario
• Mark Blumberg is a partner at Blumbergs who focuses on non-profit
and charity law
• Assists charities from across Canada with Canadian and international
operations and foreign charities fundraising here
• www.canadiancharitylaw.ca and www.globalphilanthropy.ca
• Free Canadian Charity Law Newsletter. Sign up at:
http://www.canadiancharitylaw.ca/index/php/pages/subscribe
• (416) 361 – 1982 or 1-866-961-1982
• mark@blumbergs.ca
• Twitter http://twitter.com/canadiancharity
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