Transparency vs. Anonymity

The calls for greater transparency by charities in Canada is growing. Budget 2022 had a few promises of more reporting requirements for registered charities related to donor advised funds and disbursement quota, although the exact measures are still unclear. What does this mean for the charitable tradition of anonymous giving?

Anonymity

The great Spanish Jewish medieval philosopher Maimonides famously said that the highest form of charity is anonymous. It’s about the gift, the community, and the cause, not the donor. This is a belief held by most religions and fundamental part of the private-public nature of charity. Donor recognition is a secular invention, even if it has historical precedent.

In Canada, charities are legally able to keep the identity of donors private, despite being tax exempt and subsidized through the tax receipted donations. There is no mandatory disclosure of donors to regulators.  The registered charity information return only requires the disclosure of the number of foreign donations over $10,000, but not donor names.

Donor recognition

Donor recognition is a different space, although it is voluntary for both charity or donor. Many larger charities, especially universities, have a naming approval process but this is internal. Some provinces, following the lead of British Columbia, have legislation that require government approval of donor recognition attached to publicly funded buildings. The intention is to ensure donor reputations are scrutinized in advance of signs being erected.

I don’t know of a charity that doesn’t respect a donor’s wish for public anonymity. The rare donor even asks for anonymity within the charity itself, which can be difficult to manage if the board is excluded.

Political Influence

In the U.S. there is discussion about “dark money”, but the context is political donors, especially to PACs or “political action committees”. Charitable donations are rarely the focus of these concerns but are not exempt. In Alberta, the Allan “Anti-Alberta” Inquiry focused on foreign funding to Canadian environmental charities. Nefarious foreign funds are a political dog whistle at both ends of the political spectrum.

Budget 2022 introduced source of funds reporting requirement to FINTRAC for $10,000 contributions to crowd raising campaigns. This was in reaction to the so called “freedom convoy.” Interestingly, most (but not all) registered charities do not require major donors to provide proof of identity or source of funds. This makes sense if we can depend on charities to control use of funds after a donation is made. I would hazard a guess that FINTRAC is more likely than CRA to require charities to report donors and donations in the future.

Estate Donors

Estate donors are perhaps the least and most anonymous donors. A gift by will often becomes public through the courts – for those who care to look – when a will is probated. But even large bequests are handled by most charities with minimum fuss and donor recognition. The estate administration process is dry and legal; few estate donors request recognition in their wills; and dead people don’t interfere. I’d say the spirit of Maimonides is most often found in estate donations.