Donations from Canada/Outside the US

This thread is organized to answer the following question about donations from an organization in Canada to an organization based in the U.S. posted in 2015:

→Inquirer: I am a new member of this group. I run a one-year-old 501c3, Usher 1F Collaborative, http://usher1f.org. We are working to raise funds for research for a cure for Usher Syndrome Type 1F. Usher Syndrome is the leading cause of deaf-blindness, and Type 1F refers to our specific genetic mutation, which runs in those of Ashkenazi Jewish descent.’’

I have a question that I am hoping someone has dealt with and has a suggestion for us. We have promised to us a $10,000 donation from a Canadian foundation. However, they cannot donate directly to us without jeopardizing their Canadian tax exempt status. We looked into having them donate directly to one of the two U.S. researchers, who are the only ones in the world working on our mutation, but neither of their universities is on the Canadian government approved list, which is dependent upon the number of Canadian students who attend the university. Thus, we are looking for an intermediary who can accept the funds and transfer them either to our foundation or directly to the researchers. We do not care whether the funds go through us or directly to the researchers as long as they get there. Does anyone know of a way to accept Canadian donations? We thought about setting up a parallel foundation in Canada, but we would be in the same boat as we could not donate those funds to a U.S. researcher.’’

→Responder 1 replied:

I wonder if the Canadian Organization for Rare Disorders might be of some help with this situation? http://www.raredisorders.ca/

→Responder 2 replied:

Generally, CORD, like any foundation has a problem being a passthrough.

Canada is very strict about this – we have had a couple of hundred thousand dollars sitting there for a couple of years.

We could only accept money once we had an affiliation with an approved Canadian University and they were doing actual research – because they would not do a pass-through either.

Responder 1: Wow, what a terrible catch-22! But I wasn't thinking CORD could act as a pass-through, but rather that it - or perhaps one of it's affiliated organizations - might be able to offer some guidance or experience.

Keep looking for people to ask about this, Melissa - and if they don't know/don't have an answer, ask them who else you might contact. If there's one thing rare disease organizations are good at, it's *finding a way, one way or another.*

Good luck, and please keep us posted on what you learn

→Responder 3 replied:

The Canadian donation could be an opportunity to collaborate with a Canadian university lab to pay for a post-doc to do science on your syndrome...

We're doing something similar with (University of) Penn Medicine's Orphan Disease Center. We're fundraising, they're 1:1 matching, and doing the logistics to grant funds to a researcher, for research directed by our RASopathy advocacy network partners. (Anyone interested in donating to the Million Dollar Bike Ride? Here's the link to our page - http://www.milliondollarbikeride.org/team/rasopathies-network/ -- The ride is this Saturday)

→Responder 4 replied:

We have run into similar issues in two ways. We have a Canadian foundation that wants to give us money, but they cannot write a check to us in the US. Thankfully, we have a formal Canadian Affiliate who accepts the donation and uses it for services within Canada.

Our Affiliates support our centralized research grant program. For our Canadian Affiliate, they must first check if the organization is on the list of “qualified donees.” If the organization is not on the list, they cannot fund the research. I asked my contact in Canada about this and she said, “I have looked and spoken with our auditor about this, and unfortunately there are no exemptions or exceptions.” Inquirer: Do you know if there is a list of qualified donees other than US universities?

→Responder 5 replied:

I am curious, has anyone ever funded a Canadian student or post-doc to travel to the US for training in a US lab?

That wouldn’t help your US researchers fund their staff, but it might help them build capacity in other ways.

→Responder 6 replied:

While I am by no means an expert on this, my foundation (us based) works with a Canadian affiliate to find research. We write a contract for each project explaining are cofunding and the Canadian foundation then wires us the funds to be used towards the execution of the project. We have worked together to find projects in Canada as well as the U.S.

→Responder 7 replied:

Can someone point us to the regulations that drive the “what’s raised in Canada stays in Canada” restriction. I'd like to learn the details .. is it only tax deductible donations, is it a constraint on all funds from a Canadian charity or just certain funds, how do the bylaws and mission of the charity affect their funding ability, what is the definition of a cross-border partner/collaboration, is it just a research restriction or does it cover awareness and education, etc. And if the answer is essentially a blanket “nothing leaves” - then how can we support our Canadian friends to change their policy and regulations - or is there a proverbial third rail here that no one wants to touch (and why)? It’s a new interconnect world where we all must strive to work together no matter the colors on the flag.

I could imagine the Canadian Parliament wanting to keep all of the charity funds in Canada to bolster their economy and research, but it is also a bit short sighted to think that they can’t or shouldn’t aggressively support research in their 10x the size southern neighbor or the rest of the world for that matter.

In the US, we are allowed to fund worthwhile research and other projects in any country as long as it is consistent with our mission. We must be public benefit to gain a US 501c3 tax exempt status, and so we are always mindful that what we do must have some benefit for US families … but for right now, for example, all three of the MLD clinical trials are in Europe and most of the basic science work that needs funding is in Europe. Our support of that work will bring benefit to US families.

→Responder 8 replied:

We have literally JUST undergone the process of supporting the incorporation of what will become an “affiliate” of the Preeclampsia Foundation in Canada so these questions are fresh in our minds. Canada does not completely restrict the use of funds outside of Canada, but does place some fairly reasonable (IMHO) restrictions so that our fundraising efforts in Canada don’t only flow outside the country. They have somewhere in the neighborhood of 500 authorized 3rd party entities (e.g., academic institutions, other non profit organizations) outside of Canada that can accept grants and donations from Canadian organizations. In addition, a Canadian charity can “hire” a non-Canadian vendor to help them accomplish their mission. That could be a US charity providing technical assistance, for instance. They would look unfavorably to ALL the money leaving the country.

The regulations are all out of CRA and are pretty clear on this point. Where I believe they get ridiculous is that they don’t consider the distribution of printed or other multi-media materials on a health issue an adequate education strategy. And forget “awareness” - does not register as a mission area. I.e., they are very old school in terms of how public education happens around a health issue: organize a patient symposium, bring in didactic speakers, etc. I wouldn’t dream of suggesting a social media campaign, for instance!

I like some of the creative approaches suggested by Sharon to expand the leverage of Canadian funds.

In my next life – or when I finally figure out how to replicate hours in a day! - I would love to partner on how to make our efforts far more seamless for globalized research and education. The borders are increasingly irrelevant. I actually had a donor ask me recently if research discoveries made in other countries would be known and/or used here in the US or if countries are proprietary about their findings.