Malvern charity loses status

A Scarborough charity is exploring ways to keep its programs running under new organization after having its charitable registration revoked.

Malvern Rouge Valley Youth Services (MRVYS) lost its charitable status Nov. 12 after notice from the Canadian Revenue Agency (CRA).

“In effect, MRVYS was revoked due to its past…participation in a tax shelter program under a previous board and leadership team,” said Phillip Fearon, executive director at MRVYS.

He said the organization, located at 1275 Morningside Ave., understood the reason for the CRA’s decision.

According to media reports, the CRA stated, among other reasons, that the charity was part of a tax shelter arrangement that gave donors a tax credit that was larger than the amount of money than they actually donated.

A tax shelter promoter allowed people who donated to the charity to also donate computer software. Reports identify the promoter as the Global Learning Gift Initiative. The organization did not return requests for comment.

According to the CRA, charities lose their status if they engage in deals that “result in more than an incidental or proportionate private benefit.” Essentially, if donors benefit at a higher rate than the public, the CRA’s ears prick up.

According to the Toronto Star, a CRA audit found that the Malvern charity’s donations skyrocketed from $13,000 in 2008 to $112 million in 2009. The charity raised $87 million last year.

MRVYS declined to elaborate on its plans, stating it would make them available as soon as they were formalized.

The charity runs programs, including computer training, Microsoft Office training and after-school programs to develop young leaders “in a loving environment at an affordable cost.”

About this article

By: Natalie Sequeira
Posted: Nov 17 2011 10:06 pm
Filed under: News