Humane Society Of Canada Fights To Keep Tax-Free Status After Shady Ex

After the Canadian government’s decision to shut down the charity, we’re reminded we need to take a closer look at the causes we donate to, and ask why donors weren’t warned in the years leading up to the verdict.


I have a few “hot button” words when it comes to charities. When I hear “Children, Animals, Shelter, Abandoned, Protection, Humane” your head would spin at how quickly I can whip out my credit card or check book.


My sense is that many people are the same way. We all want to help those in distress and to feel that we’ve done our part to help make the world just a little bit better for those less fortunate. And that’s why the investigation that is taking place right now is so disturbing.


Imagine what $9 million in the hands of a reputable charity could accomplish. Lots, right? Well, those accomplishments never happened in the case of one self-proclaimed charitable organization run by a Michael O’Sullivan. Instead, an investigation by the Toronto Star newspaper uncovered evidence that donations were spent on personal trips, booze, lingerie and a whopping $27,000 on super-hero comic books (O’Sullivan’s lawyer claims the comic books were an “investment.”)


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It appears O’Sullivan, the executive director and CEO of the Humane Society of Canada for the Protection of Animals and the Environment (not to be confused with the Toronto Humane Society) has successfully evaded Canada’s tax watchdog for the past 23 years. A federal audit revealed “serious and intentional” spending breaches that have the tax agency trying to close down the charity as well as O’Sullivan’s Ark Angel Fund, the Ark Angel Foundation and the Humane Society Foundation. According to statements from O’Sullivan’s lawyer, some of the problems raised by federal auditors are the result of a “bookkeeping error.”


And this is where hard-working philanthropists like me get really upset. The government’s charity regulator — which first spotted Humane Society of Canada spending infractions almost 20 years ago — has never flagged the charity’s ongoing tax troubles to the Canadian public. The federal Charities Directorate has a policy of not alerting the public about an organization’s tax troubles until its status is officially revoked. The outcome being that we poor saps may have continued to finance this guy’s lavish lifestyle. While I realize their intent is to not slander worthy organizations that may have had a blip in their accounts, at what year do you say “this can’t continue and is a serious breach of the public trust”? After 5years, ten years?


While the Canada Revenue Agency (CRA) notified O’Sullivan it was planning to revoke his organization’s charitable status based on audit findings back in 2010, he has kept the issue in play by mounting appeal after appeal after appeal. It now sits with the Supreme Court of Canada, after three Federal Court of Appeal judges unanimously agreed to shut him down.


Here is the final kick in the teeth for us do-gooders. While this guy continues to fight in the courts, his charity remains in business and continues to collect donations and issue official tax receipts. His website also asks donors to consider making the Humane Society of Canada the executor as well as beneficiary of their wills.


And during these years of taxation turmoil, how have your donations to help those less fortunate been deployed? Apparently O’Sullivan has placed his legal woes ahead of abandoned and homeless animals with the bulk of the funds going to his lawyers’ fees. According to its 2014 tax return, one of his four charities spent $157,000 on legal fees and only $50 on “animal welfare.” In 2013, it spent $181,251 on legal and accounting fees, and $140 on “animal welfare.”


Disturbing – yes. But let’s not allow one man who has found a way to work the system, discourage us from continuing to help when the need is real. The lesson learned here is to always check out a charity before writing that check. Do your homework. Both Canadian and U.S. governments maintain a list of accredited charities which is the first place to start. While some organizations do find a way to beat that system, a good place to start is with a Google search to see what is being said about a particular charity and if their activities have prompted any investigations. And visit sites like Charity Navigator and GuideStar Charity Check who will give you a lot more behind-the-scenes info including financials and transparency rankings. Who knows, a little legwork on behalf of donors might have ensured the above $9 million went to the cause they actually intended.


[Source: Toronto Star]

Mary Simpson
Mary Simpson

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