This page explains which government departments look into different types of complaints against nonprofits, and how to avoid problems. Whether you are the director, a member, or a potential donor of an Ontario nonprofit this information could be helpful to you.
If you believe a nonprofit is misusing charitable property, then you can contact the Office of the Public Guardian and Trustee.
If you believe a nonprofit is breaking tax laws, for example, by hiding business revenue, then you can contact the Canada Revenue Agency (CRA) through its Informant Leads Program.
This might include situations like:
- The directors aren’t holding meetings of members when they should.
- The directors weren’t elected according to the required procedure.
- The directors are refusing to step down when their term is over.
- Members aren’t being allowed to see financial statements.
- Someone is taking actions that aren’t allowed under the by-laws.
The Office of the Public Guardian and Trustee recommends that you first check whether your nonprofit’s bylaws or constitution set out steps you can take in the situation.
If your bylaws do not say what must be done in such a situation, you can remove a director with a simple majority vote. This means that more than half of your members who vote at a general or special members meeting agree to remove a director.
But if your bylaws, before November 14, 2017 said you need a two-thirds majority vote to remove a director, then you have to follow them until you change your bylaws.
Whatever your bylaws say, you always have to tell your members when you give them notice of the meeting that they will be voting to remove a director. If you do not, the vote may not be valid.
If you have tried those steps and it didn’t help, you may need to speak to a lawyer.
The FAQ “How can I complain about a Canadian charity?” explains the steps you can take to complain about a charity. (Scroll down to the 9th question)
For a step-by-step approach on how to deal with a difficult director, see the article That director is such a pain: how do we get rid of him? (scroll down to p.5).
Note: This article is helpful, but one part of it is out of date. The article says that members can remove a director only if two-thirds of members who vote, agree to it. This is still true in some cases, but it only applies if your bylaws say that. If your bylaws don’t say anything, you only need more than half of the members who vote to agree to it.
This guide offers helpful tips on how to handle a Canada Revenue Agency (CRA) audit.
This checklist may help charities manage the legal risk. These resources developed by the Office of the Public Guardian and Trustee and CRA and presented at Carters events may also help charities prevent compliance problems and respond to audits.