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Thread: 8. POLICY DISCUSSION - Canada Revenue Agency NFP (Not For Profit Regulations)

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    Default 8. POLICY DISCUSSION - Canada Revenue Agency NFP (Not For Profit Regulations)

    Here is the background for new Governors who are approaching this for the first time.

    More than a year ago the Executive were informed of new federal regulations coming into effect in October 2014 concerning federal recognition of Not For Profit organizations. (It should be carefully noted that NFP status is NOT the same as charitable status!)

    The new regulations can be found at (special thanks to Vlad Drkulec for providing the links)
    http://www.ic.gc.ca/eic/site/cd-dgc....h_cs04954.html

    Links to the act and transition guides are on the left.

    If you follow the links you get to the following including a pdf of the regulations:

    http://laws-lois.justice.gc.ca/PDF/SOR-2011-223.pdf

    Previous discussions on the subject can be found at:
    http://www.chesscanada.info/forum/sh...vernance-Rules

    http://www.chesscanada.info/forum/sh...mmittee-Report (Note that the link to the previous NFP Act committee is attached to the first message in this thread)

    The Governors in the January 2013 quarterly meeting decided not to support the framework proposed by the committee. Given the CFC loses its NFP status if we do not adopt constitutional changes that would comply with the new Act, we have a need to do something but what specifically?

    I have been asked by the President to put this question to the Governors for feedback. Note that this is the same information presented in the October 2013 meeting. We are in serious trouble if we fail to transition to the New Act's requirements by the deadline. As the Federal website says: "Corporations can take advantage of the benefits of the NFP Act once the transition is complete. The transition process involves obtaining a Certificate of Continuance and making by-laws that comply with the NFP Act."

    [Speaking personally not as CFC Secretary, I am not at all comfortable with some of the things Ottawa is requiring of us but the bottom line is my personal opinion isn't important - our non-profit status is in question if we fail to comply and there can be no consideration of charitable status or any other type of status without "new" Not for Profit status in place. This is the "bear in the room" and all Governors need to be aware that the deadline is coming. I would specifically urge any Governor who feels unfamiliar with the issue to read the thread http://www.chesscanada.info/forum/sh...mmittee-Report] (that's the second thread given under "previous discussions on the subject...")
    Last edited by Lyle Craver; 01-04-2014 at 01:45 PM.

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    Here is a nice transition guide PDF which provides a good overview of what we are faced with.

    http://www.ic.gc.ca/eic/site/cd-dgc....ditionl_EN.pdf

    We realistically need to have this whole process at a point where it can be approved by the governors by the April meeting. If we wait until the AGM then we will be faced with a set of new governors and possibly a new executive who will have to be taken through the same considerable education process once again. This will take us very dangerously close to the edge of an October 17th 2014 cliff without a good reason. Lets be very clear, it is not our non-profit status which is at risk. It is our existence and all of our assets which are at risk.

    My belief is that if we do choose to behave irresponsibly that Humpty Dumpty (the CFC) will have a great fall and all the King's Horseman and all the King's men will not be able to put Humpty Dumpty back together again at least in a form that is recognizable as Humpty Dumpty.

    The last attempt at resolving this failed in large part because the committee and the executive adopted the vision set forward by the government of how a non-profit should be governed. This was not deemed acceptable by the governors including me at the time. Perhaps it might have been if the ground had been prepared and more thorough explanations had been made and the governors had been educated on the requirements. Perhaps a compromise might have been reached which would have allowed us to become compliant much earlier. In any case this is not the right moment to be concerned with might have beens.

    My current vision for the worst case scenario is that we simply get an acceptable (to the government) set of bylaws done which will bring us into compliance with the new NFP act. This will be a major reset of how the CFC is currently structured and operated. Our old bylaws, constitution and handbook would largely disappear at least from the point of view of the government.

    Based upon the feedback that I have received on my previous postings on this subject what I think that we can maintain is voting members (currently called governors) who will ultimately have the power to elect members of the board of directors which will have a similar structure to the current executive with the exception that we cannot have a past president that is not elected by the members or board as this is specifically prohibited in the new act. I see the voting members electing specific members of the board to specific positions (president, vice-president, FIDE representative, youth coordinator, treasurer and perhaps one or more additional board members in order to maintain or increase the current size). The legislation requires us to give a minimum (default is 3) and maximum (default is 9) number of board members.

    I will within a few hours post a set of bylaws for discussion purposes which will show what a minimally compliant set of bylaws might look like. I have done this on the governors private board but will make some changes to reflect the feedback which I got there.
    Last edited by Vladimir Drkulec; 01-05-2014 at 05:28 PM.

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    Technically you could still have a "past president" position as long as it's an elected one, correct?

    Would it be illegal if they were elected from a group of former presidents?

    Just curious.
    Christopher Mallon
    FIDE Arbiter

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    Quote Originally Posted by Christopher Mallon View Post
    Technically you could still have a "past president" position as long as it's an elected one, correct?

    Would it be illegal if they were elected from a group of former presidents?

    Just curious.
    Yes, I believe that you are correct. I think that if the past president is elected by the voting members from the former presidents then it would be legal to have a past president on the board even with the title of past president. We just can't have an unelected one whether the legitimizing election is by the members or by the board.
    Last edited by Vladimir Drkulec; 01-05-2014 at 05:01 PM.

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    Quote Originally Posted by Vladimir Drkulec View Post
    Yes, I believe that you are correct. I think that if the past president is elected by the voting members from the former presidents then it would be legal to have a past president on the board even with the title of past president. We just can't have an unelected one whether the legitimizing election is by the members or by the board.
    Pierre Dénommée has indicated that, "The newly elected board can appoint the past president. At most 1/3 of the directors can be appointed by the Board of Director after the voting members have elected it." My answer reflected this option but may not have been clearly stated.

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    I am unclear on Vlad's use of color - I presume the blue means areas where he feels we are OK and red where we are not.

    I like Pierre's suggestion with respect to the Past President

    I have major concerns with item 23 on Quorum - is this supposed to be based on Governors or on the membership at large? If the latter it's a formula for nervous collapse on the part of the Secretary since an important part of the Secretary's role is determining who is and is not entitled to vote.

    The online AGM would appear to be OK based on my reading of #20 and #25.

    I note en passant that the USCF called the role we call "Governor" "Voting Member" for years. I do not know whether this was in response to US Federal legislation or simply their own practice.

    I think we're OK on voting in Governors' meetings under 13A and 13B as that reflects our current practice. I am unclear if this requires all Governors voting to be secret after the ballot which is not our current practice on most matters.

    I am unclear the usefulness of the provision for removing an Executive or Officer at an AGM since presently their terms of office go from AGM to AGM so wouldn't the point be moot?
    Last edited by Lyle Craver; 01-06-2014 at 03:05 AM.

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    Will these new bylaws benefit to obtain a status of a registered Canadian amateur athletic association as a way for the CFC to become a charitable organization again?
    .*-1

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    They're pretty much a prerequisite for application as I understand it

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    Quote Originally Posted by Egidijus Zeromskis View Post
    Will these new bylaws benefit to obtain a status of a registered Canadian amateur athletic association as a way for the CFC to become a charitable organization again?
    For the most part they are the defaults suggested by the new legislation with some minor tweaks to pay homage to our current practices. If there are any additional steps required for sporting organization status we will be able to amend these later at a cost of $200. I can look at this but our task is to find bylaws acceptable to the governors and to the government ahead of the deadline. Michael von Keitz has mentioned some of the requirements of registering as a sporting organization and getting compliant with the new NFP act is the main first step before we can even think about any of the others.

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    I think that setting a specific number for quorum is just asking for problems in the future after possible other changes. Why not just say quorum is 25% of the Voting Members?

    Actually that probably needs to be higher. We are going to be losing the Life Governors. I'd go with 33% or even 40%.
    Christopher Mallon
    FIDE Arbiter

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