With Beth Oloth’s revocation, comments were made about what took the Charities Directorate so long.[i] Expert charity lawyer Mark Blumberg commented “if abuses like these are allowed to continue it will undermine the public’s confidence in the whole charitable sector” and the government should be embarrassed the charity was allowed to operate for so long.

Our current laws muzzle the Charities Directorate from informing us. The Charities Directorate must follow due process and do exhaustive audits and investigations. In the Beth Oloth case, the investigation was dragged on by lawyers and spanned more than two years. It is alarming that in these two years under investigation, Beth Oloth tax receipted $49.9 million in donations and received an additional $53.9 million from private foundations.

Currently, the Charities Directorate cannot suspend “trading” or notify donors until it makes its final decision. In contrast, British laws allow its Charities Commission to prominently notify the public when a charity is under investigation.

Yet the Charities Directorate is not silent in the Beth Oloth case. Its investigation notes report a curious relationship between Beth Oloth and Gates of Mercy, another Toronto-based charity. Numerous cheques made out to Gates of Mercy were deposited into Beth Oloth’s bank account; an American GoFundMe page told supporters that money could be tax-receipted by Beth Oloth, with instructions to mail cheques to Rabbi Reidel, a director of Gates of Mercy.  In the Charities Directorate’s investigation, Beth Oloth claimed there is no ongoing relationship between itself and Gates of Mercy.

Gates of Mercy is an active charity that Charity Intelligence rates. We rate Gates of Mercy zero for its financial transparency and give it a F grade on results reporting. Its financial statements are unaudited. It has one staff that raises $10.2 million in donations. It is extremely cost efficient with overhead costs of only 0.9%. Given these signs, Charity Intelligence has added a donor advisory.

Read more:

The revocation of Beth Oloth - a case study with early warning signs for intelligent donors

Why charity transparency matters

What donors can do to improve charity transparency

Charity Intelligence's report on Gates of Mercy and Beth Oloth

Sources:

[i] Stewart Bell, “Government revokes charity status of Canadian Jewish group that supported ‘foreign armed forces’, Global News, January 28, 2019

Canada's Charities Directorate, Revocation of Beth Oloth Charitable Organization, Canadian Gazette, January 12, 2019

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