Charitable Status

Date: Wed, 5 May 1999 10:16:12 -0300 (ADT)
From: Christopher Majka <nextug@is.dal.ca>
To: Doug Rigby <drigby@chebucto.ns.ca>
cc: CCN Information Provider Committee <ccn-ip@chebucto.ns.ca>, CCN Board of Directors <ccn-board@chebucto.ns.ca>, David Potter <ab934@chebucto.ns.ca>
Precedence: bulk
Return-Path: <ccn-ip-mml-owner@chebucto.ns.ca>

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Hi Doug!

> On Tue, 4 May 1999, Douglas Rigby wrote:
> 
> > According to Revenue Canada our Charitable tax status became
> > effective as of Jan 1/99. So yes you can tell IPs that we
> > have charitable status. What you cannot tell them is what proportion
> > of their "donation" will be eligible for a tax receipt. 
> > 
> > Two things need to happen:
> > 
> > I need verification from Dennis our accountant on the concept of "service"
> > and "donation" elements.
> > 
> > Second and equally important I need the Board to decide and the
> > amount of "service" in each of the membership and IP categories.
> > 
> > My suggestions to the Board was a service element of $200 for IPs.
> > This may be too high. What was the result of your informal
> > discussion among IPs.

This is a very interesting development the implications of which I wasn't
at all aware of (until David Potter drew them to my attention). 

Clearly in the determination of the 'service' element we want to come to a
determination of a figure that is somewhere in a reasonable ball-park. Our
costs to support an IP clearly depend on the way and degree to which we
amortize our fixed and other costs. A higher figure (like $200) gives
greater value to the service which the CCN provides. On the other hand, a
lower figure (such as $100) will give a significantly greater incentive to
IPs to donate (and thereby relize a financial benefit).

I would argue for a lower rather than a higher figure since I think this
might result in significantly better prospects for the CCN to realize some
revenue.

> > As we discussed last week whatever the "service" amount agreed to
> > CCN can, does and will subsidize any and all IPs by the difference
> > between the service amount and their donation. Tax receipts will be
> > issued for $10 or more amounts above this "service" amount.
> > 
> > What we want to balance off in setting these "service" rate for
> > various memberships is to try to  keep our total service revenue
> > below $50,000 so we do not have to submit 15% of this to the 
> > government (even though we can claw back 7.5%)

Gosh, I wouldn't worry about this at all. It's only in the 50,000 - 54,000
bracket that our net would be affected by the 7.5% HST we would have to
pay. Above $54,000 gross, our net rises above $50,000 so that we are
better off in the end in any event.

> > What Revenue Canada is looking for is a "fair" assessment of
> > IP and other services as the "service" amount.
> > 
> > Regards, Doug

Cheers!

Chris

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Christopher Majka                               <aa051@chebucto.ns.ca>
Editor-in-Chief: Chebucto Community Net - Halifax, Nova Scotia, Canada
URL = http://www.chebucto.ns.ca/Home.html

"We have ... in this country ... far too many captive editors who cannot 
even be heard to rattle their chains."              -- Carl E. Lindstrom
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