The CRA tracks a few activities for charities. The main ones are fundraising, public policy dialogue and development activities (PPDDA), and lobbying. While these activities are charitable, it is important that Projects and MakeWay properly track and manage the risks associated with them.

The CRA allows Projects to undertake these activities as they recognize that charities often have valuable expertise and knowledge to share. As Projects of an environmental and social change organization, many Projects are advocates for their communities or certain issues. At some time Projects may want to shape the Project’s advocacy efforts to include engagement in political advocacy or lobbying activity. It’s critical that Projects work closely with their Project Specialist before beginning any political activity or lobbying efforts. These activities are strictly governed by CRA and by federal and provincial lobbying legislation, and MakeWay is required to track and report them for all of its Projects.

There are many online resources such as Imagine Canada’s significant section on managing risk in the nonprofit sector. Check out their Risk Management 101 page and peruse the links to the tools and resources of Imagine Canada and other organizations.

There are several documents that Projects must send to the Support Team for review. These include:

• Any asks for funding, including proposals, major gifts, fundraising campaigns, or other requests for donations.
• Any publications, including press releases, op-eds, publications, newsletters, annual reports, and materials.
• Website updates and changes.
• Any reports, including both the financial and narrative components.

In addition, all formal agreements (such as employment offers, contracts, grants, leases and so forth) must be reviewed and signed by MakeWay.

MakeWay allocates a percentage of the Project's annual revenues to pay for shared overhead expenses such as:

• Governance by MakeWay's Board of Directors.
• Leadership and oversight by MakeWay's senior management team.
• Administration and specialized assistance by the Support Team.

Our tiered overhead model includes the following rates that will be applied each fiscal year on all types of incoming revenue: 

• $12,000 minimum annual overhead contribution 
• 12% on the first $500K 
• 10% on the next $500K ($500K to $1M)  
• 8% on the next $1M ($1M to $2M) 
• 6% above $2M 

Projects must generate sufficient revenue to contribute a minimum of $12,000 toward shared overhead expenses each fiscal year (April 1-March 31). This is outlined in the Terms of Reference.

The $12,000 minimum contribution is necessary to cover the basic, foundation expenses incurred by MakeWay when they support a Project.

When Projects are not on track to generate sufficient revenues to cover the minimum overhead allocation of $12,000, at year-end MakeWay will work with the Project to explore the following alternatives:

• Identify a donor or funder that will contribute specifically to the overhead allocation so that the $12,000 is covered by March 31 regardless of revenues. This could be in one donation early in the year or two or three payments spread throughout the year provided there is a written commitment by September 30 in any year.
• Dedicate any unrestricted Project funds to scheduled payments towards the $12,000 minimum.

If a Project pays some or all of the overhead allocation by these alternative methods and then receives unanticipated regular funding in the same calendar year, the Project's accounts will be adjusted so the Project is credited for any alternative payments. This will ensure that the Project's total overhead allocation is not more than the amount agreed upon in the Terms of Reference.

In exceptional circumstances, MakeWay may consider applying a rolling average of the overhead allocation. For example, a Project might receive multi-year funding all in the first year, resulting in no revenue in the second year. In this case, MakeWay would look at the Project's revenues in preceding years and the expectation of strong revenues in the next year to determine whether it is acceptable for the Project to not meet the $12,000 minimum overhead allocation. The total overhead allocation for the two years would have to be at least $24,000.

There are a variety of reasons why a Project might choose to end its relationship with MakeWay:

• A time-limited mandate.
• A more suitable charitable home is identified.
• Completion of programmatic work.
• Insufficient funds.
• A decision to wind down operations.

There are also some reasons why MakeWay might choose to end its relationship with a Project:

• Project employees have engaged in unauthorized or illegal activities.
• The Project engages in activities that do not comply with CRA requirements.
• A Project has materially violated a MakeWay policy.
• A Project is financially inactive for more than 6 months.

Under CRA regulations, MakeWay can only transfer a Project’s assets to a qualified donee. So, when Projects transition their activities to a new organization, the first thing MakeWay must do is confirm that organization's charitable status. 

Whatever the status of the new organization, the workplan from the review meeting will outline the necessary steps to complete the transition. 

Funding Agreements 

At the review meeting, the Project Specialist will provide with an overview of all active grants and funding agreements. The Project leadership and Support Team will review these agreements to determine an appropriate strategy for these obligations. There are typically three strategies for handling funding agreements:

• Finish the agreement on an accelerated timeline. In this case the Project would complete all outstanding deliverable and submit the final report prior to closing the Project. 
• Transfer the agreement to a new entity. For this to happen, current funders will have to provide written permission to transfer both the remaining funds and all grant and reporting deadlines. MakeWay has a standard template letter which you can share with funders to get this permission. Some funders have very specific rules and restrictions about transferring funds from the original grantee (MakeWay) to the new organization. To simplify the move, funds that are planned to be used post-move should be deferred to the extent possible until the new organization can accept the funding. 
• Return the grant. In rare cases, a funder may ask that a grant agreement be terminated and funding returned. In these cases, MakeWay can provide a spending to date report for the funder and assist with the termination details. 

Once funder approval to return or transfer an award is received, MakeWay will grant out the unspent portion of the award. 

Financials 

• Project employees are expected to ensure that their Concur expenses and invoices are all up to date and approved prior to the Project’s close to ensure that the final transfer is the correct amount. 
• Any remaining cash on hand for the Project will be transferred as a grant to the new organization. Generally, funds are not released to the new organization until there are no remaining obligations under the Project. However, if the Project requires funds to be released in advance to begin activities at a new organization, consult with the Project Specialist. Please note, MakeWay is unable to transfer grant funds to another entity without written permission from the funder. 

Human Resources 

• In the review meeting, the Project Specialist will provide details on current vacation liability for all employees. Depending on how long the Project's wind down period is the Project may either encourage staff to use up all accrued vacation days or the Project may decide to pay out any outstanding holiday as of the Project's close. 
• All Employment Agreements will be formally terminated under the transfer agreement as determined by the Project Director. The Project may wish to grant employees seniority dates based on when they joined MakeWay rather than when they join the new entity. 
• The Project will be responsible for any severance or other employee costs incurred as a result of the transfer. 

Contractual 

• All accounts, contracts, and leases with MakeWay will be terminated. The Project will be responsible for re-establishing these relationships and accounts at the Project's new entity. 
• All MakeWay accounts, contracts, and leases will be terminated in accordance with signed agreements and the timeline established by the Project Director, provided there are sufficient resources to cover all continuing costs. 

Assets 

• If Project activities are transitioning to a qualified donee, MakeWay will be able to transfer all the Project assets. To do this, a written agreement will document the move of the Project’s tangible and intangible assets to the qualified donee. This agreement will be signed by MakeWay management and the qualified donee. It will record the assets, monies, and intellectual property being transferred. Legal, audit, or other professional costs incurred by the Project or MakeWay to prepare and implement this agreement will be charged to the Project. 
• If activities are transitioning to a non-qualified donee, the organization will have to purchase the Project’s tangible and intangible assets for fair market value. To do, MakeWay will work together to create a list of all assets and evaluate their cost. 

Regulatory 

• Project staff will be required to submit reports on political activity, fundraising, and lobbying activities up to the Project’s close date. 
• MakeWay will provide a Confirmation of Project Termination to the Project leadership when all financial transactions, reporting requirements, and other activities under the workplan are completed to MakeWay’s satisfaction. 

Projects that are winding down entirely must work with the Support Team to ensure all work is completed prior to the Project's close.

Funding Agreements 

• Funders will be notified of the winding down of the Project. They will be asked to provide written permission to make the necessary changes to award agreements to complete any obligations as quickly as possible. 
• Depending on arrangements with funders, MakeWay may return the unspent portion of an award and reverse any overhead allocation on that agreement. Any expenses to be spent in order to satisfy Project commitments will be made once funder approval for amendments are received, assuming the Project’s financial status allows for these expenses. 

Financials 

• Project employees are expected to ensure that their Concur expenses and invoices are all up to date and approved prior to the Project’s close. 
• Should there be any remaining cash on hand for the Project after completing all Project commitments, the Support Team will work with the Project to identify a qualified donee with similar purposes to receive a grant of the remaining funds. If no qualified donee is identified within 60 days of receipt by the Project leadership of the Confirmation of Project Termination, the remaining funds will be retained by MakeWay for general charitable purposes. 

Human Resources 

• In the review meeting, the Project Specialist will provide details on current vacation liability for all employees. Depending on how long the Project's wind down period is the Project may either encourage staff to use up all accrued vacation days or the Project may decide to pay out any outstanding holiday as of the Project’s close. 
• All Employment Agreements will be formally terminated in accordance with a timeline established by the Project Director, provided there are sufficient resources to cover all continuing employee costs. 
• The Project will be responsible for any severance or other employee costs incurred as a result of the transfer. 

Contractual 

• All accounts, contracts, and leases will be terminated in accordance with signed agreements the timeline established by the Project Director, provided there are sufficient resources to cover all continuing costs. 
• All vendors and creditors will be notified that the Project is winding down and these accounts will be closed. 

Regulatory 

• Project employees will be required to submit reports on political activity, fundraising, and lobbying activities up to the Project’s close. 
• MakeWay will provide a Confirmation of Project Termination to the Project leadership when all financial transactions, reporting requirements, and other activities under the workplan are completed to MakeWay’s satisfaction.