Bill C-4 is coming! In January, the government proposed a bill aimed at reforming the way nonprofits and associations incorporate. There are significant changes to how organizations incorporate initially and operate daily. Are you aware of Bill C-4’s impact on your organization?

Nonprofit organizations (NPOs) in Canada are created and sustained by an organizational motivation toward a common goal. As a result, NPOs tend to devote less time to organizational structure than reaching their goal. The truth is, an organization cannot be successful without a solid organizational framework. The government of Canada has proposed a bill that will amend the structures of all NPOs, big and small.

The Canada Not-for-Profit Corporations Act risks affecting day-to-day operations of every NPO in Canada. Reintroduced by Secretary of State (Small Business and Tourism) the Honourable Diane Ablonczy, Bill C-4, aims to change the way in which NPOs are governed. Nonprofits that require funding and donations to alleviate operation costs will be subject to similar standards as for-profit corporations. The act aims to increase fiscal accountability, clarify directors’ liabilities and responsibilities, and clearly define members’ rights. For NPOs, this means increased accounting, record-keeping procedures, and general prudence. The changes in Bill C-4 run deep, but can be navigated with the counsel of an informed not-for-profit professional.

Prepare now for impending changes

Bill C-4, the Not-for-Profit Corporations Act, continues to roll through committee hearings without much opposition. Organizations that have not begun to prepare for the proposed legislative changes continue to risk the future of their existence. This bill has been several years in the making and will pass virtually unchallenged. For those unfamiliar with Bill C-4, it proposes systemic changes to incorporation process for nonprofits.

Every organization, regardless of whether they currently exist or are still in the development stage, will be affected by these changes, which require organizations to devise strategic action plans. Nonprofit and association executives must ensure that their organization develops a sustainable strategy for dealing with Bill C-4. Since Bill C-4 will affect organizations from the top-down, executives are charged with the task of ensuring their organization is “reform ready.”

If you haven’t begun devising your action plan, it’s not too late.

Where to start?

First, familiarize yourself with the bill, its proposed changes, and amendments to the current incorporation process. The government’s intention for the Not-for-Profit Corporations Act is to streamline the incorporation process, while increasing the transparency and accountability of nonprofits.

Second, it is important to understand how these changes will affect your organization going forward. Bill C-4 will change the way organizations incorporate, keep records, and account finances. New definitions of “soliciting corporations” and “unsoliciting corporations” will define, among other things, which organizations require yearly audits.

Finally, nonprofit and association executives need to be proactive in their response to the proposed changes. This involves mapping a strategic plan of action for your organization in order to prepare it for the changes to come. In preparation, organizations should be adjusting their procedures to align with new regulations, ensuring that the organization will not be shaken by the organizational change to come.

Preparing for legislative reform

It’s time to ask yourself, “Is my organization reform ready?” If you are still wondering whether or not this will affect your organization, consider this: it will affect all nonprofit organizations and associations. Organizations that choose not to prepare will risk dissolution by the federally-appointed director. Your organization will be best served by a well-executed plan of action. This action plan will be best initiated by researching the changes and analyzing the effects they will have on the operations of your organization. With the help of a nonprofit professional, you can ensure that your organization is reform ready.

[Editor’s Note: Bill C-4, the Canada Not-for-Profit Corporations Act, passed Third Reading in the Senate and received Royal Assent on June 24, 2009. It affects approximately 19,000 federally incorporated not-for-profit organizations in Canada.]

Mark Buzan is principal and chief magnifier in Action Strategies, a full service strategic communications, public relations and public affairs consultancy for nonprofits and associations. Contact him for advice on reaching audiences you may or may not have yet considered in your marketing communications and PR campaigns. You can view his website at www.actionstrategies.ca.