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CRA revokes Jewish group’s charitable status

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The Canada Revenue Agency's offices in Ottawa. (Michel Rathwell/CC BY 2.0)

The Canada Revenue Agency (CRA) has stripped a small Toronto-based Jewish organization of its charitable status, citing its support for Israel’s armed forces, the funding of projects in the Palestinian territories and sloppy administration.

The revocation of Beth Oloth Charitable Organization’s charity status was published on Jan. 12 in the Canada Gazette. On Jan. 25, the CRA released a 94-page document detailing its case against the organization.

The decision means the charity is no longer tax-exempt and thus cannot issue receipts to donors. It has 90 days to appeal the ruling.

The online source Charitydata listed Beth Oloth’s revenues in 2017 at $61 million – $31 million of which was received from other registered charities. The total eligible amount for which it issued tax receipts that year was $28 million. CRA rules permit a charity to donate to another Canadian charity.

The charity’s fortunes have fluctuated over the years: Charitydata shows revenue of $44.5 million for 2016 and $9.4 million in 2012. The CRA said it was largely inactive from 2003 to 2011.

The CRA document shows that Beth Oloth is registered to an address on Coldstream Avenue in Toronto. It was founded in 1980 and does not appear to have a website.

READ: JNF PUSHES BACK AGAINST ALLEGATIONS IT VIOLATED CANADIAN TAX LAW

Rabbi David Ehrentreu, whose name is listed in the CRA documents as a principal with Beth Oloth, had no comment and advised The CJN to speak to his lawyer.

Among the CRA’s charges is that Beth Oloth acted as a “conduit” to channel funds to projects conducted by other organizations.

According to the CRA document, large parts of which are redacted, Beth Oloth’s goals were “to stimulate interest in providing higher Jewish education and Jewish religious training for the perpetuation of the Jewish religion and the training of teachers of the Jewish religion.”

Among its other goals were “to commission authors and scholars to write articles, monographs and books on the subjects of Bible interpretation, Jewish religious philosophy, Jewish religious law and all other topics” that will advance Jewish religion and culture, and to promote the distribution of such works to schools and students.

The CRA said these purposes “are broad and lack the degree of certainty and clarity required” for Beth Oloth to be considered a charity.

The CRA also cited Beth Oloth’s support for “increasing the efficiency and effectiveness of the Israeli armed forces, which is not a recognized charitable purpose in Canada.”

It is our position that these pre-army mechinot exist to provide support to the Israel Defence Forces.
– Canada Revenue Agency

Beth Oloth forwarded funds “to a number of agents who appear to be mechinot,” said the agency, referring to an Israeli educational program that prepares high school graduates for military service.

“It is our position that these pre-army mechinot exist to provide support to the Israel Defence Forces, and that funds forwarded to these mechinot are therefore in support of foreign armed forces,” the CRA said. “While increasing the effectiveness and efficiency of Canada’s armed forces is charitable, supporting the armed forces of another country is not.”

Beth Oloth had explained that it was simply funding teachers to provide religious training. It pointed out that since Israel has mandatory army service, “providing any aid to anyone under the age of 18 may be construed as providing preparation for entrance into the military.” But, it stressed, that was not its position.

The audit also found about $1.2 million in donations to “projects conducted in the Occupied Territories.” However, the names of the projects are blacked out.

The CRA said a charity’s work cannot contradict Canadian public policy. Canada, it stated, does not recognize Israel’s permanent control over territories seized in the 1967 Six-Day War. “Providing assistance to Israeli settlements in the Occupied Territories serves to encourage and enhance the permanency of the infrastructure and settlements, and therefore is contrary to Canada’s public policy and international law,” the CRA said.

Beth Oloth had explained that its work involved providing stipends to the poor for the observance of religious life. “This would seem to fall outside the scope of the policy,” the charity said in a pointed letter to the CRA a year ago.

The Canadian government would be effectively outlawing the support of Jewish religious practice in particular places in the world.
– Beth Oloth Charitable Organization

“Indeed, we are hopeful that it does; otherwise we would have to think that the Canadian government would be effectively outlawing the support of Jewish religious practice in particular places in the world, in contravention of the Charter (of Rights) and of Canada’s international obligations to refrain from religious discrimination.”

Beth Oloth exists to help poor ultra-Orthodox communities. The organization pointed out in its 2018 letter to the CRA that many ultra-Orthodox men do not work because they are immersed in the study of holy texts.

The CRA also found the organization exhibited a “lack of direction and control” over its purported activities and that it gave funds to non-qualified donees. Beth Oloth also failed to maintain adequate books and records, did not issue receipts in accordance with the rules and failed to file necessary documents, the auditors said.

Another online source, CharityDir, said that in 2016, Beth Oloth made 151 gifts to qualified organizations, totalling $3.7 million. Several are in Toronto, Montreal and Ottawa.

Global News reported that last year, the Globe and Mail put Beth Oloth 62nd in its ranking of Canada’s top 100 registered charities, based on donations.

The watchdog Charity Intelligence gives Beth Oloth a failing grade in results reporting and zero out of three for financial transparency.