Two religious charities have had their status revoked by Canadian tax authorities after auditors raised concerns about how they were using their money abroad.

The Canada Revenue Agency (CRA) revoked the registrations of both the Canadian Foundation for Masorti Judaism and L’Assemblée Nouvelle Alliance on Oct. 25. Letters explaining the reasons for those revocations have been released to the IJF, and they lay out the results of audits that identified problems with the charities’ spending in the Middle East and Africa.

The letter to the Canadian Foundation for Masorti Judaism states that an audit found the Conservative Jewish charity “purposefully acted as a conduit for non-qualified donees in Israel.”

Non-qualified donees are funding recipients that do not have charitable status in Canada. Canadian organizations can grant money to these donees, but only if they can prove the money is used for a charitable purpose — something the CRA says didn’t happen in the case.

“The current audit revealed that the organization is transferring funds to various non-qualified donees in Israel that are carrying out their own activities,” the letter says. “The organization appears to have no role in any of the activities other than providing funding.”

The letter also alleges the organization co-mingled its resources with Mercaz-Canada, a non-profit that does not have charitable status, and allowed Mercaz-Canada to make decisions about how to use its money.

According to the CRA, the same issues were identified during an earlier audit. The charity signed a compliance agreement in 2019, promising to demonstrate it had control over the money it was sending abroad and wasn’t just acting as a fundraising arm for Israeli organizations.

Despite this earlier agreement, “the current audit findings constitute repeat serious and material non-compliance,” the letter says.

Meanwhile, much of the letter to the L’Assemblée Nouvelle Alliance, a Christian charity based in Scarborough, Ont., centres on the organization’s purchase of two plots of land in the Democratic Republic of the Congo (DRC) in 2016 and 2022. The intention for these lands was to build churches for the local community.

But to date, no churches have been built, the letter says.

The audit found that the alliance’s president withdrew funds from the charity’s bank account and deposited them into the account of an unnamed individual, ostensibly to be transferred to the DRC to build walls around one of the plots.

But the CRA said the charity could not provide documents to prove the money had made it to Africa or that it had been used to buy construction materials. For that reason, the letter says, “the organization has not exercised the required degree of direction and control over the use of its funds, or over the activities to be conducted with these funds.”

Representatives of the two revoked charities have not responded to requests for comment.

Charities that have had their status revoked can challenge the CRA’s findings in court.

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