Sigma Chi – Federal Court of Appeal finds that a charity providing scholarships mostly to its frat members and not controlling a foreign scholarship program, breached ss. 149.1(1)(a) and (a.1)

Laskin JA found no reversible errors in the Minister’s findings that the charitable registration of the appellant (Sigma Chi), which described itself as an international fraternal organization, should be revoked:

• it was devoting the majority of its scholarship funds to Sigma Chi members and pledges (i.e., providing private benefits to its members through such “in-house” scholarships, contrary to s. 149.1(1)(a));
• it provided funds to non-qualified donees (contrary to s. 149.1(1)(a.1)) by making loans to Sigma Chi fraternity housing corporations, established to provide housing to members;
• it failed (also contrary to s. 149.1(1)(a.1))to maintain direction and control over the Horizon Scholarship program, a program partially funded by Sigma Chi and administered in the United States. (It had only one of the eight seats on the governing board, and only two of 16 on the selection committee, so that it did not have direction and control over the use of its funds.)

Neal Armstrong. Summaries of Sigma Chi Canadian Foundation v. Canada (National Revenue), 2024 FCA 59 under s. 149.1(1)(a) and s. 149.1(1)(a.1).