'Burner charities': How Canadian dollars are flowing to Israel for decades

Dubious charitable groups are exploiting loopholes in Canada’s laws to funnel millions of dollars to Israel, where the funds are mostly used to help illegal settlers seize large swathes of Palestinian land in the occupied West Bank.

Some of the funds are also diverted to agencies helping the Israeli military, which has been engaged in a brutal offensive in Gaza since the October 7 cross-border operation by Hamas.

Known as ‘burner charities’—like the one-use burner phones, which are hard to detect and often linked to criminal activities globally—these allegedly not-for-profit groups vanish once targeted by financial regulatory authorities, only to be replaced by a similar charity with a new identity.

TRT World has already documented a campaign by several advocacy groups which have targeted a Canadian charity that has long been supporting Jewish settler organisations and entities associated with the Israeli army.

However, this trend goes far beyond one group, and the campaign’s demands go beyond urging the government to investigate a single Zionist organisation.

The campaign has pointed out that the chronic issue of Canadian charitable funds moving overseas without sufficient transparency and accountability has persisted for decades.

Israel, a nation with a per capita GDP equivalent to or higher than Canada's, has consistently ranked among the top two recipients of Canadian charitable funds over the past five years, receiving over 11 percent of donations allocated to other countries by charities in the North American nation.

This trend has been facilitated by these burner charities, a chain of interconnected organisations, with a new one stepping in when one of them faces an audit by the Canada Revenue Agency (CRA).

Burner charity phenomenon

Direct funding of Israeli organisations from Canada – a country that does not recognise Israeli occupation over Palestinian territories since 1967 and opposes illegal Jewish settlements in the occupied West Bank – could pose legal risks for Zionist Canadian charities.

Several Canadian charities that have provided funds to Israel have been revoked in the last few years for various reasons, including funds not being operated exclusively for charitable purposes, listing non-qualified donees, engaging in non-charitable activities, and providing an undue benefit to a single person.

Consequently, Canadian groups willing to support Israeli occupation more easily have found another way to bypass the authorities.

In their 2022 paper, researchers Miles Howe and Paul Sylvestre introduced the "burner charity" phenomenon, which arises when charities face revocation of their registration due to non-compliance with Canada Revenue Agency regulations.

After one charity is revoked, another seamlessly continues the donation pattern to overseas organisations. All cases involved the funnelling of money to Israel.

All burner charities showed a sudden surge in charitable activity from almost zero to millions of dollars within two years, had administrative costs below one percent of yearly fiscal activity, had minimal financial liabilities compared to expenditures, and saw over 75 percent of their funds leaving Canada.

Chain of redirected funds

After being registered and granted a charitable licence by the CRA, each burner charity received minimal donations for several years as it established a risk profile and gained accountability.

They then moved millions of dollars each year to unregulated international entities, mostly Israel-based, until the CRA noticed and conducted an audit.

Through Access to Information and Privacy (ATIP) requests between 2000 and 2020, researchers uncovered three burner charities showing an apparent interconnectedness. In 2012, an increase in donations to a charity named Gates of Mercy from private foundations drew the attention of the CRA, leading to its initial audit.

Due to reported problems after the audit, such as its inability to oversee the use of its funds, failure to demonstrate proper utilisation for charitable activities, inadequate record-keeping, and issuance of non-compliant receipts, the group’s charity status was revoked in 2019.

Gates of Mercy funded Regavim, an extremist pro-settler NGO that supports Israeli settlers forcibly taking over Palestinian lands, in 2014 and 2015.

After Gates of Mercy entered a compliance agreement with the CRA after its 2012 audit, another charity, Beth Oloth, received over $6.4 million through 716 separate donations from other Canadian charities. Over the next few years, Beth Oloth's operations substantially grew.

Following the CRA’s response in 2016 with an audit of Beth Oloth's activities, it was discovered that it was non-compliant with the Income Tax Act for various reasons, similar to Gates of Mercy.

What was also remarkable is that Beth Oloth managed to conduct a substantial level of international activity, channelling over $31 million to over 2000 recipients in a year, with just one full-time employee, one part-time volunteer, and $100,000 in administrative costs.

CRA revoked Beth Oloth's charitable status in 2019, the same year when over 40 foundations and donors collectively redirected their donations to the Jewish Heritage Foundation (JHFC), which allocates 90 percent of its revenues to organisations in Israel and the US.

JHFC also funds projects and organisations that benefit illegal settlements, such as Keren Hashviis, a group supporting Jewish settlers in Area C of the West Bank, which has been under Israeli occupation since 1967.

These sequenced shifts in fund redirection primarily stem from the money flow of what Howe and Sylvester term "anchor foundations," which consistently support burner charities and often benefit from tax evasion in the process.

Canadian government’s complicity

Activists have lodged five complaints with the CRA since December 22 regarding Canadian charities providing direct support to Israeli complicit organisations, including the Jewish Heritage Foundation.

While it’s not inherently illegal to send money to a foundation supporting the Israeli military or settlers, what is problematic is that these organisations are registered charities subsidised by approximately 30 percent of taxpayer money.

“This effectively implicates the state in these activities,” says Miles Howe, Assistant Professor of Critical Criminology at Brock University.

“My specific concern arises from instances like South Africa holding Israel accountable within the ICC and Nicaragua challenging Germany, while we, in Canada, are actively subsidising these activities at a state level without apparent interest or capability from our regulator, the Canada Revenue Agency, to address this issue,” he tells TRT World.

Howe and other activists, who have been urging the Canadian government to conduct comprehensive investigations into all Canadian charities funding Israeli complicit organisations, and to publish clear policy guidelines stating that supporting these groups is not legitimate charitable activity, believe that this has become a systemic issue within the Canadian charitable landscape.

They lodged a complaint against another NGO supporting military and settlement projects, the Jewish National Fund, in 2017, only to find out that it was already under audit, Corey Balsam, the national coordinator of Independent Jewish Voices Canada (IJVC), says.

"That's when we realised that these organisations often retain skilled lawyers, enabling them to negotiate agreements with the government to cease certain activities and improve their operations, ultimately allowing them to maintain their charitable status,” Balsam tells TRT World.

In November, a case was initiated against four Canadian ministers and Prime Minister Justin Trudeau, with the intention of taking them to the ICC. The notice of intention sought prosecution for complicity in war crimes due to ongoing crimes against humanity by Israel in Gaza.

National Revenue Minister Marie-Claude Bibeau, who is responsible for charities, was also among those named in the case.