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Nonprofit Newswire | Sex and Tax Breaks—A “Charitable” Foundation has Status Revoked

Ruth McCambridge
May 11, 2010
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May 10, 2010; CB Online | What is alarming about this story is the flagrancy with which one can violate the law and charitable regulations—never mind standards of decency—before being taken down. A simple, no nonsense notice appeared in today’s Marketwire that reported that the Orion Foundation of Toronto has finally had its charitable status revoked by the Canada Revenue Agency as of March 30, 2010. It cites a number of violations in the most dry terms and you have to go back a year to get the story behind the story.

This article details the schemes of foundation president James Arion—aka James Aryan (yes, in celebration of race purity), aka Eleftherios “Terry” Kambouris who, according to the Star, ran both an escort service and this philanthropic scam out of his “country complex.” The philanthropic scam entailed the issuing of receipts many times the value of a donation to donors. This would result in donors making money in the form of tax relief on their donations and then the charity used the donations apparently largely for personal enrichment.

In April 2009 when that article was written, the Star was conducting investigations of the charity and said, “Remarkably, the Canada Revenue Agency has not taken action against Orion and the tax shelter it works with—the Canadian Institute of International Philanthropy (COIP)—despite determining a year ago that the scheme was bogus.” The foundation, which was set up with the mission of helping children said it was buying medicine with the donations.

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Reports the article, “It’s unclear whether they actually do buy the drugs, but if they do, they’re highly overvalued. COIP says the per-dose value for its drugs is $12, but the Star found the real cost paid by the World Health Organization and other relief groups is 30 cents a dose. This overvaluing of the product leaves lots of profit in the pot for both COIP and Orion.”

The CRA found, according to the just released notice, that the foundation issued $91 million in receipts but only spent $70,000 in charitable disbursements. Abominable, and a good argument for having a healthy regulatory system for charities.—Ruth McCambridge

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ABOUT THE AUTHOR
Ruth McCambridge

Ruth is Editor Emerita of the Nonprofit Quarterly. Her background includes forty-five years of experience in nonprofits, primarily in organizations that mix grassroots community work with policy change. Beginning in the mid-1980s, Ruth spent a decade at the Boston Foundation, developing and implementing capacity building programs and advocating for grantmaking attention to constituent involvement.

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