Charity Leaders See Need for Fair Audits, but That’s Not What They See Happening

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In his col­umn July 28 in the Finan­cial Post, Ter­ence Cor­co­ran let fly spit­balls at Mar­garet Atwood, PEN Canada, and “left­wing” jour­nal­ists and writ­ers over their con­cerns about the politi­ciza­tion of Canada Rev­enue Agency by the cur­rent fed­eral government.

Corcoran’s always been a fun read and he has the integrity as a com­men­ta­tor to make it clear where he’s com­ing from polit­i­cally and eco­nom­i­cally. But his attempt to paint those ques­tion­ing excesses of the cur­rent government’s approach to char­i­ties and civil soci­ety orga­ni­za­tions as left­ist whin­ers seek­ing a free ride from gov­ern­ment is a step too far.

My inter­views with 16 lead­ers of five char­ity sec­tors, in five provinces, revealed not one who thought they ought be fully unre­strained. They accepted they owe the pub­lic finan­cial and pro­gram­ming account­abil­ity in exchange for the tax receipt­ing ben­e­fits char­i­ties receive. Most orga­ni­za­tions had repeat­edly been through audits of var­i­ous kinds, from the basic finan­cial audits to the pro­gram­ming audits that include the organization’s pur­poses and polit­i­cal activ­i­ties. Some, but not all, had been through, and passed, three or four such audits over the decades.

Some specif­i­cally noted that going through gov­ern­ment audits on top of their own inter­nal audits is an oppor­tu­nity to improve their inter­nal account­ing, track­ing, man­age­ment, and staff-training processes, and can result in tweaks to improve their effi­ciency. Even in prepa­ra­tion for the cur­rent round of government-mandated tar­get­ing for polit­i­cal audits, the orga­ni­za­tions saw ben­e­fits in improved processes and set­ting up inter­nal peer-training programs.

Some even dis­cov­ered that their “polit­i­cal activ­i­ties” were sig­nif­i­cantly less, in fact, than they had pre­vi­ously been report­ing to CRA and their boards had responded by order­ing increased polit­i­cal activ­ity to improve their effec­tive­ness in con­tribut­ing to pub­lic con­ver­sa­tions con­cern­ing pub­lic pol­icy. Per­haps not what the cur­rent gov­ern­ment intended, but then per­haps the cab­i­net didn’t actu­ally real­ize how few resources most char­i­ties spend on polit­i­cal activities—they’re allowed 10 per­cent of their resources, but most spend between zero per­cent and five percent.

So, in a very real way, the government’s audit­ing is not likely to find many char­i­ties in violation—unless the inter­pre­ta­tion of reg­u­la­tions and def­i­n­i­tions are under­go­ing change as some char­i­ties believe it is. Despite these pos­i­tive spin-offs from prepar­ing for audits, should they have been dis­tracted in the first place? One is left won­der­ing why these audits are deemed nec­es­sary, and why now, along with accom­pa­ny­ing rhetoric por­tray­ing char­i­ties as some­how doing some­thing wrong, crim­i­nal, or even seditious.

One char­ity lawyer I inter­viewed sug­gested the gov­ern­ment does not need to take away char­i­ta­ble sta­tus from orga­ni­za­tions that it dis­likes for the audits to be effec­tive. The fear that is lead­ing to char­i­ties muf­fling their com­mu­ni­ca­tion and being dis­tracted from their mis­sion activ­i­ties in prepa­ra­tion for audits is the actual goal. In other words, quiet down and keep busy those char­i­ties whose pol­icy ideas—particularly around expan­sion of the oil­sands, pipelines, ship­ping, etc—are con­trary to those of the gov­ern­ment while those poli­cies and project approvals are firmed up.

CRA says it is not choos­ing polit­i­cally which char­i­ties to audit for polit­i­cal activ­i­ties. But the gov­ern­ment has cre­ated a fun­nel that guides CRA to char­i­ties more likely to oppose the cur­rent government’s poli­cies (i.e. that have high polit­i­cal activ­ity lev­els com­pared to other char­i­ties) and have drawn com­plaints from orga­ni­za­tions such as Eth­i­cal Oil, a pro-petroleum advo­cacy group.

Mean­while, Ter­ence Cor­co­ran speaks of those who ques­tion or write about the politi­cized audits as left-leaning “sensation-mongering writ­ers, jour­nal­ists and envi­ron­men­tal activists.” Cute, but how about such right-wing and libertarian-right com­men­ta­tors as The Globe and Mail’s Mar­garet Wente and The Van­cou­ver Sun’s Don Cayo, who have sug­gested the Harper gov­ern­ment cut it out and warned that this tar­get­ing is a dan­ger­ous prece­dent that could be used by future gov­ern­ments to clamp down on right-leaning orga­ni­za­tions? Wente and Cayo may be sen­sa­tional (and a good read, like Cor­co­ran) but they’re far from leftist.

Cor­co­ran also notes that Fraser Insti­tute has under­gone three audits in 40 years. Some in the sec­tor believe that the Fraser Insti­tute recently under­went an audit, but that it was a tra­di­tional finan­cial and receipt­ing audit rather than a “pur­pose” and “polit­i­cal activ­i­ties” audit of the kind directed in 2012 by the fed­eral gov­ern­ment. If that’s inac­cu­rate, per­haps the Fraser lead­er­ship would help set the mat­ter straight?

So far, there do not appear to be any right-leaning orga­ni­za­tions being tar­geted for political-activity audits. Nor should there be. Nei­ther for right-leaning nor pro­gres­sive organizations—other than the 800–900 annual ran­dom audits or audits trig­gered by a seem­ing prob­lem at an indi­vid­ual organization.

Mean­while, please check out my Master’s the­sis and feel free to for­ward and tweet it. And you can fol­low me on Twit­ter: @garethkirkby

NOTE: I have made minor gram­mat­i­cal tweaks to the orig­i­nal version.

I am a for­mer jour­nal­ist and media man­ager who recently com­pleted my Master’s the­sis for Royal Roads Uni­ver­sity and now work as a com­mu­ni­ca­tions pro­fes­sional. I have earned a Web­ster Award of Dis­tinc­tion, among other awards, for my reporting.

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