Charity Confusion a Sign of Abuse of Power

August 5, 2014 No comments Article
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The last sev­eral days have seen mul­ti­ple news reports and edi­to­ri­als in which CRA offi­cials made claims, and later revised them, about how char­i­ties are selected for polit­i­cal audits (see my post­ing on the fun­nel that the gov­ern­ment con­structed that tar­gets cer­tain char­i­ties). And then we learned that CRA blacked out key details in response to a freedom-of-information request by Pen Canada that explained to its audi­tors how to eval­u­ate a charity’s “polit­i­cal activities.”

“Pro­vid­ing infor­ma­tion about how we con­duct our gen­eral audit review could hin­der or impede our abil­ity to effec­tively carry out future audits,” CRA spokesper­son Philippe Brideau told Globe and Mail reporter Kathryn Blaze Carl­son., before claim­ing that the CRA web­site con­tains expla­na­tions of char­i­ta­ble, polit­i­cal, and par­ti­san activities.

Pen Canada exec­u­tive direc­tor Tasleem Thawar sug­gested to Blaze Carl­son that CRA should be less inter­ested in catch­ing char­i­ties break­ing the rules than in help­ing them under­stand what activ­i­ties are unac­cept­able so that they can fol­low the rules.

I think Cana­di­ans would expect that the CRA would pre­fer to share their advice to audi­tors if it helps char­i­ties stay within the roles. Seems com­mon sense to me.

In any case, the rev­e­la­tion is sadly con­sis­tent with what I found in my Master’s the­sis inter­views with 16 char­ity lead­ers and five experts. What the data sug­gests is that lead­ers are con­fused about the reg­u­la­tions and that this con­fu­sion has been going on for years. There are grey areas between char­i­ta­ble activ­i­ties and allow­able polit­i­cal activ­i­ties. And between polit­i­cal activ­i­ties and for­bid­den par­ti­san activ­i­ties. Lead­ers repeat­edly told me that they have tried using the infor­ma­tion on the web­site for guid­ance but the exam­ples that are used are “naïve” and con­fus­ing. And lead­ers told me that they have had no responses to the ques­tions they left in the sec­tion of the web­site where char­i­ties are encour­aged to ask CRA for just that.

Vet­eran lead­ers and some char­ity experts (lawyers, aca­d­e­mics, for­mer bureau­crats in the know) give kudos to CRA for hav­ing made much progress in com­mu­ni­cat­ing some reg­u­la­tions and expec­ta­tions through the web­site and in bul­letins and other exter­nal mes­sag­ing. Things were much worse before the $95 mil­lion Vol­un­teer Sec­tor Ini­tia­tive con­sul­ta­tions between the non­profit and char­ity sec­tor and var­i­ous gov­ern­ment depart­ments, includ­ing CRA. Dur­ing those con­sul­ta­tions, CRA lib­er­al­ized some of its approach to reg­u­la­tions, loos­en­ing their choke-hold on polit­i­cal activ­i­ties in 2003, for exam­ple, and nego­ti­at­ing inter­pre­ta­tions of regulations.

So, CRA has improved its com­mu­ni­ca­tions and there were signs that inter­pre­ta­tions were becom­ing more con­sis­tent. But that was before 2012 and the cur­rent round of political-activities audits, politi­cized by the cur­rent fed­eral gov­ern­ment, and the belief that new, stricter inter­pre­ta­tions of the reg­u­la­tions are emerg­ing dur­ing this targeting.

And mean­while, the grey areas remain and attempts by char­i­ties to address them with the CRA, by use of freedom-of-information requests if nec­es­sary, are not work­ing. And char­i­ties are forced to seek advice from lawyers and accoun­tants at sub­stan­tial cost, with the accom­pa­ny­ing diver­sion from their Mis­sion activ­i­ties of money and human resources. Inter­est­ingly, I found that dif­fer­ent char­i­ties were get­ting slightly dif­fer­ent advice from their lawyers about those grey areas, so clearly there is no com­plete con­sen­sus out there. And it is, of course, CRA’s job to make sure that their inter­nal under­stand­ing of the reg­u­la­tions is everyone’s under­stand­ing. Mean­while, Imag­ine Canada, the umbrella orga­ni­za­tion of Cana­dian char­i­ties, has cre­ated a use­ful infor­ma­tion sheet address­ing some of the reg­u­la­tions; but grey areas remain.

My study found a high level of con­fu­sion among char­ity lead­ers and to a lesser extent among some experts. They are con­fused about var­i­ous reg­u­la­tions, they are con­fused about the grey areas regard­ing the var­i­ous activ­i­ties. They are con­fused, anx­ious and annoyed by the tar­geted audits and the attempt to muf­fle and dis­tract them from their socially ben­e­fi­cial Missions.

They are con­fused and angry at being labelled “money-launderers,” “crim­i­nal orga­ni­za­tions,” and “ter­ror­ist orga­ni­za­tions” by gov­ern­ment min­is­ters who ought to know better—and they’re almost uni­formly smart enough to know not to pub­licly make the denial because then they fall into the trap sim­i­lar to an inno­cent insist­ing, “I do not beat my part­ner.” They have to count on Cana­di­ans know­ing that they are none of crim­i­nals, ter­ror­ists or trai­tors, and hope that peo­ple blame the gov­ern­ment for its “smear cam­paign,” as sev­eral of them labelled it.

In any case, all this con­fu­sion, mixed with fear in vary­ing doses from leader to leader, pro­foundly points to the gov­ern­ment and its tax author­ity improp­erly using its power. In the case of the tax­man, the abuse is to allow the con­fu­sion over reg­u­la­tions to con­tinue, to allow grey areas to fes­ter, to not directly address the belief among char­ity lead­ers that the inter­pre­ta­tions are shift­ing dur­ing the cur­rent stepped-up audit­ing process.

The far more trou­bling abuse of power involves a gov­ern­ment that uses fierce rhetoric that treats cit­i­zen groups as ene­mies, and uti­lizes an arm of the admin­is­tra­tive func­tions to fight its pol­icy dis­agree­ments through the threat and real­ity of CRA audits. This bul­ly­ing in the form of rhetoric and audits muf­fles and dis­tracts the char­i­ties while the gov­ern­ment pushes through major poli­cies and pro­grams with­out proper pub­lic con­ver­sa­tions. And the lack of full pub­lic par­tic­i­pa­tion in debates, includ­ing the input of the char­i­ties that are experts in their Mis­sion top­ics, dulls the very vigor of our democ­racy as well as risk­ing our future through poten­tially poor pol­icy choices.

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

 

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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‘Enemy’ Lists, Tax Audits, and Acceptable Government Actions

July 29, 2014 No comments Article
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I was reminded recently by a reader of Richard Nixon’s “Ene­mies List” that freaked out a gen­er­a­tion of US cit­i­zens who expected their politi­cians to play by the rules. The list came to light when John Dean, the for­mer White House Coun­sel for Nixon, tes­ti­fied before the Sen­ate Water­gate Committee.

The orig­i­nal list had 20 names, includ­ing actor Paul New­man, but was later expanded to hun­dreds on a “mas­ter list.” The orig­i­nal list had lead­ers of non-profit orga­ni­za­tions and unions, human rights sup­port­ers, mem­bers of the media, and oppo­si­tion politi­cians and their mon­eyed supporters.

Here’s how Dean explained the list to the committee:

This mem­o­ran­dum addresses the mat­ter of how we can max­i­mize the fact of our incum­bency in deal­ing with per­sons known to be active in their oppo­si­tion to our Admin­is­tra­tion; stated a bit more bluntly—how we can use the avail­able fed­eral machin­ery to screw our polit­i­cal enemies.

Wikipedia notes that the com­mis­sioner in charge of tax­a­tion, refused to audit the peo­ple on the list.

The reader’s note reminded me of a cou­ple of news reports from 2013 about the “enemy” list given new cab­i­net min­is­ters in the cur­rent fed­eral gov­ern­ment. A senior PMO staffer directed staffers about what to include in tran­si­tion book­lets given to new min­is­ters. Items include: “Who to engage or avoid: friend and enemy stake­hold­ers” and “Who to avoid: bureau­crats that can’t take no (or yes) for an answer.” The gov­ern­ment later con­firmed that the Prime Minister’s Office had pre­vi­ously sent an email to Con­ser­v­a­tive min­is­te­r­ial aids ask­ing for “enemy” lists.

Crit­ics, includ­ing 200 public-interest and aid orga­ni­za­tions for­mally asked Prime Min­is­ter Stephen Harper to reveal who was con­sid­ered an “enemy” on the list.

The National Post reported for­mer Envi­ron­ment Min­is­ter Peter Kent’s con­cerns with the “juve­nile” lan­guage of the lists and its obvi­ous res­o­nance with the Nixon list.

Inter­est­ingly, the National Post piece also quoted resigned Con­ser­v­a­tive MP Brent Rathge­ber, who found the lan­guage “very, very trou­bling. We can have respect­ful dis­cus­sions and dis­agree with each other with­out resort­ing to name-calling or vil­i­fi­ca­tion by refer­ring to some­body as an ‘enemy.’”

And the Post quoted Coun­cil of Cana­di­ans exec­u­tive direc­tor Garry Neil:

They don’t view us as cit­i­zens with strongly held opin­ions that come from places of prin­ci­ple. They view us as eco-terrorists. They see us stand­ing with the child pornog­ra­phers. I mean that’s the way they view politics.

Neil expected the Coun­cil to be on an ene­mies list because of its vocal crit­i­cism of pub­lic poli­cies pur­sued by the government.

Now, I’m not sug­gest­ing a direct com­par­i­son between Stephen Harper and his PMO on the one hand and the deeply para­noid psy­chosis that gripped Richard Nixon and his inner circle.

But my research did find that the gov­ern­ment is abus­ing its author­ity and oper­at­ing out­side of tra­di­tional Cana­dian polit­i­cal bound­aries. It is doing so by using admin­is­tra­tive bod­ies, in par­tic­u­lar Canada Rev­enue Agency, to muf­fle and dis­tract its crit­ics in the form of char­i­ties that have dif­fer­ent pub­lic pol­icy pref­er­ences to those of the cab­i­net. This politi­ciza­tion of the bureau­cracy is a cor­rup­tion of Cana­dian democracy.

It may not be Water­gate, but it’s beyond tra­di­tional bound­aries of accept­able polit­i­cal behav­iour. I won­der if it passes the “smell test” among citizens.

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

 

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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Political Activities by Charities Legal and Good For Society

July 17, 2014 No comments Article
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I’ve been watch­ing the com­ments sec­tions of news reports and columns run­ning on some of the larger media web­sites. And I notice a con­sis­tent piece of mis­in­for­ma­tion creep­ing in: that char­i­ties are not allowed to engage in polit­i­cal activ­i­ties. That’s sim­ply not true.

One con­trib­u­tor below Carol Goar’s excel­lent col­umn (and I say excel­lent not just because she quotes me and sends read­ers to my web­site and online the­sis, of course) of today (July 16), sug­gested that it was not the role of char­i­ties to be involved in “polit­i­cal activ­i­ties.” Those who do, sug­gested the con­trib­u­tor, “should not be sup­ported by tax­payer dol­lars via tax deduc­tions.” Fur­ther, sug­gested the writer, “there are plenty of orga­ni­za­tions out there play­ing fast and loose with our money.”

Whether or not this con­trib­u­tor is a party oper­a­tives post­ing in an effort to deflect crit­i­cism (all par­ties have their paid staff and over-enthusiastic vol­un­teers, of course), I think the point is wor­thy of direct atten­tion. Here goes:

  • Cur­rent reg­u­la­tions and inter­pre­ta­tions allow char­i­ties to par­tic­i­pate in “polit­i­cal activ­i­ties” as defined by Canada Rev­enue Agency up to a limit of 10 per­cent (20 per­cent for smaller char­i­ties) of the charity’s resources — staff and vol­un­teer time and budget;
  • This is because CRA has for some years now rec­og­nized that soci­ety ben­e­fits when charities—who are experts in their areas of work—participate in society’s con­ver­sa­tions but not as their pri­mary activity;
  • Char­i­ties are restricted to com­ment­ing on mat­ters that are in line with their offi­cially rec­og­nized “purpose”—relief of poverty, advance­ment of edu­ca­tion, advance­ment of reli­gion, or other pur­poses that the courts have upheld as an appro­pri­ate ben­e­fit to the community.

Char­i­ties are not, how­ever, allowed to par­tic­i­pate in “par­ti­san activ­i­ties” like call­ing for the ouster of the cur­rent gov­ern­ment, endors­ing spe­cific par­ties or can­di­dates and that sort of thing.

One way to think about it is this:

  • If a can­cer char­ity funds a study that finds that expo­sure to second-hand smoke is asso­ci­ated with increased rates of can­cer, it is “char­i­ta­ble activ­ity” if that char­ity holds a press con­fer­ence, announces that the find­ings sug­gest that the gov­ern­ment should out­law smok­ing in work­places. As a “char­i­ta­ble activ­ity,” the char­ity can pur­sue this approach to its heart’s content;
  • If that char­ity then sends emails to its mem­bers or tweets the gen­eral pub­lic and asks them to con­tact their MP to ask for leg­is­la­tion out­law­ing smok­ing in the work­place, they are par­tic­i­pat­ing in allow­able “polit­i­cal activ­i­ties” if the topic and com­mu­ni­ca­tion fits their “purpose;”
  • If that char­ity uses an intem­per­ate tone in crit­i­ciz­ing cur­rent gov­ern­ment pol­icy, or sug­gests peo­ple vote for another party in the next elec­tion in order to get leg­is­la­tion against work­place smok­ing, this is for­bid­den “par­ti­san activ­i­ties” and the char­ity is vul­ner­a­ble to a spank­ing by CRA or loss of its char­i­ta­ble sta­tus if there’s a his­tory of this.

I bet you can see the grey areas. Char­i­ties cer­tainly do and some are con­fused. So fac­ing a politi­cized audit­ing process, they are con­sult­ing lawyers, hold­ing sem­i­nars, care­fully mea­sur­ing their var­i­ous activ­i­ties to ensure they stay under 10 per­cent “polit­i­cal activ­i­ties,” and chang­ing the con­tent, tone fre­quency, and chan­nels of communication—all of which are a diver­sion of time and money and vigor away from the mis­sion that their mem­bers, and per­haps soci­ety in gen­eral, expects them to focus on.

And please note that the char­ity sec­tor umbrella group, Imag­ine Canada, found in a 2010 study that 37 per­cent of char­i­ties engage in “polit­i­cal activ­ity.” How do you think we got drunk-driving leg­is­la­tion, smok­ing reg­u­la­tions, and emis­sions reg­u­la­tions that reduced the acid rain destroy­ing our lakes? Though many char­i­ties dab­ble in polit­i­cal activ­i­ties, both char­ity lead­ers and indus­try experts I spoke to agreed that few come any­where near their 10 per­cent limit. The stepped-up audits, in short, are a solu­tion in search of a non-existent prob­lem; unless, that is, there’s another agenda at work on the part of elected officials.

Those grey areas I men­tioned above have been around a long time and have not been fully clar­i­fied by CRA, which puts orga­ni­za­tions under unac­cept­able stress. Per­haps senior man­darins and cab­i­net min­is­ters like it that way; I don’t know. And there’s a poten­tial loom­ing prob­lem: orga­ni­za­tions that have been going through audits, and some of which have repeat­edly passed audits in their his­tory, believe that the above def­i­n­i­tions of “polit­i­cal activ­i­ties” and “par­ti­san activ­i­ties” are being rein­ter­preted by audi­tors right now.

But here’s the nub: Some sug­gest that some of the audi­tors are inter­pret­ing any crit­i­cism of the poli­cies of the cur­rent gov­ern­ment is being seen as “polit­i­cal activ­ity.” Of course, that is absurd and against the spirit of cur­rent reg­u­la­tions and will no doubt end up in the courts if that’s where CRA is head­ing. That inter­pre­ta­tion would essen­tially move from the cur­rent “muf­fling” of char­ity voices that I found in my the­sis research to a full-fledged vir­tual “silenc­ing” of the voices of these experts. We need these experts to speak up in our national con­ver­sa­tions to ensure we make the best pos­si­ble pol­icy deci­sions for our country.

I guess we will soon see if their fears are cor­rect. Audit results are trick­ling out. Char­i­ties will undoubt­edly share their find­ings if we’re enter­ing such a period. But given that there doesn’t appear to be a deep-seated prob­lem here with regard to “polit­i­cal activ­i­ties,” why would the gov­ern­ment step-up audit­ing and accom­pany it with stri­dent anti-charity rhetoric? That will have to wait for another post.

Mean­while, check out my Master’s the­sis.

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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