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