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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Government Rhetoric Frames Charities as Criminals — and Worse

July 11, 2014 No comments Article
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Up to 10 per­cent of the resources—money, peo­ple, time—of a Cana­dian char­i­ta­ble orga­ni­za­tion can be devoted to what reg­u­la­tions call “polit­i­cal activities.”

Repeated stud­ies show that the aver­age is far below this, and that many char­i­ties do not par­tic­i­pate in polit­i­cal activ­i­ties. But a 2010 sur­vey by Imag­ine Canada, the umbrella orga­ni­za­tion of char­i­ties, found that 37 per­cent of char­i­ties actu­ally par­tic­i­pated in some form of “polit­i­cal activ­ity,” com­pared to the one per­cent of orga­ni­za­tions that actu­ally declared in their tax returns that they had done so, as found in a 2012 study by Cana­dian Press.

The Imag­ine Canada study has cred­i­bil­ity because it asked char­i­ties to report their var­i­ous kinds of com­mu­ni­ca­tions, and then the researcher sorted through them to dis­cover which met the government’s def­i­n­i­tion of “polit­i­cal activities.”

That’s a mas­sive dis­crep­ancy. And prob­a­bly the result of con­fu­sion in the char­ity sec­tor about what kinds of com­mu­ni­ca­tions are con­sid­ered accept­able. That con­fu­sion may be exac­er­bated, at least in the pub­lic mind, by fed­eral cab­i­net min­is­ters as far back as 2012 fram­ing polit­i­cal activ­i­ties as some­thing unde­sir­able, and inap­pro­pri­ate for orga­ni­za­tions that can offer donors a receipt allow­ing a tax deduc­tion. The rhetoric ramp­ing up to the audits of “polit­i­cal activ­ity” spoke of crim­i­nal orga­ni­za­tions, ter­ror­ist orga­ni­za­tions, money laun­der­ing, and rad­i­cal ide­o­log­i­cal agendas.

The pub­lic, and by exten­sion char­ity lead­ers, can be excused for think­ing that “polit­i­cal activ­i­ties” occur when you rec­om­mend that cit­i­zens vote for a spe­cific party or can­di­date in an elec­tion, or inap­pro­pri­ately par­tic­i­pate in a polit­i­cal party’s event, or get really per­sonal in crit­i­ciz­ing a gov­ern­ing party or oppo­si­tion politi­cian. If that’s what was going on, who wouldn’t want char­i­ties audited, caught, and spanked?

But that’s not Canada Rev­enue Agency’s def­i­n­i­tion of “polit­i­cal activ­i­ties.” Under the reg­u­la­tions, an orga­ni­za­tion can seek to pres­sure the gov­ern­ment about an issue cen­tral to the charity’s offi­cial pur­pose (Canada’s four allow­able char­i­ta­ble pur­poses are alle­vi­at­ing poverty, advanc­ing edu­ca­tion or reli­gion, or other pur­posed ben­e­fi­cial to the com­mu­nity). Pres­sur­ing gov­ern­ment is fine so long as the char­i­ties do not get par­ti­san or exceed 10 per­cent of their resources. So, yeah, they can advo­cate for their point of view as experts in an area, and should pre­sum­ably be able to do so with­out harass­ment. And if the char­ity con­ducts a study, and then speaks of the rec­om­men­da­tions of the study, that’s not even con­sid­ered polit­i­cal activ­ity under the reg­u­la­tions, but rather “char­i­ta­ble activ­ity” and so they can do it with­out limit. Or at least these are what the char­ity “experts” I spoke to see as the dif­fer­ence between char­i­ta­ble, polit­i­cal, and par­ti­san activities.

Clear? Well, there are indeed grey areas and one of my research find­ings is that, despite mak­ing some progress on this front, CRA needs to fur­ther clar­ify these. Instead, some lead­ers say the CRA is inter­pret­ing more strictly. Whether the inter­pre­ta­tions are in flux will become clear as the audits now under­way come to fruition.

In any case, as a researcher the ques­tions that I find most inter­est­ing include why the gov­ern­ment rhetoric seemed cal­i­brated to cause con­fu­sion, to frame as crim­i­nal or un-Canadian some orga­ni­za­tions that were work­ing within the rules as they know them. Why were mil­lions of dol­lars sud­denly needed for audit­ing char­i­ties? What char­i­ties are being audited? What’s the affect on char­i­ties that advo­cate on pub­lic pol­icy issues? Most impor­tantly: what’s in it for the gov­ern­ment, why this, why now, and what does it tell us about the vital­ity of our democracy?

But more on that next posting.

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 works as a com­mu­ni­ca­tions pro­fes­sional. I have been awarded a Web­ster Award of Dis­tinc­tion, among other awards, for my reporting.

Categories: Uncategorized