1 May 2012

Charities should not fear Harper bluster;
have a right to use 10% for political work

The Harper government seems to have scared the bejeezes out of many charitable organizations about how they can spend their money.

But much of it was bluster, and when you check the actual changes, very little is different and registered charities can still campaign and lobby on behalf of the issues they care about.

The Conservatives used the recent budget to intimidate and threaten charitable organizations, mainly those working in the environmental sector, to stay strictly within the regulation that says they can devote  a mere 10 per cent of their total resources on political campaigning.

The government’s decision to allocate $8-million to make sure that charities do not exceed their 10 per cent limit is, in reality, just an attempt to intimidate a handful of environmental groups. This becomes obviously clear from the results of a Canadian Press study of the Canada Revenue Agency's (CRA) charities database. It found that only 450 of the 85,000 charities registered in Canada reported spending money on political activities.

When you do the math, it amounts to less than one per cent of all charities reported any political activity, let alone get close to the 10 per cent limit. It is possible, but unlikely, that the actual number of groups allocating resources to political activities could be higher, since charities self-report to the CRA.

Limits do not apply to non-profit groups
The 10 per cent rule allies only to charitable organizations that have the ability to issue tax receipts. Non-profit groups and citizens’ organizations of all stripes are permitted to criticize the government as much as they wish.

The Collective Publishing Company PC Magazine provides a good description of the current situation:

“Charities can dedicate 10 percent of their total resources —including a volunteer’s time—to supporting or opposing a government policy.  It cannot, however, directly support a party or politician.  Charities can typically advocate for more funding on a particular health issue or changes to crime legislation that benefits a victim of a crime, and they can lobby and present at public hearings on environmental issues or oppose the rights of women’s reproductive choices, all the while only using 10 percent of their total resources for these purposes. . . . .

“If a charitable organization exceeds the 10 per cent rule, then it can be sanctioned by having its tax receipting privilege suspended for one year.  This suspension rule will also apply to those organizations that inaccurately report their advocacy activities.”  No legitimate Canadian charity has ever lost its tax status for exceeding the 10 per cent rule.
(I have since learned that Revenue Canada waged a long war with Greenpeace Canada over the group's activities, starting in 1989 and ending in 1999, stripping the organization of its tax status. NF)

When you sort through the rhetoric, all of the Conservative b.s. is obviously aimed at trying to intimidate a handful of environmental groups that Harper believes might threaten the development of tar sands and other energy projects in the West.

Charities seem afraid to engage the government
Unfortunately, many Canadian charities – perhaps because of the mere existence of the 10 per cent rule – seem to be afraid to even explore the possibility of engaging in political activities. Other charities do not see political campaigning as being an important part of their organizational program.

But these attitudes need to change.

Input at the political level by all kinds of organizations plays a huge role in determining government policies and activities. Otherwise, corporations would not employ at least 3,700 lobbyists in Ottawa – about 10 for every Member of Parliament.

Even so, campaigning to pressure the federal government does not work for all organizations in all of their program areas.

Charities should sit down and review their programs to assess whether political campaigning would advance their goals in any areas. Then staff members can discuss the various ways they could approach the government – perhaps with advice from a person who has campaigning experience.

To make sure that any strategy a group develops is acceptable, they can check out an excellent website that specializes in charity law. There is a huge amount of information available on the website Canadian Charity Law, a project of the law firm Blumberg Segal LLP (Blumbergs), which is based in Toronto.

Further, to be totally safe, organizations should consult with a lawyer who is a charities expert. There are several in the country.

In the end, charities would not be wise to push the envelope and attempt to devote the full 10 per cent of the limit to political work. Instead, perhaps seven percent would be safer.

Many years ago Canadian Parliamentarians gave charities the right to, within reason, express their political views. Charities must not give up this long-held right.
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  1. Interesting. Of course, Greenpeace gave up on charitable status while Chretien was in charge, and a quick Google turned up a quote attributed to David Suzuki in 2007:

    "I am being hounded by the current government because I have a foundation that has my name and so they're trying to take away my charitable (status)," Suzuki said in a speech last week. He told the transit trade group he had to preface his speech with a tax-auditor-saving caveat. "Everything I say is my personal opinion, has nothing to do with my foundation." (from a Judi McLeod column).

    So maybe the Harperites are just less subtle in painting those who would protect the environment for future generations as terrorists.

  2. I admire the comment respecting the Harpsicle (my own term for the PM) being less subtle than anyone else as though this is either news or a reason to tolerate their churlishness. Has to be in the running for understatement of the year. Suzuki should not be taken as a benchmark for all environmental charities where there is a truly large spectrum offering choice and diversity. Criticism itself is the tool for creating better outcomes. Jim and Steve have tempers. Chriet had a temper. Sometimes anger serves to emphasize a point but alas it is always short term. I like the idea of the Harpsicle being short term though. Rage on!

  3. Another aspect of this dialogue is the 'foreign money' that the Harperites are whining about.

    There doesn't seem to be any hand-wringing about the number of foreign nationals/companies putting money into exploiting our various resources. It would seem that it's okay to exploit these resources but not to protect the environment they will be destroying. Curious approach, but completely in line with the rampant greed that is being encouraged.

    Of course the offshore investors/contributors do not receive any tax breaks for their contribution to environmental groups (the only such groups that I'm aware of that receive said monies). So presumably they can use this money to lobby for the protection of the various environments that are under assault. And they can share it with other groups and it shouldn't be counted by CRA as it is not taxpayer supported like donations from Canadians would be.

    Interestingly, the companies that are attending to the extraction of resources like the Alberta tar sands *do* get tax breaks from the government (and this comes from Joe/Jane Taxpayer). Millions of dollars of tax breaks. And yet they lobby government for legislation favourable to their interests. Obviously, following the Harper logic, this should also stop.

  4. Thanks for writing this Nick.

    It is likely true that from a legal point of view, nothing much has changed but we all know that it is not fun to get on the wrong side of CRA. They have a lot of discretion to make an individual uncomfortable and that is equally true of charities.

    They need to have some spunk here for sure but I would not blame many for feeling anxious. There is also a lot of veiled and otherwise targeting of Tides Canada which is a fine organization. It would be a shame if they were harmed in this.
    The previous comments on foreign funding for those other points of view is spot on IMO.

  5. "If you haven't any charity in your heart you have the worst kind of heart trouble" to cure it Help people, let's unite for one good cause, be a volunteer"save live"!

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