Charities, Advocacy and Political Activities

Last fall, the Canadian Customs and Revenue Agency (CCRA) released new administrative guidelines on political activities by charities. Organizations can become registered as charities by meeting certain requirements in the Income Tax Act (the Act). In particular, they must demonstrate that they generate a public benefit. Once registered, a charity pays no income tax and is able to provide donors with the incentive of charitable tax receipts that are then used for non-refundable tax credits or deductions.

In recognition of the invaluable contribution and expertise of charities, the federal government created the new guidelines to enable charities to inform the public about certain issues and to contribute to public policy debates. Under the Act, a charity must devote substantially all of its resources to charitable purposes and activities however a small amount of no more than 10% of total resources per year, may be devoted to political activities.

So what are political activities?

Activities are considered political if a charity explicitly: communicates a call to political action; communicates to the public that government laws, policies or decisions should be retained, opposed or changed; or indicates in its materials (internal or external) that the intention of the activity is to incite or organize to pressure an elected representative or public official to retain, oppose or change the law, policy or decision of any level of government in Canada or a foreign country.

A charity may take part in these type of activities if they are non-partisan and come under the stated purposes of the charity. This means that within its 10% of allowable political activity, a charity may engage in permitted activities such as:

• Buying a newspaper ad to pressure the government
• Organizing a march or rally on Parliament Hill
• Using a mail campaign to urge supporters to contact the government
• Organizing a conference to support the charity's views.

And what are charitable activities?

The Act considers advocacy to be "demonstrated support for a cause or particular point of view". It also states that advocacy may not necessarily be a political activity if it is part of a charity's work to further its charitable purposes. For instance, the following activities are allowable within the 90% of an organization's charitable activities:

• Distributing the charity's research (online, to election candidates, etc.)
• Preparing reports to Parliamentary committees or distributing research reports to all Members of Parliament
• Giving interviews about a research report
• Joining a government advisory panel to discuss policy changes.

The guidelines are outlined in a CCRA policy statement released in September 2003 and can be viewed on the web at: www.ccra-adrc.gc.ca/tax/charities/policy/cps/cps-022-e.html.

Does this go far enough?

Many groups have said the new guidelines are still too restrictive, and several national organizations, including the Voluntary Sector Forum (VSF), the Canadian Centre for Philanthropy (CCP), and the Institute for Media, Policy, and Civil Society (IMPACS) have publicly called on Ottawa to rethink the policy. In response to the new guidelines, IMPACS and the CCP published a report in September called Charities: Enhancing Democracy in Canada, which argues charities should not be restricted in their ability to advocate for policy change and recommends a minor change to the Income Tax Act to lift the restrictions. For more information, contact the IMPACS Charities and Democracy Project, at tel: 604-682-1953 ext. 101, or email: outreach@impacs.org, or visit: www.impacs.org.