New advocacy guidelines a start but more needs to be done
September 29, 2003
By Nicole Zummach
For the past few years, organizations such as the Canadian
Centre for Philanthropy (CCP) and IMPACS
(Institute for Media, Policy and Civil Society) have worked hard to
improve the legislation surrounding advocacy work by charities, including the so-called 10% rule, which limits advocacy spending to only 10% of a charity's revenue. Earlier
this month, the Canada Customs and Revenue Agency (CCRA) quietly
released their new guidelines regarding political activities by registered
charities. It's a document that many hoped would introduce much-needed
changes to the way advocacy work is defined and regulated in Canada.
Some welcomed improvements
"We feel that there are certain areas where the new guidelines are an
improvement over the old," says Peter Broder, vice president of
public affairs (interim) for the CCP. "For example, public awareness campaigns
are more precisely defined in the new document and there are more generous
rules for smaller charities in calculating their political activity."
Indeed, one of the biggest changes is that the 10% rule no longer applies
across the board. Registered charities with less than $50,000 annual income
in the previous year can now devote up to 20% of their resources to political
activities in the current year. Those with an annual income between $50,000
and $100,000 can spend up to 15% of their resources on political activities,
and charities whose annual income is between $100,000 and $200,000 can
devote up to 12% of their resources. Only organizations with annual incomes
greater than $200,000 are still restricted to the 10% rule.
In addition, the guidelines provide for expense averaging so that political activity is considered for several years rather than simply looking at each year in isolation. While this is good news for smaller organizations that might not otherwise be able to effectively participate in policy debate, the changes to the 10% rule do raise some questions. "If the 10% rule is a 10% rule, then why can the CCRA in some cases say it's not a 10% rule," asks Shauna Sylvester, executive director of IMPACS. "If this is grounded in judicial precedence then why is it not consistent? Clearly, if they are able to show that they can bend the 10% rule for certain organizations then why can they not get rid of it all together? We think a much better approach is to treat charities consistently by allowing them to participate in public policy debate."
A clearer definition of political activity
Aside from re-evaluating how much charities can spend on advocacy work, the guidelines
clarify what constitutes charitable and political activity. Of particular
note is the fact that public awareness campaigns are no longer classified
as political activities, but rather as charitable activities. As well,
it is no longer considered a political activity if a charity contacts
an elected representative or public official. However, if a charity explicitly
communicates to the public that a law, policy, or decision of any level
of government in Canada or a foreign country should be retained, opposed,
or changed it is considered political, even if it does not include a call
to action.
The guidelines reiterate the fact that any organization established for a political purpose cannot be a charity. It defines political purposes as those that seek to further the interests of a particular political party; support a political party or candidate for public office; or retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country. In other words, charities are prohibited from participating in any partisan political activities, or anything unlawful. Only non-partisan, lawful activities that are connected and subordinate to the charity's purposes are permissible.
Where to go from here
There is no question that there were some modest successes in the new guidelines.
But as Broder points out, "at the end of the day we still need a legislative
amendment in order for charities to be free to speak out on issues about
which they are knowledgeable." That legislative change revolves around
the Income Tax Act, which falls under the jurisdiction of the Ministry
of Finance. "I think the CCRA has gone as far as they can administratively,"
says Sylvester. "They have worked within the ill-conceived, poorly drafted
provisions of the Income Tax Act and I think they've taken it as
far as they can but they are still restricted, so the next step is really
legislative change."
IMPACS would like to see the common law approach prevail. Currently in
Canada, the focus is on charitable activities and "we try and micromanage
each activity that a charity does and determine whether that activity
is political or not," explains Sylvester. She feels that charities should
be able to participate in activities as long as they are in pursuit of
their charitable purposes, are lawful and nonpartisan, and are controlled
by the boards of directors. "As long as those activities don't become
the organization's dominant activity, they should be able to pursue them."
IMPACS and the CCP, as well as other sector organizations, will continue
to push for changes to the Income Tax Act by raising public awareness
and through representations to government. Sylvester points out that they
do have one important document on their side. The Accord Between the
Government of Canada and the Voluntary Sector that was signed in 2001
states that charities have an important and active role to play in public
policy. Until that becomes a reality, there is still much to be done.
To view the new CCRA guidelines, visit: www.ccra-adrc.gc.ca/tax/charities/policy/cps/cps-022-e.html.
For more information about IMPACS' Charities and Democracy Project, visit:
www.impacs.org/index.cfm?group_ID=2662.
