Imagine Canada has put out a very interesting report on a survey of Canadian charities and their answers relating to political activities.  The Sector Monitor report is prepared by David Lasby of Imagine Canada and is well worth reading.  One of the conclusions was “Likelihood of reporting negative effects increased with intensity of engagement in public policy. However, while negative effects are common, this does not appear to have resulted in decreased engagement in public policy.”

Apparently 78% of Canadian registered charities reported that the increased scrutiny by CRA had no effect in curtailing their involvement in public policy activities.  Also “The percentages of charities reporting public policy activities did not change significantly between 2010 and 2015, nor did the frequency with which they reported engaging in these activities.”  

This report also confirms my concern that the real problem is not the perhaps 20 charities who are spending more than 10% but the thousands of charities spending almost nothing on political activities who should be engaged in political activities and spending significantly greater resources on allowable political activities.  Unfortunately with all the bandwidth taken up by discussions around changing the rules there will be little time to deal with real issues that charities actually have some direct control over like allocating more resources, using better GR practices, being more aware of the existing rules, etc..    

Here are some of the highlights contained in the report with my comments in square brackets and italicized:

  • Most charities are involved in some form of public policy activity.  [Public policy activity is much broader than “political activity” and includes things that CRA would consider charitable such as research or even meetings with MPs!]
  • Two thirds of charities are involved in some form of public policy activity.
  • 64% are involved in charitable activities and 31% in political activities. [if 31% of those surveyed are doing political activities then there is still a problem in that less than 1 percent of registered charities identify doing political activities on the T3010.]
  • Most charities engaging in political activities do not correctly report them on their T3010.
  • Collectively, 31% of charities engaged in political activities, but just 3% reported political activities on their T3010. [only 10% of surveyed charities that identified they did political activities are reporting that they did political activities on their T3010 – this is a major concern.  It is also shows that this is a more politically aware group completing the survey because in general with 86,000 charities only 500 report political activities on their T3010.]
  • Likelihood of correctly reporting political activity increased with level of engagement in public policy. Charities involving the Federal government in their work were more likely to report correctly. 
  • Political activities appear to be underreported largely because charities do not fully understand what they are and how they are defined.[we have discussed this issue in more detail at How accurate are the T3010 charity returns when it comes to political activities? The reason suggested by Imagine Canada is one reason but I think that it is probably more a function of charities not taking their T3010 filing that seriously in general  – because there are in fact lots of fields that are not completed properly on the T3010 not just the political activity fields.]
  • Various ways of providing information to elected representatives and officials were the most commonly reported sub-activities. More directive sub-activities were less common. However, most charities devote only modest resources to public policy. [Forget about 10% limits on resources for political activities – for most charities who are engaged in significant political activities they are spending almost no resources on them according to the T3010 filings and they should benchmark spending 1% – yes 1% should be the focus and not worry about 10% for 99.9% of charities.]
  • Nearly half of public policy charities reported engaging in only one or two subactivities – typically ones that do not require significant resources.
  • Two thirds of organizations engaging in charitable activities and four fifths of those engaging in political activities did so a few times a year or less.
  • Larger revenue organizations tended to be more heavily engaged in public policy, as do charities working in some sub-sectors.[Also charities with more staff are more likely to get involved in political activities – it is also a function of in some cases greater sophistication and having a theory of change which may highlight the importance of political activities.  It is also interesting that groups that got more government money tended to be more engage in political activities!.]
  • Charities focus most of their public policy efforts on provincial and municipal governments.[This is interesting and not discussed much. There is a fixation on political activities relating to the Federal government, especially during the Harper years, but in fact 90% of funding received by charities from government in Canada is at the provincial level and lots of issues that are very important to charities are largely dealt with at the provincial level]
  • About four fifths of public policy charities engaged the provincial government and half the federal government, with municipal governments falling in between.
  • The likelihood of focusing on particular levels of government varied according to where charities are located and what subsector they work in.[Makes sense]
  • One fifth of public policy charities reported some sort of negative effect. [This is low as the dominant narrative of the charity sector in the last few years was about political activities and the Harper overreaction and paranoia on political activities.]
  • Likelihood of reporting negative effects increased with intensity of engagement in public policy. However, while negative effects are common, this does not appear to have resulted in decreased engagement in public policy.[Not surprising – I would argue anecdotally that the amount of political activities by charities actually increased over the last few years]
  • The percentages of charities reporting public policy activities did not change significantly between 2010 and 2015, nor did the frequency with which they reported engaging in these activities.
  • However, concern about violating the rules around political activities has increased, as has the percentage of charities reporting they do not have the required skills. Charities engage in public policy primarily to raise awareness and increase support.[With CRA spending more time talking about political activities and others talking much more about political activities it is not surprising that there was greater awareness that there are in fact rules around political activities.  Despite the supposed greater concern it is not clear that there is any change in reporting of political activities either on the T3010 or in the survey.]
  • Charities’ role during elections may be greater than commonly realized.
  • Nearly a quarter of public policy charities reported engaging in public policy activities at the Federal level during the last election.[this could be a good or bad thing.  It certainly showed that charities must have viewed the election as important.  On the one hand charities are allowed to engage in political activities during an election and their involvement confirms that.  On the other hand if a charity never engages in political activities except around elections it could be a red flag potentially that there may be a partisan motive depending of course on the details of the activities.  With the heightened scrutiny of political activities around elections it is probably not a great idea for charities who are not engaged in political activities to suddenly test the waters and become involved then.]  
  • The likelihood of being active during the election increased with level of engagement in public policy

Some general comments:

1) These sort of voluntary surveys probably obtain greater feedback from those most motivated by the issues at hand so the results may be indicative to some extent of groups that have a passionate view on the subject.  Still it yields some interesting data and perspectives.

2) The report notes “As part of the rules around engagement in public policy activities, charities are required to report their political activities on the T3010 Registered Charity Information Form they must file annually with CRA. Comparing survey responses to charities’ T3010 filings, it is clear that political activities are significantly under-reported. Overall, while 31% of survey respondents engaged in political activities, just 3% of survey respondents reported political activities on their previous year’s T3010 return. Looking specifically at survey responses and reporting of individual respondents, just over nine in ten charities (92%) reporting political activities on the survey did not report them on their T3010 return.” 

3) Apparently small and big charities are more likely to correctly report political activities than medium size charities!

4) The report notes “Finally, about 1% of charities reported that they had experienced some form of active scrutiny from CRA, up to and including audits. This required significant amounts of additional staff time and frequently professional services from accountants and lawyers.”  That number is low when one thinks of all the thousands of charities that have changed their objects over the last few years (which results in CRA asking questions about activities) or the 4000 or so charities that have faced regular audits and the 60 who faced audits under the political activities audit.  

5) The report notes “Likelihood of experiencing the chill does not appear to vary much according to organizational characteristics of charities. The major exception to this general statement is that Quebec charities were substantially less likely to report negative effects than charities in the rest of Canada (see Figure 11). There is very little statistically significant variation by any of the other organizational characteristics included in the survey. Interestingly, once one controls for higher and lower levels of engagement in public policy activities, organizational size (as measured by annual revenues) appears to have mediating effects, in that larger organizations were actually somewhat less likely to report negative effects of the increased scrutiny. We suspect this is driven by larger organizations having a better sense of the rules around public policy activities and being better resourced to respond to potential negative effects.” [Is Quebec not the most progressive province? You would think that their progressive charities would have felt greater scrutiny – whether it was there or not.  These sort of questions remind me about the public's perception of crime.  It has little to do with actual crime and lots to do with media coverage and scare mongering]

6) On page 19 of the report it notes “Compensating for the methodological changes from 2010 and looking at the comparative subset of respondents, there appears to have been very little change in the level of engagement in public policy over time, at least among the populations of charities looked at. Once methodological differences are adjusted for, the percentages of charities engaging in public policy in 2010 and 2015 are virtually identical (76% 2010; 77% 2015), as are the percentages of organizations engaging in charitable (73% both years) and political (39% 2010; 35% 2015) activities (see Figure 12).” [Not much of a chill going on here.  Thankfully all the Harper cronies combined with a few environmental and other organizations could not do enough of a job of scaring Canadian charities into believing that it is very dangerous for a charity to conduct political activities.  The voices of moderation calling for charities to be engaged in political activities but to do so within the rules seemed to have won out in the end.]

7) “Looking at specific activities, the overall picture is very similar, with virtually no indications of statistically significant changes in the percentages of charities reporting each activity (see Figure 13). The only exception is a slight increase in the percentage of charities reporting hosting an all-candidates meeting (9% of charities in 2015 vs. 6% in 2010), which can easily be attributed to the 2015 survey being fielded immediately after the longest Federal election campaign in modern history. Overall, there is no evidence of a shift in the number of charities carrying out charitable or political activities, at least amongst the charities surveyed.” [my emphasis]

8) Turning to look at measures related to intensity of engagement in public policy, our findings closely parallel the pattern above, in that there are no statistically significant differences in how frequently charities reported engaging in either charitable or political activities between 2010 and 2015. Similarly, the percentages of charities that reported involving each specific level of government in their activities are essentially identical, both with charitable and political activities. What is different since 2010 is that some barriers to engaging in public policy appear to have increased. Probably the most important is concern about violating the rules for charities around public policy. Since 2010, the percentage of charities identifying this barrier as very or somewhat important has increased from 56% to 64% (see Figure 14). Charities are also more likely to report they lack the skills required to engage in public policy (from 55% in 2010 to 62%) and a lack of relevance of public policy activities to the organization’s cause (39% to 48%) as barriers. Other barriers have either not seen statistically significant changes or, as in the case of concern about losing corporate support, have receded somewhat (from 56% in 2010 to 51%). [my emphasis]

9) In the summary Imagine Canada notes “From the survey results presented above, it seems clear there are a considerable number of charities active in the public policy sphere. In fact, the number is so large—representing two thirds of charities —that engagement in public policy should probably be considered the norm for charities. Contrary to common assumption by the public and policymakers, public policy is not something practiced by a small number of charities intentionally executing specialized strategies that emphasize government relations. Instead, survey responses show that most charities are active in public policy as an adjunct to their day to day activities. They engage in only a few sub-activities and they do so relatively infrequently. Rather than being active primarily at the Federal level, where most public attention has focussed, charities are more likely to engage provincial and municipal governments. And finally, rather than seeking to drive the policy agenda and dramatically reshape it to their ends, they seek primarily to inform.”