Topics: What's New from the Charities Directorate of CRA, Canadian Charity Law, Political Activities and Canadian charities
I recently wrote an article for Hilborn entitled "CRA consultation on political activities – to submit or not to submit?" Here is the text of the article:
CRA consultation on political activities – to submit or not to submit?
The Canada Revenue Agency has asked the Canadian public for their views on Canadian charities and political activities in a recent consultation. Essentially, CRA is asking the public for feedback on their awareness of the political activity rules, challenges with the rules and whether there should be new rules.
Is this consultation a good idea?
I am generally in favour of consultations because I think that government works best when it is informed broadly of stakeholder concerns.
On the other hand, I have some concerns about this consultation.
The current Federal government is seemingly consulting on everything. Will this consultation result in a lot of organizations spending lots of precious resources on the political activities consultation? Will some people come away from the consultation process thinking these issues are so complicated that perhaps we should avoid political activities altogether?
I am also worried, after three years of having the political activities issue be one of the central regulatory issues covered by the media relating to charities, that we will have another 3 to 5 years of focus on political activities. I consider this to be a disaster for the PR of the charity sector. There are lots of problems that charities have and even if we can all agree there is a problem we don't necessarily want to spend five or six years discussing it. For example, we understand that fraud and embezzlement is a problem within the charity sector; but who would want that to be the number one issue that charities and the media are discussing on a day-to-day basis!
What should charities do about the consultation?
First, does your charity have a policy on when it engages in political activities? Does your charity do political activities? Is your charity concerned that it should be able to do political activities? Does your charity (even if it does not do political activities) want other charities to be able to do political activities? Does your charity think that it is necessary to comment on this consultation?
Second, do you actually understand the issues at stake? Are you familiar with the rules as they are currently established? What is the position that your charity is going to take? Do you understand the pros and cons of various potential changes? If not, and you respond to the consultation, you could undermine the credibility of your organization.
For most charities it may be helpful to explain in simple terms why having the ability to do political activities is helpful for you to carry out your mission and benefit society. Then it would be beneficial to state what you like about the current rules and what you want changed.
There is a danger that the feedback the CRA will get will be on the one end that charities should not be involved in any political activities of any kind to on the other end that there should be no limits on the political activities that Canadian charities have.
Unfortunately, those with the most ardent views tend to actually make submissions. In many cases, those who like the rules or who want to have minor adjustments to the rules are probably going to sit back which is unfortunate.
Avoid certain mistakes
The biggest mistakes a charity can make in this process is advancing ideas that they don't understand or even worse that if implemented could actually undermine their work. Don’t get sucked in to commenting on more than you and your charity are knowledgeable about and comfortable with.
Don’t cut-and-paste certain themes or boilerplate from other organizations. Rather, focus on coming up with something that reflects your own experience and not that of a government relations committee of an umbrella organization. For example, I have seen charities who spend far less than 1% of their funds on political activities arguing that the 10% limit be raised because it hinders their political activities. Does not make a lot of sense.
Focus on what is most important and don’t create a laundry list of possible ideas without carefully considering the implications of these proposals.
The danger for the sector
My concern is that there is no quicker way for the reputation of the charity sector to plummet than for a small number of charities to get highly involved in partisan political activities. We do not want the high degree of trust that charities enjoy (with about a 77% of the public trusting charities) to erode to the low degree (about 15%) enjoyed by Federal politicians!
There are politicians who want charities to be involved in partisan political activities because they think that charities will obviously support their work and candidacy, unconcerned or unaware of the problems that would cause for the charity.
The real problem
Fundamentally, the problem we have with political activities and Canadian charities is that Canadian charities don't understand the importance of political activities, often they don’t even know what their legal objects are, they don't invest enough resources in properly dealing with political activities, they are afraid to raise certain issues for fear of offending certain stakeholders, etc. These are real issues that cannot be solved by regulatory changes and many in the sector don’t want to discuss them.
There is a lot of room for Canadian charities to carry out political activities. Don't forget those rules and parts of the guidance that you like because if all you write about are those things you don't like, you might one day end up getting some of the things you want but losing some of the things you have.
You have until November 25, 2016 to put in your submission or not. You can email CRA at .
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario. He can be contacted at To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit www.canadiancharitylaw.ca. www.globalphilanthropy.ca or www.charitydata.ca
This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.
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Mark Blumberg is a partner at the law firm of Blumberg Segal LLP in Toronto and works almost exclusively in the areas of non-profit and charity law.