Charities can lose their registered charity status if they do more than 10% political work. In fact this would be rare. CRA generally takes an “education first” approach and depending on the seriousness of the non-compliance and the charity’s willingness to bring itself into compliance would sometimes receive an educational letter or compliance agreement.
Here is an excerpt from CRA Guidance on Political Activities – CPS-022
“5. Unstated purposes and devoting more than the allowable maximum of a charity’s total resources to political activities
When a charity focuses substantially on one particular charitable activity so that it is no longer subordinate to one of its stated purposes, we may question the legitimacy of the activity at law. This is because when an activity is no longer subordinate to a charity’s purposes, it may indicate that the charity is engaging in an activity outside its stated objects, or pursuing an unstated:
• collateral political purpose; or
• non-charitable purpose; or
• charitable purpose.[Footnote 5]
In such circumstances, rather than just considering the explicit purpose of the activity in question, we will consider all the facts and determine whether it is reasonable to conclude that the charity is focusing substantially on a particular activity for an unstated political purpose.[Footnote 6]
In addition, when a charity’s purposes are clearly charitable, but it devotes more than the allowable maximum of its resources to political activities, we may consider that the charity is operating to achieve a political objective that is not stated in its governing documents, and it will consequently risk revocation.
Finally, it is important to bear in mind that some purposes can only be achieved through political intervention and legislative change. For example, a purpose such as improving the environment by reducing the sulphur content of gasoline would very likely require changes in government regulations. Generally, any purpose that suggests convincing or needing people to act in a certain way and which is contingent upon a change to law or government policy (e.g., “the abolition of” or “the total suppression of animal experimentation”) is a political purpose.”
Here is a link to CRA Guidance on Political Activities – CPS-022 http://www.cra-arc.gc.ca/chrts-gvng/chrts/plcy/cps/cps-022-eng.html
As well here is a copy in PDF of the CRA Policy Statement on Political Activities by Canadian Charities CPS-022 – September 2, 2003 so that you can download it easily to your computer.
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