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Comments on the CRA's Guidelines on Political Activities of Charities

February 14, 2017

The following is an excerpt from AFP's recommendations and comments to the Canada Revenue Agency (CRA) on the subject of the CRA's Guidelines on Political Activities of Charities, submitted Dec 14, 2016.  Read the full version, here.

For over two decades, the Association of Fundraising Professionals (AFP) has been honoured to engage at all levels of government—federal, provincial/territorial and municipal—and encourage its members and charities to proactively reach out to policy makers.

Despite the excellent work of the Voluntary Sector Initiative years ago and education materials put together by the CRA, AFP’s experience has been that most of our members—individual fundraisers and charities—are very uncertain and wary of speaking with the elected officials about policy issues affecting their missions.

Given the considerable size and impact of the sector—representing more than 160,000 organizations, employing two million Canadians, contributing 10.5 percent of the labour force and 8.1 percent of Gross Domestic Product, according to the National Survey of Nonprofit and Voluntary Organizations—this situation needs to change.

Charities are tackling a variety of social problems, issues and challenges every day and can provide a unique and insightful perspective on many proposals the Canadian government may be considering. We should not just be allowing, but encouraging, the role of charities in providing their experience and expertise on issues that coincide with their mission, programs and operations. We approach our comments from this perspective, with appreciation to the CRA for their continued outreach and work in this area, in keeping with your education strategy.

Our comments on these issues tend to be more strategic, though we do ask for clarification from the CRA on a couple of points.

Carrying out political activities

  • Are charities generally aware of what the rules are on political activities?
  • What issues or challenges do charities encounter with the existing policies on charities’ political activities?
  • Do these policies help or hinder charities in advocating for their causes or for the people they serve?

AFP’s main concern with the overall rules is the very concept of “political activities,” which is not well understood by charities, and media stories have created further misconceptions. Most people know that charities cannot support specific politicians or parties.

However, most are not aware that the “10 percent” rule – referring to the general rule that charities spend no more than 10 percent of their total resources on political activities—only applies to mobilizing the public to retain, oppose or change a law.

The vast majority of what charities do in terms of interaction with politicians, as long as it is related to their mandate, actually falls under “charitable activities” and not “political activities.” Because many are hesitant to even talk to politicians and government committees, their expertise and perspective—taken from experiences on the “front lines” of addressing social issues—are often not being taken into account in policy decisions that affect them.

The cost of non-involvement is that the best policy options may not be considered. Consequently, we urge the CRA—working in partnership with the charitable sector— to demystify what charities are allowed to do in terms of communicating with elected officials to advance their missions and causes through public policy.

We believe a critical challenge in encouraging greater charity participation in public policy is the nomenclature used by the CRA in categorizing various activities under Policy Statement CPS- 022. “Prohibited activities” are obvious and straight-forward—actions that charities cannot undertake. The same is true of “charitable activities.” But the term “political activities” is problematic. “Political” for many people refers to politics and political campaigns—exactly the things in which charities are prohibited from engaging. As a result, charities tend to shy away from even activities that are considered “charitable activities” and allowed by the CRA.

This situation is not just damaging to charities but to the entire policy process, as we note again that charities have unique expertise and perspective that can be invaluable in developing effective laws and regulations. We would also add that in our discussions with charities and member organizations, we found that some organizations and individuals were wary or concerned about contacting CRA directly about political activities and what is deemed charitable, permissible and prohibited. They were fearful that they might be identified by the government as a possible “bad apple” or being placed on some “blacklist” of organizations that would be scrutinized more closely because it was considering getting more engaged in public policy.

We strongly urge the CRA to make clear in its guidance, examples and other searchable resources that simply asking about these guidelines and policies, and engaging in political activities and the public policy process, does not in any way subject the organization to greater scrutiny and oversight. We wholeheartedly agree that the CRA must perform its oversight function and respond properly if a charity engages in prohibited activity or spends too many resources on political activity. But charities must be confident that simply engaging in charitable or permitted activities will not run them afoul of the CRA.

Recommendations

  • Language should be reframed to encourage, not restrict, engagement with elected officials. At a minimum, the current category of “political activities” should be changed to a term that is less confusing, does not have a negative connotation for charities and encourages charities to engage with elected officials and other policy makers. AFP would recommend “public advocacy” as a possible name, but we would also encourage CRA to reach out to the sector to see what language would encourage more engagement.
  • The CRA should explicitly state that seeking information about this guidance and rules for getting engaged in the public policy process will not subject the organization to additional scrutiny beyond what the rules call for and the information charities are required to provide to the government.

Read the full version here.



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