Topics: News, What's New from the Charities Directorate of CRA, Canadian Charity Law, Ethics and Canadian Charities
The Charities Directorate has recently put up new webinars dealing with political activities. Charities are allowed to conduct political activities but there are rules and limits around how that should be done. These webinars will help charities understand CRA’s views on what is a political activity, what kinds of political activities can charities be involved with and the restrictions on registered charities. Also I have reproduced the transcripts of these presentations which some may prefer to review.
Here is a link to the webinars:
Also here is the transcript of the 4 webinars on political activities produced by the CRA:
Segment 1: Key message, Charities must be non-partisan and limits on a charity’s non-partisan political activities
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Welcome to segment 1 called “Key message, Charities must be non-partisan and Limits on a charity’s non-partisan political activities”, part of the “Political activities (Policy statement CPS-022)” webinar.
This webcast is a recording of a webinar that occurred on June 25, 2013. This session is no longer live. If you have any questions, please call our client service at 1-800-267-2384 and an agent will be happy to help you. Thank you very much and I hope you enjoy this webcast.
My name is Diana Laing and I’m from the Charities Directorate at the Canada Revenue Agency.
To begin, I’d like to provide some context for the regulation of charities in Canada.
Charities are registered and regulated under the Income Tax Act, at the federal level, by the Canada Revenue Agency.
The Charities Directorate is the part of the Canada Revenue Agency that is responsible for administering the provisions of the Income Tax Act that relate to charities.
The Income Tax Act allows for the registration of charities, which provides certain privileges: exemption from income tax, and the ability to issue income tax receipts to donors.
However, along with these advantages come a number of restrictions on what, and how a charity can devote its resources, including restrictions on the use of a charity’s resources on political activities.
A failure to observe these limits can have serious consequences for a charity, up to and including loss of its charitable status.
These restrictions are explained in detail in the CRA’s policy on political activities by registered charities, Policy Statement CPS-022, Political Activities.
This presentation is divided into seven relatively brief sections, each of which deals with a topic related to political activities and charitable registration.
There is more detail on each of these topics in our policy on political activities, CPS-022, but these sections cover the core requirements for charities that carry out political activities.
The first four sections are really the heart of the political activities policy, dealing with the legal limits on political activities, and their definition.
If a charity is familiar with the information in these first four sections, there is a good chance it will be able to comply with the Income Tax Act when it carries out political activities.
The fifth section deals with a charity’s tracking of the use of its resources for political activities, so that it can assure itself, as well as show to the CRA, that its political activities comply with the requirements of the Income Tax Act.
The sixth section addresses representations to government, which is a more specialized issue, but also is the only exception to the definition of a political activity, so we will discuss it in some detail.
The final section very briefly discusses personal political activities carried out by representatives of a charity.
Before we begin discussing any topics in detail, I’d like to first make sure from the very beginning that the key message of this webinar is clear: in short, a charity can carry out a small amount of political activities, as long it always stays within the limits set by the Income Tax Act.
Those limits are, as a very brief summary, that a charity’s political activities must be completely non-partisan, undertaken only to help support or further a charity’s charitable purposes, and always remain a minor focus of the charity.
There is, of course, much more detail to add to each of these points, which we will explore in the rest of this webinar.
One of the most critical requirements for a charity’s political activities is that they must always remain completely non-partisan, or politically neutral.
This is because the Income Tax Act requires that a charity never use any of its resources to support or oppose any political party or candidate for public office, whether directly or indirectly.
It does not matter whether it is a Canadian political party or candidate, or a political party or candidate of another country.
An activity that opposes or supports a political party or candidate is usually called a partisan political activity.
The definition of a partisan political activity is very broad, including both direct and indirect methods of support, which means it can encompass almost any type of activity.
Direct support could include, for example, providing a charity’s resources for the use of a political party or candidate—one straightforward example is a charity giving money to a political party or candidate, or allowing a party or candidate to use the charity’s office space for free.
Indirect support could include, for example, a charity that puts a link on its website to a candidate’s website; while the charity might not be saying “vote for this candidate,” the link could be considered an attempt to get more visitors to the candidate’s website, and therefore help that candidate in the campaign for public office.
More examples of activities that the CRA would consider to be partisan political activities could include, but are not limited to, the following:
Endorsing a candidate: It is prohibited for a charity to suggest that it supports or approves of any candidate for public office, whether at the federal, provincial, or municipal level.
Suggesting people should vote for a candidate or party: It does not matter whether this is done directly or indirectly; an example of an indirect suggestion could include a charity that, during an election period, distributes to voters a pamphlet that highlights a certain political party’s successes and achievements over the past few years, implying they are a successful or effective party that people should vote for.
Publishing comments that support or criticize a political party or candidate would be partisan, as well as providing links that direct a reader to a third party’s supportive or critical comments.
Paying for one of its employees, volunteers, directors, or other representatives to attend a fundraising event for a political party; this includes reimbursing a representative for attending a fundraiser.
Although charities must always be non-partisan, a charity can still make its views known about a certain issue or matter of public policy, even if that policy is supported or opposed by a political party or candidate.
In such a case, the charity has to be careful to confine its support or criticism just to the policy itself, and never support or oppose the candidate or political party.
For example, a charity is registered to promote public safety. It supports a policy based on reliable research that seeks to reduce the provincial speed limits by 10km/hour to reduce the risk of serious accidents. Political party XYZ supports another policy that seeks to raise the provincial speed limits by 10km/hour to ease traffic congestion.
The charity could, as a political activity, support its policy that seeks to lower speed limits, explain why it would help residents of the province, predict positive outcomes, and otherwise support the policy. The charity could also oppose Political Party XYZ’s policy that seeks to raise the speed limit, arguing that such a policy would be dangerous, explaining the risks, predicting costs and drawbacks, and otherwise opposing the policy. As long as the charity restricted its comments to the policy itself, and did not explicitly connect its views to Political party XYZ, it would likely be carrying out a non-partisan political activity.
The charity would be carrying out a partisan political activity if it carried out activities such as:
1.making statements such as “Political party XYZ is putting lives at risk with its short-sighted policy”;
2.publishing or reprinting partisan statements from third parties, such as “Respected traffic analyst Jane Smith said ‘Political party XYZ is playing Russian Roulette with drivers’ safety”;
3.or hosting or allowing partisan statements on its website such as “The party that supports this policy is the worst party in this province’s history.”
Another topic that can raise the question of whether a charity is carrying out a partisan political activity is distributing the voting record of elected representatives on an issue that is related to a charity`s charitable purposes.
This can be done as an acceptable, non-partisan activity. However, the charity must be careful to provide information on the voting record of all the elected representatives of the federal government, or provincial or territorial, or municipal governments.
If a charity were to single out the voting record of any elected representatives or political parties, whether to support or oppose that representative or party, it would be carrying out a partisan political activity.
For example, a charity is registered to assist people with substance abuse issues. An election is being held in the province, and one of the issues being debated as part of the election is funding for substance abuse programs in the province.
The charity researches and then releases the voting record only of the member of the legislative assembly (MLA) of the riding the charity is located in, showing the MLA has consistently voted against increased funding whenever the issue has arisen in the past. In this case, the charity is carrying out a partisan political activity by singling out this voting record of the MLA.
If the charity released the voting record of all the members of the legislative assembly on the issue, to inform the public of how all MLAs and political parties have voted in the past, this would probably not be a partisan activity. The charity could not, of course, suggest how people should vote based on those voting records.
The provisions of the Income Tax Act provide charities with a number of tax privileges, such as exemption from income tax and the ability to issue official donation receipts.
However, the Income Tax Act also restricts how a charity can use its resources.
Those restrictions include limits on the use of a charity’s resources for political activities—this means that a charity is not free to pursue any political activity it wants, or to use as much of its resources for political activities as it wants.
A charity that carries out political activities that exceed the limits of the Income Tax Act could lose its charitable registration.
A natural question regarding the restrictions on a charity’s political activities might first be: “How much political activity can a charity carry out?”
The Income Tax Act requires a charity to devote substantially all of its resources to charitable activities if it wants to carry out political activities, and the CRA typically interprets substantially all to mean 90%.
The term resources is not defined in the Income Tax Act, but we consider it to include the total of a charity’s assets, which includes its financial assets, as well as everything the charity can use to further its purposes, such as its staff, volunteers, directors, premises, and equipment.
This means that a charity can use 10% or less of the total amount of all its various types of resources for political activities. Section 9 of the CRA’s policy on political activities, CPS-022, also describes some exceptions to this rule that may allow some charities to devote more than 10% of their resources to political activities, in certain specific circumstances.
A charity`s political activities must also be connected.
Connected, sometimes also called ancillary, means a political activity relates to and supports a charitable purpose, and is a reasonable way to achieve that purpose.
For example, a charity might be registered to relieve poverty by operating a food bank.
In addition to its usual activities of collecting supplies and distributing food to those in need, the charity might also call publicly for an increase in the provincial minimum wage. This would likely be considered connected to its charitable purposes.
But that same charity could not devote its resources to calling for a new defence policy for Canada, since this does not relate to its charitable purpose of relieving poverty.
A charity’s political activities must also be subordinate or minor in scope compared to its charitable activities.
This is a separate requirement from the substantially all requirement described on slide 10, which generally requires a charity to devote at least 90% of its resources to its charitable activities if it carries out political activities.
The subordinate requirement might be seen as more of a qualitative test rather than a quantitative test—it isn’t necessarily about how much resources a charity is using for its political activities, but the relative importance of those political activities, their prominence, or the emphasis the charity places on them, compared to its charitable activities.
For example, a charity is registered to advance education by providing scholarships. It also carries out the political activity of organizing public pressure on the provincial government to make university tuition free for students from low-income families.
To carry out this political activity, the charity might use a number of methods that consume only a relatively low amount of resources, such as by posting notices on its website, distributing social-media messages, or having volunteers distribute leaflets and petitions.
Depending on the exact facts of the case, the charity could well devote very few resources to this political activity, and therefore meet the substantially all requirement. But, if the charity still puts too much emphasis on these political activities, compared to distributing scholarships, it would fail to meet the subordinate test.
For example, if the charity’s involvement in political activities caused it to delay processing applications for scholarships, or distributing those scholarships, or if the charity gave out fewer scholarships than it planned, these might be signs or indicators that its political activities have assumed too much importance for the organization, and are no longer subordinate to its charitable purposes.
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Welcome to segment 2 called “Four types of political activities, Charitable vs. political activities”, part of the “Political activities (Policy statement CPS-022)” webinar.
The CRA’s explanation of what it considers to be a political activity is described in section 6.2 of our policy on political activities, Policy Statement CPS-022.
Often, when political activities are discussed in the media or other venues, they are described in very broad and vague terms.
For example, a newspaper article might state that charities in Canada carry out advocacy, lobbying, or political activities without necessarily defining what those terms mean.
But, for the CRA, the only activity that fits the description of any of the four types of political activities in our policy is a political activity (with the one exception of representations made directly to a government—see section 7.3 of our policy on political activities, CPS-022)
This slide shows the first type of political activity—a charity must explicitly communicate a call to action, which means encouraging the public to contact an elected representative or public official in order to try to retain, change, or oppose a law, policy or decision of any government.
This statement contains a lot of information. Before I provide an example of this type of political activity, I’d like to take a minute to go through all the various parts of this sentence.
The first part of the sentence refers to laws, policies, and decisions. This means, in summary, that political activities involve much more than just trying to change a law.
Political activities also include actions aimed at government policies—for example, it could include a municipal government’s policies on land use within its city’s boundaries, as well as government decisions, for example, this could include a decision by the federal government on which company to buy certain supplies and equipment from.
And, a political activity includes more than just seeking to make a change—it includes attempts to retain (for example, making sure a law, policy, or decision remains in force), or oppose (that is, trying to eliminate an existing law, policy, or decision, or trying to make sure one is not passed).
Finally, political activities are not restricted to the Canadian government. A charity is carrying out a political activity if it tries to influence the government of any foreign country, and also any level of government, whether municipal, provincial/territorial, or federal.
Returning to this first type of political activity, an example could be a charity that is registered with the charitable purpose of helping refugees who have arrived in Canada. The charity may organize a march on Parliament Hill, where the director makes a speech and calls on members of the public to contact their members of Parliament to urge reform of legislation related to refugee status. This would be a call to political action that is seeking to change legislation in Canada, at the federal level.
The second type of political activity is an explicit communication to the public that a law, policy, or decision of any level of any government should be retained, changed, or opposed.
This kind of communication could take many forms, such as articles posted on a charity’s website, a message distributed through an electronic newsletter, an advertisement in a print newspaper, or comments made through social media sites such as Facebook or Twitter.
For example, a charity may be registered to relieve conditions associated with aging by providing services for senior citizens in a particular city. The charity learns that the city’s municipal government is planning to cut costs by cancelling some bus routes that many seniors depend on. The charity begins a campaign to communicate to the public that this decision should be reversed, by distributing leaflets, posting flyers, and taking out advertisements in the local newspapers.
The third type is an activity where a charity indicates in any of its materials that the intent of the activity is to incite, or organize to put pressure on, an elected representative or public official in order to retain, change, or oppose a law, policy, or decision of government.
The term materials is defined by the CRA very broadly. Materials can include internal or external publications, documents, messages, or any other records. For example, a charity might indicate the intent of an activity is to pressure the Prime Minister to change a law in a publically distributed newsletter, or in an email sent internally between two directors of the charity. Either would make the activity a political activity.
The nature of the activity itself has no bearing on this type of political activity. An activity could appear to be entirely non-political in its nature, but if any external or internal material explicitly indicates the intent of the activity is to incite, or organize to put pressure on, a government to retain, change, or oppose a law, policy, or decision, then the activity becomes a political activity.
For example, a charity may be registered to promote health by providing assistance to people with high blood pressure. The charity posts articles on its website warning of the dangers of high salt levels. These articles appear to be merely an effort to inform Canadians about how to make their diets healthier. But, in the minutes of a meeting by the directors of the charity, it is acknowledged that the intent of posting these articles is to incite readers to contact their member of Parliament to amend the regulations regarding salt levels in food. In this case, the activity is a political activity.
The fourth type of political activity is a gift from a registered charity to another qualified donee that is made to support the recipient`s political activities.
The definition of qualified donee is specific, and you can find it on the CRA website. In summary, a qualified donee is an organization that can issue a receipt to a donor, which can be used to reduce the donor’s Canadian income tax.
Canadian registered charities make up the majority of qualified donees, but there are other kinds of organizations that are also qualified donees, including a registered Canadian municipality, Her Majesty in right of a province or Canada, the United Nations, and a few other types of organizations.
It is the intent behind the donor charity’s giving of a gift that always decides whether the giving is a political activity, and never how the gift is used by the recipient.
For example, a charity may give a $5,000 gift to another Canadian registered charity. The donor charity tells the recipient charity that $2,000 of the gift is intended to support the recipient charity’s political activities.
Regardless of what the recipient does with the money, the $2,000 part of the gift is always a political activity for the donor charity, and reported as such on its annual information return—it doesn’t matter if the recipient uses all of the gift for political activities, uses none of it for political activities, or never uses any of the gift at all. The donor charity must report the $2,000 as an expenditure on political activities in all the appropriate sections of its Form T3010, Registered Charity Information Return.
In this section, we will discuss the difference between charitable activities and political activities.
The words activity and purpose are important ones for the CRA.
Generally, a purpose is an aim or goal of an organization. An activity is how it accomplishes that aim or goal, the steps it takes.
Under Canadian law, a charitable activity is generally an activity that directly furthers a charitable purpose.
A charitable purpose is a purpose that falls under one of the four categories of charitable purposes identified by the courts: relief of poverty, advancement of education, advancement of religion, and a final, fourth category that includes charitable purposes such as relief of conditions associated with aging, protection of the environment, and the promotion of health.
To be registered as a charity under the Income Tax Act, an organization must only have charitable purposes.
To pick a relatively straightforward example, a food bank might be registered as a charity. Its charitable purpose would likely be something along the lines of relieving poverty by distributing food to those in need.
Its charitable activities would probably be to lease or rent a building, collect donations of money and food, recruit volunteers and hire staff, and distribute the food to those in need.
A political activity is any activity that meets the definition of a political activity in the CRA’s policy on political activities, CPS-022 (with one exception, making representations to government, as described in section 7.3 of CPS-022).
Some charities have argued that because an activity that meets the definition of a political activity will have a highly beneficial result, or is particularly necessary or urgent, it must therefore be charitable, rather than political.
However, the Canada Revenue Agency considers any activity that fits the description of any of the four types of political activities to be a political activity, however beneficial the results of the activity might be, or how sincere the beliefs of the charity.
For example, a charity is registered to provide relief of the conditions associated with aging, by providing services and facilities aimed at seniors who need help. The charity learns the city plans to cut bus service, and these cuts will eliminate a number of routes many seniors depend on to travel within the city. The charity undertakes a political activity to put public pressure on the city council to reverse the cuts.
The charity might very reasonably see their political activity to try to reverse the decision as one that is critical to health and lives of a number of seniors. They might therefore assume this activity not as a political activity, subject to the limits in the Income Tax Act, but as activities that ultimately protect people’s lives and health, and that therefore must be charitable.
However, while the activity is clearly connected to the charity’s purpose, because it meets the description of a political activity, it is not charitable, and the use of the charity’s resources for this political activity must comply with the limits in the Income Tax Act.
I’d like to turn briefly to the issue of political purposes. This is an important issue to address, since charities can carry out a limited amount of non-partisan political activities, but they are always prohibited from having a political purpose.
A political purpose is any purpose that seeks to either:
1.further the interests of a particular political party; or support a political party or candidate for public office; or
2.retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.
A charity must always have only charitable purposes. If a charity adopted a political purpose, it would no longer have only charitable purposes, and would therefore no longer be eligible for registration as a charity.
There are a number of situations in which a charity might be considered to have a political purpose.
A charity can never include in its governing documents a purpose that seeks to retain, change, or oppose the law, policy, or decision of any level of government, in Canada or abroad. (A charity’s governing documents are the documents that formally establish an organization and govern its operations, such as a certificate of incorporation or letters patent.)
If a charity carries out political activities to the extent that they exceed the allowable limits under the Income Tax Act, it’s possible the CRA might conclude the charity has adopted a political purpose, even if there is no political purpose explicitly included in its governing documents.
Such an unstated political purpose would normally be discovered by a close examination of a charity’s activities, what it is actually devoting its resources to.
For example, if a charity devoted half of its total resources to political activities, this would be a strong indicator that the charity had adopted a political purpose.
Also, some purposes in a charity’s governing documents may not explicitly state they are trying to change a law, but describe a goal that can reasonably only be achieved through a change in law.
In such a case, the purpose would very likely be considered a political purpose.
For example, an organization might apply for registration as a charity with the purpose of protecting people`s health by banning a substance or chemical from use in processed food.
This purpose does not clearly call for a change in law, but to accomplish this purpose would require changes in government regulations. The organization would therefore likely be considered to have a political purpose, and could not be registered as a charity.
Generally, any purpose that suggests convincing or needing people to act in a certain way and which depends on a change to law or government policy (for example, “the abolition of” or “the total suppression of” a particular practice) is typically a political purpose, and not acceptable for a charity.
Accountability for a charity’s resources
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Welcome to Segment 3 called “Accountability for a charity’s resources,” part of the “Political activities (Policy statement CPS-022)” webinar.
The Income Tax Act requires a charity to keep records to show how its resources were used, so that it can prove that it continues to qualify for registration as a charity.
You can see Guide RC4409, Keeping Records,on the CRA’s website for detailed information on what kinds of records a charity needs to keep, and for how long.
There are no special books and records requirements that apply to political activities. However, a charity must keep books and records to show that any political activities it carried out comply with the provisions of the Income Tax Act.
The onus is always on the charity to account for its use of resources, so that it can prove compliance.
The CRA recognizes that it can be challenging to analyze and track all the various types of a charity’s resources and how they are used.
Although a charity is generally free to find the best way for it to track its use of resources, the method used by the charity to calculate its expenditures on, or use of resources for, political activities should be reasonable and consistently applied throughout the year.
For example, a charity could analyze and track:
1.Financial resources – All financial expenditures, including salary and other human resource costs
2.Capital assets – The percentage of use of building and office space, the percentage or amount of proceeds or withdrawals from the charity’s investments that are spent on political activities; and
3.Volunteer time and donated resources – The percentage of volunteer hours or number of volunteers, and the percentage or amount of donated resources that are devoted to carrying out the charity’s political activities.
The onus is always on the charity to account for its use of resources, so that it can show it continues to comply with the requirements of the Income Tax Act.
If a charity is not complying with the requirements of the Income Tax Act, the CRA generally follows an education-first approach.
Our preference is to help charities understand the requirements.
For example, the CRA might address an issue of non-compliance by first making sure the charity understands the rules and requirements regarding political activities.
A written compliance agreement might be put in place, where, for example, a charity commits to amend its activities within a certain time frame.
But, with all this in mind, in some cases revocation of a charity’s registration may be the first action.
I’ll also add that the 2012 federal budget provided an intermediate sanction for charities that carried out political activities in violation of the Income Tax Act. This sanction is a temporary suspension of a charity’s qualified donee status. As a result of such a sanction, a charity would no longer be able to issue official donation receipts or receive gifts from other registered charities.
Form T3010, Registered charity information return, requires a charity to report, among other items, whether it carried out political activities, its expenditures on political activities, and what kind of resources have been devoted to its political activities.
Form T3010 is a public document, and all charities’ T3010 forms are accessible on the CRA’s website.
Even if a charity has not spent any money on political activities, but has used other resources such as volunteers, office space, vehicles, or equipment, it will still have to complete certain sections of Form T3010 that are related to political activities.
For example, section C5 of the form requires a charity to report whether it carried out political activities (regardless of the type of resources used), and how much it spent on those political activities, if it spent anything.
On the new Form T3010 for fiscal periods ending on or after January 1, 2013, section C5 includes a new question that asks for the amount of any gifts received from foreign donors that was directed to be spent on political activities.
These types of gift do not represent a political activity for the charity, but must still be reported on the appropriate line.
If a charity carries out political activities, there is a new schedule to complete in order to provide detailed information on its political activities, and that is Schedule 7.
Schedule 7 requires a charity to describe its political activities in more detail, and is divided into three parts:
1.First, it asks a charity to describe its political activities, and how they relate to its charitable purposes. This gives some context for what the charity does as a political activity, and why.
2.The charity must use tick boxes to indicate how it carried out its political activities, and the type of resource used. For example, the charity might indicate it carried out political activities through electronic publications, rallies and demonstrations, and social media, and that it used its staff and volunteers, as well as financial resources, for these activities. This section does not require a charity to calculate how much of its resources were used for its political activities, just to identify the type of resource.
3.The third section of the schedule records amounts received outside of Canada for political activities, the political activity they were intended to support, and the country where the gift came from.
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Welcome to segment 4 called “Representations to government and Personal political activities of the representatives of a charity,” part of the “Political activities (Policy statement CPS-022) webinar.
The CRA`s policy on political activities, Policy Statement CPS-022 has a very specific definition of political activities.
If an activity fits any of the four types of political activities in this definition, the activity is a political activity—with one important exception.
That exception is if a charity is making a representation to an elected representative or public official.
Charities have long been able to provide advice on public policy issues to government, since they often have a great deal of practical experience from working in their particular field.
For that reason, if a charity makes a representation to government, by which I mean an elected representative or public official, this is generally considered to be a charitable activity, even if it calls for a change in the law, or otherwise is an activity that would meet the definition of a political activity.
There are still criteria that a charity must meet for its representations to be considered charitable.
These criteria include the requirements that a charity’s representations always remain connected and subordinate to its charitable purposes. Representations must be a relatively minor activity carried out only in support of a charity’s charitable purposes.
For example, a charity that advances education by providing scholarships could not begin devoting all of its resources to making representations to the provincial government calling for a reduction in sales tax.
Whether a representation meets all the criteria to be considered charitable will always depend on the specific facts of any individual case.
Examples of when a representation might meet the criteria of section 7.3 of Policy Statement CPS-022 on Political Activities, and be considered charitable might include:
1.a meeting at a member of Parliament’s office where the charity delivers an oral argument urging the member to introduce a private members’ bill that is related to its charitable purpose;
2.a presentation delivered to a public official at the charity’s headquarters building to explain the charity’s findings on a public policy issue that relates to the charity’s purposes, and call for a particular government policy to be cancelled;
3.an appearance before a parliamentary committee to speak about the charity’s experiences in its field of operations and to urge the committee to approve proposed legislation; or
4.a presentation at a municipal government town hall meeting to provide the charity’s views on the benefits to its programs of proposed changes to a municipal government policy, and call for those changes to be implemented.
A charity may want to release the text of a representation it has made, or is going to make, to an elected representative or public official.
This will be considered a charitable activity as long as the entire text is released and there is no explicit call to political action either in the text or in any reference to the text.
A charity can issue an entire representation to the public by: news release; on its website; or explaining in a newsletter that it intends to make, or has made, the representation and is willing to distribute the information to anyone who wants a copy.
In all cases, the whole representation should be made available.
If a charity makes an explicit call to political action in any part of this representation or in reference to it, the activities could be regarded as political activities and, as a result, all resources and expenditures associated with these activities could be considered to have been devoted to a political activity.
For example, if a charity placed the text of a presentation on its website, and positioned the text so that it was adjacent to a call to political action, this would likely be considered a call to political action made in reference to the text of a representation; it would then become a political activity.
Representatives of a charity, such as employees, directors, members, or volunteers, may be involved with an election, political campaign, or any other political activity in their own capacity as individuals, whether during an election period or not. The Income Tax Act’s restrictions on a charity’s political activities do not apply to representatives of a charity as individuals.
But, a charity’s resources (for example, office space, supplies, phone, photocopier, computer, publications) must never be used to support an individual’s personal political activities.
However sincere or well-intentioned an individual’s motivations may be for speaking out on an issue he or she considers important, there is a separation between a charity’s political activities and an individual’s. That line must not be crossed, or it may put the charity’s registration at risk.
The Canada Revenue Agency suggests that charities consider developing an internal policy and/or guideline to make sure that there is a clear and explicit understanding regarding the use of a charity’s resources for political activities. Such a policy or guideline would address the distinction between a representative’s personal political activities and a charity’s political activities.
In situations outside charity functions and publications, representatives of a charity, particularly leaders, who speak and/or write in their individual capacity are encouraged to indicate that their comments are personal rather than the views of the charity, when there might be any doubt as to whether this is the case or not.
This is particularly important in the case of social media, where it may be difficult to tell whether a representative’s messages represent his or her personal views, or a charity’s political activities.
Finally, I’d like to mention that you can comment on all of the Charities Directorate policy and guidance documents, including our policy on political activities, by sending an email to our policy consultation inbox.
For example, you can let us know if there are any areas in our guidance documents that need more clarification, or if there are any topics you’d like to see addressed in a future product.
We do not send replies to these emails, but we do read every comment we receive and give them careful consideration.
Thank you and we hope you enjoyed this webcast. If you would like more information on this topic, please contact our Client Service at 1-800-267-2384 . If you haven’t already signed up for the Electronic mailing list, we invite you to register on the Charities and Giving website. Once registered, you will receive emails as new information and updates, affecting registered charities, become available. The Electronic mailing list is also one of the communication channels we use to let you know when the next Charities Information webinars will take place and how to register.
Date modified:2013-09-24 ”
Do you require legal advice with respect to Canadian or Ontario non-profits or charities?
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.