Charities, Non-profits, and political activity

3 cups and 3 balls

Subheader: “Slowing down the shells of the shellgame”, yet another deconstruction of Vivian Krause: U.S. environmentalists are meddling in B.C.’s election

Preamble: Life is a journey. Let’s do some learning©

Foreward: There are 2 pieces of legislation that govern how charities and politics interact in this province. One is the federal Income Tax Act [PDF], the other British Columbia’s Election Act.

Disclaimer: Although I come from a family that has produced lawyers for, oh, 200 years -> I’m no lawyer. These are simply the observations of a layman.

Introduction: As I have written many times before, I feel the American foundations funding Canadian political activities argument to be specious. Some subjects are borderless: human rights, disaster relief, environmental issues, etc. It’s entirely natural that a group concerned with one of these in Country A would assist a similarly-minded group in Country B. I also find the theory that the secret motivation of these American groups is to advance the American national interest under that cover of environmentalism to be undermined by the evidence these groups behave consistently, including opposing environmentally damaging activity that would commercially benefit the United States. Ex. Opposing the Keystone Pipeline in addition to the Northern Gateway pipeline and opposing offshore drilling in the Alaska.

However there is another angle and that is accusation that registered Canadian charities are participating in political activity in a manner prohibited to them under the Income Tax Act. This post is an attempt to make sense of that, in as clear and straightforward a manner as possible. It’s not a post on the wisdom of the Organizing for Change strategy. On that, Murray Dobbin[1] and Bill Tieleman speak for me.

Exhibit A:

Under the Act, a registered charity must devote all of its resources to charitable purposes and activities. Notwithstanding this general rule the Act allows a small amount of resources to be used for political activity.

Exhibit B:

A charity wishing to carry out activities that go beyond the limits permitted by the Act may establish a separate and distinct organization that will not be a registered charity and therefore not able to issue charitable receipts. No limitations are placed on the political activities of such a body; it has complete freedom within the law to support any cause it chooses. But the charity cannot fund that separate organization or make resources available to it for any otherwise impermissible political activity.

Exhibit C:

A charity may not take part in an illegal activity or a partisan political activity. A partisan political activity is one that involves direct or indirect support of, or opposition to, any political party or candidate for public office.

When a political party or candidate for public office supports a policy that is also supported by a charity, the charity is not prevented from promoting this policy. However, a charity in this situation must not directly or indirectly support the political party or candidate for public office. This means that a charity may make the public aware of its position on an issue provided:

  1. it does not explicitly connect its views to any political party or candidate for public office;
  2. the issue is connected to its purposes;
  3. its views are based on a well-reasoned position;
  4. public awareness campaigns do not become the charity’s primary activity.

In addition, a charity in this situation is also subject to the restrictions this guidance places on non-partisan political activity, public awareness campaigns and communications with an elected representative or public official.

Exhibit D:

A charity may take part in political activities if they are non-partisan and connected and subordinate to the charity’s purposes.

We presume an activity to be political if a charity:

  1. explicitly communicates a call to political action (i.e., encourages the public to contact an elected representative or public official and urges them to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country);
  2. explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained (if the retention of the law, policy or decision is being reconsidered by a government), opposed, or changed; or
  3. explicitly indicates in its materials (whether internal or external) that the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country.

Exhibits A-D from Policy Statement: Charities: Political Activities, Canadian Revenue Agency

Below is a chart that attempts to graphically display the links outlined in Vivian Krause’s article. She states all the groups involved with Organizing for Change have received monies from other U.S. charitable foundations, but the exact links between groups are not mentioned nor is it said whether any of these grants were to support Organizing for Change – so for simplicity’s sake I have not included them.

You will notice at the bottom 2 links of relationships. These are mentioned in Krause’s article but I am not sure how they relate to Organizing for Change. “Operation for Change” certainly has a similar sounding name, but is it the same thing? I can’t tell.

On it’s About Us page, Organizing for Change has the following disclaimer:

This is a strictly non-partisan action, as more than one party is currently seeking new leadership and we indicate no preference regarding which party to join or candidate to vote for. We are also surveying all leadership candidates, in both parties, on a series of environmental questions and will be sharing that with supporters of several of our member organizations to provide them with the information they need to make leadership choices in accordance with their strong environmental values.

Given the description of partisan political activity in Exhibit C, I don’t think the above claim passes muster (again issuing a caveat I’m no lawyer). However there is clearly the required firewall as outlined in Exhibit B.

Organizing for Change is, simply put, that firewall.

Perhaps the concept of the firewall between charity and activism is flawed. Or perhaps it isn’t. Perhaps what we have now is the end product of decades of tinkering. Whatever we do we should think very carefully about the possible unintended consequences. What other groups – in fields such has health, human rights and social services – might be affected…

And until Vivian Krause begins writing about things like:

…I will continue to find her concerns disingenuous.

Update: Since I began writing this Vivian Krause has written another article in the same vein. In it she acknowledges that none of the activities she outlines is prohibited by BC’s Election Act.

The Election Act does not restrict the activities of foreign groups in B.C. political matters.

Of course, Organizing for Change isn’t a foreign group.

Update 2: For example if we changed the rules would the Fraser Institute – a registered charity – continue to be allowed to supply an endless stream of op-eds for the Vancouver Sun, et al? Op-eds which clearly fall into the category of political activity as outlined in Exhibit D? Be careful what you wish for, conservatives.

[1] Dobbin is actually talking about the Conservation Voters of BC: A “registered non-profit society, but not a charity.”

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