To What Extent Can A Charity Engage In Activities Of A Political Nature? by Frank Luellau June 4, 1997; Canadian FundRaiser To what extent can a charity engage in activities of a political nature? With their wealth of knowledge and experience, charities can contribute significantly to public life in Canada. They can offer solutions to problems relating to their experience, and Canada would be impoverished if they were excluded from public debate or denied the opportunity to inform decision makers. Before a charity gets into an activity that involves politics, however, it must be certain it has the corporate capacity to do so and that the planned activity is permitted by law. One law that places restrictions on the activities of charities which are of a political nature is the Income Tax Act. To maintain its registered status under the Act, a charity must devote all of its resources to activities in pursuit of its own charitable purposes. In 1986, changes to the Act made it possible for registered charities to engage in limited activities that may be considered to be in pursuit of political purposes, so long as these are ancillary and incidental to activities that are also in pursuit of their charitable purposes. This eliminated any concern in connection with speaking out on issues involving ethics, morals and social justice, but Canadian charities also need to be aware of the regulations and restrictions that are imposed on them by provincial statutes and common law. The staff, directors and/or trustees of charities need to understand the extent to which their charity may engage in activities that may be considered to be in pursuit of political purposes. An understanding of the underlying principles will help them maintain a proper balance between remaining faithful to their charitable mandate and staying within the constraints which Canadian law places on the activities of charities which may appear to have political overtones. A body whose stated purposes include the attainment of a political purpose will not receive recognition as a registered charitable organization under the Income Tax Act, and both provincial law and common law have similar restrictions. A charity, therefore, cannot be a political organization. That does not mean, however, that charities are precluded from all political action. What a charity is allowed to do is determined by its purposes - the objects for which it was established - as set out in its governing documents. Since charities must be constituted for public benefit, whether or not a particular political purpose is for the public benefit is a political debate. What is a political purpose The Courts have held that purposes intended to advance the interests of a political party, or to seek or oppose changes in the law or government policy, whether in this country or abroad, are not charitable. The decisions of the Courts also allow us to deduce certain basic principles about political purposes. The fundamental distinction to be made is between activities in pursuit of political purposes and activities in pursuit of charitable purposes that might also be the subject of political discussion. The Courts have made it clear that a body whose stated purposes include the attainment of a political purpose cannot be charitable. A body whose purposes are charitable, (and therefore do not include a political purpose) may nevertheless engage in activities which address issues that affect the attainment of the charitable purposes of the charity, even though this may also involve issues being considered in the political arena. Charities, however, are restricted in the extent to which they can engage in activities which influence the political process by the legal rules applying to them by virtue of their charitable status. What not to do A charity must not advocate in support of policies, nor seek to inform and educate, on subjects and issues which do not conform with its corporate purposes. Moreover, where a legislative or policy change related to any issue is addressed by the charity, such issue must clearly be seen to be ancillary to the charitable objects of the charity. A charity should not seek to organize public opinion to support or oppose a political party which advocates particular policies favoured or opposed by the charity itself. Inevitably, a policy put forward by a charity will sometimes coincide with that of a particular political party, or a political party will decide to adopt such a policy. It does not follow that the charity is prevented from promoting its policy on the issue, but in such cases the charity should take particular care to ensure that the independence of its view is explained and understood. Activities in which a charity should not engage: 1. A charity should not seek to persuade members of the public to vote for or against a candidate or for or against a political party. 2. A charity should not support a political party. 3. A charity should not provide supporters or members of the public with material specially designed to support a political campaign or, for or against a government or particular office seeker. 4. A charity which publishes the results of research should not manipulate the information so as to present a partial view to support a preconceived position or objective. 5. A charity should not seek to influence public opinion or to put pressure on the government, whether directly or indirectly through its supporters or members of the public, to legislate or adopt a particular policy. 6. A charity should not participate in political demonstrations and should not conduct publicity campaigns indicating how individual members of parliament or parties have voted on a particular issue as a means of applying public pressure on those members or the government. 7. A charity should not conduct a referendum on a political issue, as opposed to a properly constituted study or survey. 8. A charity should not provide its supporters or members of the public with pro forma letters or other pro forma material to send to members of parliament or the government. 9. A charity should not overstep the boundary between education and propaganda. The distinction is between providing balanced information designed to help people make up their own mind and providing one-sided information designed to promote a particular point of view. 10. A charity should not finance political activities whether directly or through a third party, or whether by making a grant or by affiliating with the third party. Breach of trust The use of the charity's resources for improper activities which are considered to be in pursuit of a political purpose is a misuse of charitable property and constitutes a breach of trust. It may give rise to personal liability on the part of the directors or trustees of the charity, who may be required to repay to the charity the money spent on such activities. It may also lead to the loss of status as a registered charitable organization, or the disallowance of the tax benefit for the donor on the funds contributed to support such activities. Finally, improper activity could be regarded by the public as amounting to the use of a charity as a vehicle for the personal views of its staff, directors or trustees. Such activity may cause loss of support for the charity and damage the good name of charities generally. Activities of a political nature that may be appropriate Although an organization established for political purposes can never be a charity, a charity may do some things of a political nature as a means of achieving its own charitable purposes. This principle, although easy to state, is not always easy to apply in practice. In applying it, a charity should take particular care, since the dividing line between proper debate and improper advocacy is difficult to draw. As stated above, advocacy must be ancillary to charitable objects. To be ancillary, activities should serve and be subordinate to the charity's purposes. They cannot, therefore, be undertaken as an end in themselves, and should not be allowed to dominate the activities the charity undertakes to carry out its charitable purposes. The charity must be able to show that there is a reasonable expectation that the activities will further the charitable purposes of the charity. A charity can engage in an activity that may be considered to be in pursuit of a political purpose: * if there is a reasonable expectation that the activity concerned will effectively further the stated purposes of the charity and so benefit its beneficiaries; and * if the activity is within the powers which the charity has to achieve those purposes; and * if the activity is appropriate to a non-political organization; and * if the views expressed are based on a well-founded and reasoned case and are expressed in a responsible way. Dialogue with government Where these requirements are met, a charity may properly enter into dialogue with government on matters relating to its purposes or the way in which the charity carries out its work. It should publish the advice or views it expresses to ministers of the government. It should also seek to inform and educate the public on issues relevant to the charity, including information about the needs the charity seeks to meet and the solutions it proposes. It should do so, however, on the basis of a reasoned case, and the views should be expressed with a proper sense of proportion. A charity may undertake only those activities which further its purposes and which are authorized by its governing documents. Activities carried on in the period in which a political campaign is in progress should be conducted in accordance with the principles set out above. Penalties for carrying out unacceptable activities of a political nature Activities in pursuit of a political purpose carried on by a charity would normally affect its charitable status. If the charity argued successfully that its express purposes were broad enough to cover such activities, then the question of whether the organization was established for exclusively charitable purposes would arise and could lead to the loss of its status as a charitable organization. A charity's mandate to contribute to the well-being of the community of necessity includes speaking out on social and moral issues. At times this involves addressing issues that are being dealt with in the political arena, but all charities in Canada must take care to stay within the limits imposed by law. Whether a charity can properly engage in a political campaign will depend upon the nature of its charitable purposes, its ancillary powers and the way in which such activities will contribute to public debate. Where charities wish to raise issues in a way which will inform and influence decisions of public bodies , they should take great care to ensure that the issues concerned are relevant to its charitable purposes and that the means by which they raise them are within their powers and appropriate to a non-political organization. Difference between public education and unacceptable political involvement The extent to which charities are allowed to promote, support or take part in activities in support of political purposes has to be considered in each case in the light of all the relevant circumstances. It is not sufficient for the charity simply to believe that their activities will effectively further the charitable purposes of the charity; there must be a reasonable expectation that this is so. The distinction must be made between what is public education and what is unacceptable political involvement. Each charity must have an established process of proofing and approving drafts of any public releases, whether they be advertisements, appeals, newsletters or pamphlets, to ensure compliance with the law. In any case where a charity remains uncertain as to the legality of proposed activities, it should seek legal counsel. ______________________________________________________________ Activities in which a charity may engage 1. A charity may respond to issues raised in election campaigns, whether local, provincial or national, by analyzing and commenting on the proposals of political parties which directly relate to its charitable purposes or to the way in which it is able to carry out its work, provided that it comments in a way which is appropriate to a non-political organization and complies with all the relevant provisions of electoral law. 2. A charity may bring to the attention of prospective candidates issues relating to its purposes or the way in which it is able to carry out its work, and raise public awareness about such issues generally, provided that the promotional material is educational, informative, reasoned and well-founded. 3. A charity may seek the support of elected officials where a question arises as to whether a government grant to the charity is to be made or continued. 4. A charity may seek to influence government or public opinion through well-founded, reasoned argument based on research or direct experience on issues either relating directly to the accomplishment of the charity's own stated purposes or relevant to the well-being of the charitable sector. 5. A charity may seek a change in the law or public policy which it reasonably believes would help it to achieve its charitable purposes, and may oppose a change in the law or public policy which it reasonably believes would hinder its ability to do so. In either case, the charity can present government with a reasoned memorandum in support of its position. It may publish its views and may seek to influence public opinion in favour of its position by well-founded, reasoned argument. 6. A charity may respond to proposed legislation by providing and publishing a response to an invitation to charities for comments or suggestions by the government or a public body considering or proposing changes in the law, or to a position paper published by the government. 7. A charity may, in response to proposed legislation, supply to elected officials for use in debate, such relevant information and reasoned arguments as it reasonably believes would help the charity achieve its charitable purposes. 8. A charity may hire a liaison officer to inform elected officials on matters relevant to its charitable purposes. 9. A charity may comment publicly on social, economic and political issues if these relate to its purposes or the way in which the charity is able to carry out its work. 10. A charity may put forward or support a particular solution with respect to an issue if it reasonably believes that such solution will further its charitable purposes, even though that solution may also be advocated by a political party. If it does so, it must make plain that its views are independent of the political party. 11. A charity may provide factual information to its supporters and those interested in its work in seeking to inform elected officials and others on matters related to the purposes of the charity. 12. A charity operating in countries other than Canada may not pursue activities that may be considered to be political or illegal in those countries, even though pursuing such activity in Canada would be permissible. [eof]