What’s the difference between a charitable purpose and a charitable activity?
Well, obviously a purpose and an activity are not the same things, but in legal terms that difference is very important, especially when the terms are found in legislation that carries the threat of revocation of charitable status.
That was one of the main points made by Karen Cooper, a lawyer with Drache Aptowitzer, who appeared before the Special Senate Committee on the Charitable Sector in December as a representative of the Canadian Bar Association’s Charities and Not-for-Profit Section.
“If it was on my wish list, that phrase ‘charitable activity’ would be deleted in its entirety,” she told the committee, saying the difference is something people are “constantly misunderstanding.”
The committee is studying ways to modernize the rules governing charities and not-for-profit organizations. As the Section said in a letter to the committee, it has made numerous submissions within the last few years to address the ability of this sector to carry out advocacy and political activities.
In her statement to the committee, Cooper noted the Section’s support of repealing the 10 per cent limit on political activities while maintaining the prohibition on partisan political activities, part of Bill C-86 that received Royal Assent in December.
“We were of the view the proposals would provide charities with more freedom to conduct nonpartisan political activities, such as public policy advocacy, and supported all of that,” she said. In the definition of charitable organization, however, the bill retained a reference to charitable activities.
“In my experience, that is one of the most overused and misunderstood phrases in the statute with respect to the regulation of charities. This language has created considerable uncertainty in the past and perpetuates unnecessary confusion about the distinction between a purpose and an activity that plagues much of the discourse surrounding the compliance obligations of charities.”
Cooper says the definition of charitable organization should mirror that of charitable foundation and omit any reference to charitable activities.
The Section would also like to see the reference to “indirect support” of political parties removed, because it is vague and subjective. She gave the example of an environmental charity that is running an educational program on electric vehicles when an election campaign begins and one of the parties has a plank in its platform offering rebates on electric vehicles.
“Your website may make no mention whatsoever of a political party, a candidate or anything like that, but because on your website you have a position that is similar to a position in a policy platform of a party, with ‘indirect’ there is a risk you could be seen to be indirectly supporting or opposing a political party or candidate for office.
“That is one of the recommendations that we make that has a real impact in the day-to-day advice that I provide on real-life situations, for what it’s worth.”
Senator Ratna Omidvar, the deputy chair of the committee, noted that many witnesses have referred to the “chill” the 10-per-cent rule on political activity has created in the sector. She asked both Cooper and the witness who’d preceded her, a representative of Canada Without Poverty, whether removing that limit would in turn result in a “cacophony” of diverse voices from all sides of the political sector.
CWP’s Michèle Biss noted that it would not change the rules governing who can become a charity. “What this changes is the ability for organizations, often organizations who represent marginalized voices, to participate in public policy discourse.”
For her part, Cooper said she couldn’t speak for the CBA on that question. But on a professional level, as a lawyer who has lived with the chill, she doesn’t see a problem.
“Charities as a whole are so conservative – small ‘c’ – in their approach to preserving their charitable status that I have no fear personally of a cacophony whatsoever.”
She added, “The biggest challenge I find in my practice is explaining, sometimes, the incomprehensible to someone who wants to comply. I have no worries about a cacophony.”