The 5 Myths of Charities and Political Activities

The July 16, 2018 decision of the Ontario Superior Court in the case of Canada Without Poverty vs. the Attorney General of Canada ruled that charitable donations were a free speech issue and that limiting the amount of money a charity can spend on political activity curtails freedom of speech.

Unfortunately, opening the door to unlimited tax credited political spending will make it even harder to deal with systemic issues around poverty and oppression because other interests, who are not thinking in terms of the common good, have way more money than groups like Canada Without Poverty. I posted in detail about this on August 22^nd.  Click here if you’d like a review of the decision.

Given the impact of the decision, it seems timely to get a few facts straight. Let’s start by dealing with a few myths surrounding charity and social change.

1. The charity sector has traditionally been at the forefront social change. Consider civil rights, women’s rights, LGBTQ rights and voting rights. Characteristics they all share is that they involved community organizing, street level protest, and addressing inequity in institutions of government, corporations and the courts. None of these movements originated in charities and some (LGBTQ and women’s rights, for example) continue to be fought by some faith-based charities (faith-based groups make up 30 to 40 percent of charity revenue).
2. The charity sector prioritizes systemic change. In 2014, on revenue of $246 billion, charities spent $25 million on political activities—.01%. The Canadian Revenue Agency allows charities to spend 10% of the revenue on non-partisan political activities. And although many charities say they feel like they work on long term solutions, when the rubber hits the road, very few are spending resources on it. The sector as a whole could spend one thousand times the amount it is currently spending on political activities.
3. Groups lobbying on behalf of the charity sector are doing it to help the poor. The largest groups who say they are lobbying on behalf of the charity sector in Canada have demonstrated two primary interests in their lobbying: 1) changes to tax regulation that primarily benefits the wealthy and 2) being arbiters of “charity standards.”
4. You can’t raise money if you can’t give tax receipts. Ask Greenpeace, the Canadian Civil Liberties Association (CCLA) or Canada’s former National Action Committee on the Status of Women. None of these groups are charities and all have made significant contributions to promoting environmental causes, women’s rights and human rights.  They operate as non-profit organizations without the ability to issue tax credits, but who count many tens of thousands of people as supporters. The CCLA is currently taking the Ontario government to court for its rollback of the sex education curriculum and they are raising money to do it.  Click on this link if you’d like to make a donation to that important effort.
5. Charity work addresses the root cause of modern day poverty. Charities in Canada, as in most Western nations, serve the poor by operating food banks, shelters, breakfast programs and so on. In the wake of changing government priorities, they fill the gaps created by inadequate social programs. Meanwhile the continued and widening gap between rich and poor has been characterized as one of the defining challenges of our time. The top 1% of the world’s population owns half the world’s wealth.  As tax cuts have become de rigueur in western countries, tax systems have become less effective at re-distributing wealth. Fifty percent of the job creation in OECD member states has been non-standard work such as temporary contracts or self-employment. All this in the context of charities being driven by their philanthropic needs means the sector is sliding down a slippery slope of having extremely wealthy philanthropists determining the focus of their work or research. According to some, this is reaching disastrous proportions.       Last week, The Chronicle of Philanthropy profiled Anand Giridharadas’s brand-new book, Predatory Philanthropists. “Giridharadas’s denunciation of swashbuckling billionaire philanthropists,” they say, “who present themselves as society’s saviors yet fight the taxes, regulation, and government efforts that would fix the economy’s structural issues — and hurt their bank accounts.”  “Today’s elite may be among the more socially concerned in history,” [Giridharadas] writes. “But it is also … among the more predatory in history.”   Given their immense insight into the plight of the poor, the sick and the oppressed, charities have a magnificent opportunity to give a voice not only to the people they serve, but the majority of all people and the planet we inhabit. It’s time to get started.

Gail Picco is an award-winning charity strategist widely recognized as one of Canada’s foremost experts on how to carve a path through the increasingly complex dynamics of the charitable sector. Civil Sector Press published her latest book, Cap in Hand: How Charities are Failing the People of Canada and the World, in 2017. http://www.gailpicco.com