These groups have one thing in common. They turned a spotlight onto Harper government policies or advocated for public policy change that might alleviate society’s gravest ills.
There is strong suggestive evidence that more than 50 audited charities have been targeted in order to silence criticism and to create a chill among others that might speak out.
The government argues that it is merely enforcing existing law. This will not wash. After all, it fails to revise that law, a statute that is rooted in an understanding of acceptable charitable activity more than a century old.
Many of the NGOs harmed by the CRA audits have made valuable contributions to Canada. So what to do?
First, it should be understood that the solutions to many of society’s problems do not need more research and the criticism-free public education that the CRA permits. They cry out for advocacy and changed law. Unfortunately, the CRA only allows NGOs to spend 10 per cent of their income on policy advocacy and law reform. Thus a charity has to be substantial in order to be large enough to fund meaningful advocacy.
In contrast, while the Harper government blocks charities from using tax credits to influence public opinion, it allows corporations to write off as a business expense 100 per cent of the money they spend to derail or support legislation that affects their interests.
Unfortunately, the situation is worse than the 10 per cent limit imposed by CRA guidelines. The chill created by the fear of the loss of charitable status inhibits many NGOs from working effectively. The self-censorship that is produced constrains even the allowable advocacy. Thus, there is a good reason to question whether charitable status is more of a burden than an asset for many non-profits.
Second, donors support charities because they want to accomplish a social good. But if the organizations they support are silenced because of audit fear, donor philanthropy is not accomplishing what was intended.
In response to government intimidation, many NGOs fail to speak frankly to donors about options. Assume a donor decides to support a registered Charity X with a donation of $1,000 and would receive a tax credit to claim on his/her income tax worth 30 per cent of the donation. Percentages will vary depending on the donor’s tax bracket. This donor would reduce his/her tax burden by $300 at tax time and would be out-of-pocket $700. In this scenario, Charity X would only be able to use $100 of the $1,000 donation for advocacy.
Consider what we believe makes more sense. Charity Y establishes an affiliated non-profit that has no charitable status. Knowing this, the donor makes a smaller donation of $700 to the affiliate, receives no tax credit and remains out-of-pocket $700, same as in the Charity X example.
But in this case, Charity Y’s affiliate could use all $700 on aggressive advocacy, could speak “truth to power” and press for law reform. This donation could be up to seven times more advocacy impactful than it would be if it was given to a registered charity. Charity Y’s affiliate might even save thousands of dollars in legal fees defending itself from an audit.
The advantages of being an NGO without charitable status constraints would also accrue to any stand-alone new non-profit being formed or to an existing charity that loses or decides to abandon its charitable registration.
Donors, adequately informed about the advantages of supporting either organizations that have opted to move their advocacy to an affiliated charitable status-free non-profit or to an independent non-charitable NGO, would continue their support. They would be warmed by the knowledge their philanthropy is actually working to address climate change, poverty, human rights and other challenges. As it stands now, on many critical issues, charitable status suppresses public debate and works to prevent the reforms needed to make Canada healthier and more sustainable.
There is a third option. The non-profit sector could lobby to change the Income Tax Act to confirm that free expression of views in areas of a charity’s expertise is a public good, and an acceptable charitable activity. New Zealand and Australia have just recently done essentially that.
Original Article
Source: thestar.com/
Author: Garfield Mahood Brian Iler
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