It’s past time to improve our charity laws

Posted on April 11, 2018 in Inclusion Policy Context – Opinion/Contributors – Outdated regulations are threatening to stifle Canada’s charitable sector and cripple our ability to make progress together.
April 11, 2018.   By

I have managed charities for 25 years. Not quite as along as the Leafs haven’t won the Cup, but long enough to make a few observations.

Canadians want charities to succeed — that’s why we donate some $13 billion a year to support our favourite organizations. Without the work of charities, we would still have acid rain, rampant drunk driving, no marriage equality, and smoking in the workplace.

Yet, outdated regulations are threatening to stifle Canada’s charitable sector and cripple our ability to make progress together. The sector is still governed by laws hardly changed since the 19th century. This is like regulating the airline industry with horse-and-buggy rules.

The old laws exist despite their tremendous economic impact: the non-profit and charitable sector employs 2 million people and accounts for 8 per cent of Canada’s GDP. We would never accept such outdated regulations for any other industry.

What’s more, when charities want to fulfil their missions they are often stifled. Consider:

The Harper government launched politically motivated audits against 50 left-leaning charities with the aim of taking away tax-deductible donations.

Charities operate under rules restricting creative efforts in generating revenue other than conventional fundraising.

Charities are prohibited from accumulating surpluses to save for a rainy day, lest the regulator see this as indicative of a profit motive.

Then consider the outdated rules when charities help with changing public policy. Government policy‑making is heavily influenced by for‑profit corporate interests. Companies are free to do anything, as long as their political activities are aimed at increasing profit, and they get to deduct their political advertising and lobbying expenses from their taxable income.

Charities, on the other hand, are restricted to using less than 10 per cent of their resources on political activities. This constrains the ability of charities to advocate publicly for policy and legal reform that benefit the public interest.

The Trudeau government promised to step in and clean up this mess. They suspended all the unfair audits on the 50 charities. Then they appointed a credible panel of experts to recommend changes to “political activities.” The feds repeated the reform promise again in the recent federal budget. But little has happened since then.

What charities need now is action. It’s only 19 months until the next federal election. Trudeau promised to remake the legal framework. I urge the Prime Minister to make charity reform a high priority to allow the groups even greater impact for the benefit of Canadians.

So what will happen first? The Leafs winning the Stanley Cup, or charities finally getting the legal tools they need? I wish for both.

Burkhard Mausberg is a big Maple Leafs fan and served as the CEO for the Greenbelt Foundation, Environmental Defence, and Great Lakes United.

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