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Regulation of Advocacy in the Voluntary Sector: Current Challenges and Some Responses

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Prepared for The Advocacy Working Group

By Betsy A. Harvie

JANUARY 2002

Acknowledgements
I would like to thank Laurie Rektor of the Voluntary Sector Initiative Secretariat for her invaluable assistance. Her insights into the substantive issues and her skills as an editor are acknowledged with gratitude. The final product is much improved because of her involvement. The Advocacy Working Group, particularly its Chair, Megan Williams, National Director, The Canadian Conference for the Arts reviewed drafts and provided helpful comments. Their contacts through out the voluntary sector facilitated my interviews and opened many doors. I must acknowledge too the contribution of the many staff and leaders of voluntary groups with whom I spoke during late 2001. I appreciate that they cleared their schedules to be interviewed and that they were so candid in sharing their observations and anecdotes.

B.H.

About the Author
Betsy A. Harvie is a lawyer and consultant to Canadian charities and voluntary groups. She advises on charity law, organizational structure, board governance and policy issue management. She obtained her B.A. (Hon.) from the University of Alberta in 1981 and her LL.B. from Osgoode Hall Law School, York University in 1986. Between 1988 and 1996, she was an associate and then partner with the Toronto law firm Genest Murray where she practiced public regulatory law. Since 1997 the focus of her work has been within the voluntary sector. Currently she is completing a Professional Master’s of Public Administration specializing in the Third Sector at the School of Policy Studies, Queen’s University. She can be reached at bharvie@attcanada.ca

Executive Summary
This paper will provide background and context on the issue of advocacy from the perspective of the voluntary sector and establish a framework for further discussion. Since the Advocacy Working Group (AWG) seeks to engage and learn from the sector, charitable and non-profit leaders were interviewed about their opinions and experiences. Their definition of advocacy goes further than some accepted definitions. Advocacy is understood to enable those who need help to find their own voice. It gives power to citizens. They draw no distinctions in practice between advocacy for an individual and advocacy for systemic change or to benefit a group. Advocacy brings to light widely held bias and dismantles perceptions. Charities engage in advocacy because it is an effective, and sometimes the only, way to achieve their charitable purposes

Surveys indicate that 88 to 93 percent of Canadians strongly support charities engaging in advocacy and almost 80 percent believe that charities understand the needs of Canadians better than government.1 Nonetheless, there is virtually no systematically collected information in Canada about the groups, charitable and non-charitable, which engage in advocacy. More research is needed on the range and kinds of advocacy that are currently funded by government, however a number of federal departments appear to understand the benefits to their decision-making processes of supporting sector-based public policy input.

As government has downsized, it has come to rely increasingly on the voluntary sector for advice on the operational implications of programs administered by the sector. It needs the sector’s expertise, unique access into the community, attentiveness to social need and ability to facilitate the voices of Canadians in public policy formulation – particularly since its own policy capacity has diminished in recent years and the complexity of policy issues has increased. Nonetheless, government enthusiasm for increased sector involvement in policy development seems ambivalent. In part this is due to the difficulties of accommodating the sector’s viewpoints into internal government processes and expectations. It may also relate to perceptions about the sector’s capacity for “in-depth” and analytically rigorous research and concerns about the sector’s own biases.

Charities may not be established for political purposes. Under the common law and the federal Income Tax Act they may participate in non-partisan political activities that further their legitimately charitable purposes. The caveat is that these political activities must be incidental and ancillary to their charitable purposes. The Canada Customs and Revenue Agency (CCRA) has developed a rule that registered charities may not devote more than 10 percent of their resources to political activities.

Registered charitable status can make a material difference to the fundraising capacity of organizations. The sector also seeks a tangible acknowledgment from government that it has a vital role to play in public policy development. Extending the advantages of registered status to groups that do more than incidental advocacy would accomplish this.

CCRA tries to draw a fine line between activity that is intended to inform (which is charitable) and that which is intended to persuade (which is political). According to CCRA, legitimate public education encourages a full and reasoned consideration of an issue; it does not seek to influence public opinion. Public education campaigns are rarely considered charitable however since they seek to persuade, do not present all sides of an issue and are not part of a structured educational experience. The onus on charities to present all sides is greater the more controversial the issue.

The problem with these requirements is that they require groups to distinguish between ‘facts to inform’ and offering ‘opinion to persuade’ when that is not how most people perceive an issue or communicate it to others. The ‘intention to persuade’ will always be present, regardless of what it is called or how the information is shared. Requiring groups to present both sides of an issue is unrealistic as is making them responsible for establishing that an issue is not controversial when any issue that makes the newspapers is apt to arouse opposition from someone. Moreover, many charities work with the most marginalized members of society and the issues with which they contend are necessarily difficult and contentious. The requirement that charities wait until they are invited to participate in government-led processes places them in a subordinate position vis-à-vis government and one that is inconsistent with their role as an early warning system.

The case law on political activities is unclear and inconsistent. Compounding this is CCRA’s conservative legal interpretations and application of its own requirements that can be subjective, impractical, overly broad and unclear. This leads to confusion amongst charities about what exactly is permitted and what is restricted. The uncertainties of the law, compounded with regulator insistence that all decisions be made on a confidential case by case basis hampers the sector’s ability to obtain clear guidance on the limits of permissible political activity. The regulatory climate has produced an ‘advocacy chill’ where groups are fearful of the consequences of engaging in impermissible activities and frequently do much less advocacy than they might wish or should do to achieve their charitable purposes. The secrecy and uncertainty of the regulatory regime prompts some to question its integrity and the impartiality of CCRA in selecting certain groups for audits and investigation. Charities express concerns about fundamental fairness based on the limitations put on advocacy on the one hand, and the deductibility of lobbying and advertising expenses by business, on the other. More certainty and fewer restrictions exist in the regulation of political activities by charities in the United States and England.

This paper also addresses arguments against reform including the following. If the tax advantages of registered status are extended to other groups, is government providing an indirect subsidy to organizations that oppose it? Concerns exist about government’s ability to control groups with extreme views. Although government may be worried about the potential loss of tax revenue if more groups are granted registered status, there is no reliable evidence that this would occur. Canada can learn from practices in other jurisdictions, in particular, England. There may also be opportunities to develop sector-wide guidelines on best practices and approaches to political activities that would establish new benchmarks for responsible conduct by charities in respect of advocacy initiatives and reassure government that the sector as a whole takes seriously its obligations.

The paper concludes by identifying several options for reform including those outlined in the “Working Together” report by the Regulatory Table, a proposal by IMPACS, and the so-called ‘Drache’ and ‘Webb’ proposals. Each option is briefly analyzed from the perspective of charities, the voluntary sector, government and society.

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