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Charity for new age

Other countries have upgraded rules, why can't we? researcher asks

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Charity:

An organization set up to provide help and raise money for those in need: the charity provides practical help for homeless people. The body of organizations viewed collectively as the object of fundraising or of donations: the proceeds of the sale will go to charity. The voluntary giving of help, typically in the form of money, to those in need: the care of the poor must not be left to private charity

-- Source: Oxford Dictionaries

 

It seems amazing, but when you write out that cheque or give your credit card number to a particular or favourite charity, it is able to give you a tax receipt because of decisions made in the years 1601 and 1891.

Now Karine Levasseur, an assistant professor in the University of Manitoba's political studies department who has looked into the definition of charity and checked out more than 400 years of court decisions, is asking why the federal government is resistant to redefining charity for the modern age.

Levasseur said she looked into the question -- and wrote a paper that was recently published by the Institute of Public Administration of Canada -- because her area of research interest is how governments relate to the country's voluntary sector.

Levasseur said she became interested in the issue a few years ago when an organization in British Columbia, set up to help female immigrants get jobs, was rejected for charitable status.

"They really wanted to support those women to integrate into Canadian society. They wanted to work with employability, but with the meaning of charity, which goes back to 1601, it hasn't evolved that helping find a job could be charitable.

"There's definitely a problem with what we consider charitable here."

The definition of charity around the world goes back to The Charitable Uses Act of 1601, passed by the Parliament of England. The act's preamble has a list of purposes and activities believed to benefit society that Parliament wanted people to donate to.

The next major change was in 1891 in the British court case Commissioners for Special Purposes of Income Tax vs. Pemsel. The court's decision listed four categories of charity.

While other countries have evolved the categories, in Canada this is the area that hasn't changed for more than 100 years, Levasseur said.

Canada still has the four categories for charities defined in Pemsel -- poverty relief, education advancement, religion advancement and other purposes beneficial to the community. The United Kingdom has 13 headings.

She said this allows other countries to recognize charities that cover "multicultural and ethnic cultural groups, umbrella organizations and community broadcasting organizations," while Canada sometimes allows groups like this to be charities and other times doesn't.

Local sports organizations are also prohibited from becoming charities.

"Right now, unless you are a national organization, you can't get charitable status," she said.

"If you think of the importance of activity to combat stress and your well-being, these groups should, but can't, benefit from charitable status."

Charities in Canada also face problems because of restrictions on their advocacy activities. Charities can only devote 10 to 20 per cent of their annual budgets to advocacy, Levasseur said.

"That can create an advocacy chill -- look at what has happened with the Northern Gateway pipeline. Even David Suzuki stepped down from his own foundation to insulate it from his advocacy.

"Charities can only put a hand out for a problem and not get a solution."

Levasseur's research found the Charities Directorate of the Canada Revenue Agency is trying to be as flexible as it can within the rules, but it can only go so far because of the federal government's Finance Department and tax rules.

David Northcott, Winnipeg Harvest's executive director, said he has read Levasseur's research and he was surprised that the four headings for types of charities allowed in Canada have been around since a court decision in 1891.

"We do education and poverty relief, so we do two of them that benefit the community," he said.

But Northcott said where the tension really comes in for charities is the restrictions on advocacy.

"I know you can devote 10 to 20 per cent of your budget to advocacy, depending on your size, but there's not a clear definition of advocacy," he said.

"That's too bad, because the voice of charity groups can greatly contribute to an issue. It's not advocacy -- it's giving voice to people.

"We should be able to say to a political party, 'If you do this it will help us or hurt us.' "

Bill Schaper, Imagine Canada's senior manager of public policy, said "a lot of what (Levasseur) says about the definition issue makes sense.

"For various reasons, it does appear the definition is more restrictive in Canada than in other jurisdictions. What you can do about it I'm not sure.

"But anything that could help the sector do their job is a good thing."

Schaper said it would be tough to change the rules because of the split responsibilities between the federal and provincial governments. The federal government registers charities to fit in with the taxation system, while the provinces regulate charities.

"You may open a can of worms you don't want to open," he said.

Schaper said Imagine Canada, a national organization whose mandate is to support and strengthen charities and non-profits, has appeared before federal government committees to recommend the legislation be changed so that when issues come up concerning charities, they are able to take them to tax court first instead of Federal Court.

"You can bring more evidence into play there," he said.

"We have made the recommendation, but they have chosen so far not to act on it."

kevin.rollason@freepress.mb.ca

Republished from the Winnipeg Free Press print edition February 23, 2013 A15

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