Distinguishing between charitable and political activities

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Distinguishing between charitable and political activities

  • Given that the term charitable is not defined in the Income Tax Act, the common law meaning of the term is applied in determining what qualifies as charitable for purposes of registration. The courts have identified four categories of charitable purposes. For an organization to be registered as a charity, its purposes have to fall within one or more of the following categories:

    • relief of poverty

    • advancement of education

    • advancement of religion

    • certain other purposes that benefit the community in a way the courts have said is charitable

  • A charitable activity is an activity that furthers a charitable purpose.

  • An activity is presumed to be political if a charity:

    • explicitly communicates a call to political action (that is, encourages the public to contact an elected representative or public official and urges them to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country)

    • explicitly communicates to the public that the law, policy, or decision of any level of government in Canada or a foreign country should be retained (if the retention of the law, policy, or decision is being reconsidered by a government), opposed, or changed

    • explicitly indicates in its materials (whether internal or external) that the intention of the activity is to incite, or organize to put pressure on, an elected representative or public official to retain, oppose, or change the law, policy, or decision of any level of government in Canada or a foreign country

    • makes a gift to another qualified donee to support political activities

  • The Canada Revenue Agency will consider an activity that meets any of the four definitions in the list above to be a political activity, however beneficial the results of the activity might be, or how sincere the intentions or beliefs of the charity.

  • Representations made to elected representatives or public officials that meet certain criteria can be considered charitable activities, even if they contain an explicit recommendation to change a law, policy, or decision of any level of government. See sections 7.3 and 7.3.1 of Policy statement CPS-022, Political activities.

Example
A charity is registered to relieve poverty by helping refugees settling in a particular city. Besides providing temporary housing and employment training, the charity also helps the refugees apply for government social programs. The charity helps with translation, completing application forms, and providing legal representation.

The charity’s activities are likely charitable, because they directly further a charitable purpose and are not seeking to retain, change, or oppose a law, policy, or decision of any level of government.

But the charity learns that many refugees are not applying for the government social programs they are entitled to because the application forms are not available in the language spoken by most of the refugees. So the charity starts publishing articles on its website, distributing messages through social media, and creating petitions that publicly call for the government to translate the relevant forms.

In this case, because the charity is explicitly seeking to change a government policy or decision, it is carrying out a political activity in addition to its regular charitable activities. The political activity would be acceptable as long as the charity continues to meet all the requirements of the Income Tax Act (that is, the charity devotes only a limited amount of resources to the activity—generally no more than 10%, it remains non-partisan, and is connected and subordinate to the charity’s exclusively charitable purposes).

Date modified:
2013-03-12