Charity Wars: The sector awakens

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The 2015 federal election was less than five months ago, and saw the federal Liberal Party take power. In the wake of that event, nonprofit sector leaders and stakeholders came face to face with a stark new reality – a wholesale change in the character of government.

A Liberal majority win was a result that was mostly unanticipated, both by political pundits as well as many in the charitable sector. Unexpected but not necessarily unwelcome.

The new Liberal-led majority government, in place since October 2015, has the makings of a much friendlier partner for the entire sector. At least, it would seem so on the surface. Charities and nonprofits anticipate a tonal shift in their discussions with government and the Canada Revenue Agency – and its Charities Directorate – going forward.

Now out from the seemingly more rigid auspices of the prior Conservative regime, one that allegedly kept a baleful eye on the sector, there appears to be a thaw in effect. But what this may mean for sector organizations is still up in the air.

The plank that said little but insinuated a lot

As reported by CharityVillage in this September 9, 2015 pre-election story recapping the platforms of all parties regarding the nonprofit sector, the Liberal policy plank regarding charities was brief. However, it is also interpreted as a positive sign, now that the party is in power. It stated the following in what it called its Open and Fair Canada Revenue Agency (CRA) position:

“We will introduce a significant overhaul of CRA operating practices to develop a client relationship rather than that of simply a taxpayer. Elements include… ending the CRA political harassment of charities, as well as clarifying rules to affirm the important role that charities can and should play in developing and advocating for public policy in Canada.”

The question became whether sector leaders will merely get less “harassment” and more open dialogue, or whether Prime Minister Justin Trudeau’s plans for nonprofits are more aspirational?

The Answer is...

There will indeed be a major stepping back of government scrutiny of the sector, particularly as concerns political activity.

On January 20, 2016, the Honourable Diane Lebouthillier, Minister of National Revenue, announced that the CRA would wind down and then conclude its sector review of registered charities’ political activities. At the time of the announcement, the Agency had 24 ongoing audits yet to complete and intended to do so.

“The results of the political activities audit program have shown that the charities audited have been substantially compliant with the rules regarding their involvement in political activities. In light of these outcomes, the program will be concluded,” Lebouthillier said.

She added: “The independence of the Charity Directorate's oversight role for charities is a fundamental principle that must be protected. The Minister of National Revenue does not and will not play a role in the selection of charity audits or in the decisions relating to the outcomes of those audits. Our Government’s commitment to openness and transparency includes providing more information on the regulation of charities to the public and the charitable sector in a timely manner and in ensuring the engagement of the sector.”

Prior to her announcement, in an email exchange with the CRA, CharityVillage.com and sought information about whether the Agency had any indication from government about a new approach to the charitable sector. Philippe Brideau, a spokesperson for the agency, replied that the Minister of National Revenue’s mandate letter from Prime Minister Justin Trudeau asked Lebouthillier to “modernize the rules governing the charitable and not-for-profit sectors.”

In the letter, Trudeau writes generally about his expectations for transparency and accountability by government to Canadians. In regards to the nonprofit sector, he tells Lebouthillier she will be “held accountable for our commitment to bring a different style of leadership to government. This will include… constructive dialogue with Canadians, civil society, and stakeholders, including business, organized labour, the broader public sector, and the not-for-profit and charitable sectors; and identifying ways to find solutions and avoid escalating conflicts unnecessarily.”

A little later on in the letter, Prime Minister Trudeau gets specific with Lebouthillier about oversight and philosophy on the CRA and the sector.

“The CRA exists to serve Canadians. As Minister of National Revenue, your overarching goal will be to ensure that the CRA is fairer, more helpful, and easier to use. You will lead the government’s work to overhaul its service model so that people who interact with the CRA feel like valued clients, not just taxpayers,” Trudeau writes.

The Prime Minister then gives his Lebouthillier a bullet point list to follow that includes the following “top priority” task with regards to agency-sector relations:

  • Allow charities to do their work on behalf of Canadians free from political harassment, and modernize the rules governing the charitable and not-for-profit sectors, working with the Minister of Finance. This will include clarifying the rules governing ‘political activity,’ with an understanding that charities make an important contribution to public debate and public policy. A new legislative framework to strengthen the sector will emerge from this process. This should also include work with the Minister of Families, Children and Social Development to develop a Social Finance and Social Enterprise strategy.”

One can see why sector stakeholders would be smiling upon reading these words. And given the Prime Minister’s prior career on the Canadian nonprofit scene – he was Chair of the Board of the recently revived Katimavik, a national youth service participation program that served thousands - there is reason to believe his attitude toward the sector will be more magnanimous than his predecessor’s.

In this August 2005 CharityVillage story about national youth programming, Trudeau outlined his vision for Katimavik while then-chair.

At the time, he was insistent that Canadian political leaders address what he called “a kind of thinking that is very short term” with regards to engaging youth through the voluntary sector.

But just what does it all mean for today’s shifting landscape?

Presenting a united (but friendly) front

In Toronto, Bruce MacDonald, president of Imagine Canada, has –unsurprisingly - been talking non-stop with his sector peers and his organization’s stakeholder community about just this topic ever since the election result.

When asked how Imagine sees this playing out and what his organization will be looking for from this new, friendlier government, MacDonald sounds an optimistic note.

“What we’re witnessing is a change in tone coming from Ottawa. There’s a receptiveness to have conversations. Right off the bat, that’s a good thing,” he tells CharityVillage.com. “It’s heartening in the sense in that clearly there’s some thinking about what the implications of their efforts on the charitable and nonprofit sectors. I think that’s a nice sense to start off with.”

From his perspective, MacDonald says, the best method to engage this new government is with a “classic outreach” approach to build relationships with the new MPs and their staffs. One of the initial challenges in doing so is that many government offices are not yet staffed-up. “They’re moving quickly, but there are even [cabinet] ministers who don’t have chiefs of staff in place yet.

Imagine and “a coalition” of sector partners, are targeting the four ministries listed in Prime Minister Trudeau’s mandate letters, he says.

“Our approach right now is to build a broad public policy agenda, to create an enabling regulatory environment in this country for social good – charities, nonprofits, social enterprises and the works. And then effectively have buy-in from many organizations on that agenda.”

First up, however, MacDonald met with the CRA’s Charities Directorate Director General Cathy Hawara on Friday, January 15. It was the latest in a series of meetings Imagine has had with the Directorate as part of an ongoing dialogue - this time, to ask for clarification on how the agency would interpret the government’s election plank (see above).

So, how did the meeting go?

“It seemed a bit more relaxed. I'm not sure if that is because of the change of government or the fact that we are starting to develop a better relationship as a result of doing these more frequently,” MacDonald says. “It was cordial, professional and clearly Imagine and the Charities Directorate are committed to improving the system for charities.”

That said, not much more seemed to come out of this meeting, other than good vibes.

“The [CRA] staff are working to get clarity from the government on its commitments and then determine what work needs to be done by the regulator,” he says. “From our perspective, we seek to raise issues brought forth by sector organizations and ensure that the regulator is aware of them.”

Next steps for Imagine and its sector partners include looking at “areas of mutual intersection and interest,” MacDonald says. “Instead of just saying to government ‘here’s what the sector wants,’ we’re looking to establish a relationship with government, where they see us as vital partners in actually accomplishing their own goals as well. Let’s face it, there are many areas in the sector where government and organizations have mutual interests. We want to identify and understand from the Liberal government what they’re most interested in and how we can play a role in making that happen.”

Parliamentarians returned to the House of Commons to begin the business of governing in earnest on Monday, January 25. The charitable sector will see soon enough just how much more accommodating Ottawa is to its needs and wants.

What do you think? Will the new Liberal government make more significant changes to the nonprofit landscape in Canada?

Andy Levy-Ajzenkopf is a professional writer living in Toronto. He can be reached at aajzenkopf@yahoo.com.

Photos (from top) via iStock.com. All photos used with permission.

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