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News reports on CRA auditing of advocacy undertaken by some Canadian environmental charities. Ci’s environmental analyst, John Grady’s views
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Charity Lotteries in Canada

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    • Top 10 Giving Countries

    Global Giving: A Comparison of Giving Rates between Countries
    With the release of the Fraser Institute’s latest report showing that Canadians donated 0.64% of their combined income to charities in 2011 compared to 1.33% in the US, many Canadians are wondering why there is such a disparity.  Are Americans simply twice as generous as Canadians?  And how do Canadians compare with other countries?
    Johns Hopkins University conducted a study comparing giving across nations from 1995-2002. In this study, it was found that Americans gave the most of all 36 countries examined at 1.85% of total GDP, followed by Israel at 1.34% and Canada third at 1.17%.  Further research on this data found that charitable giving is negatively correlated to tax rates – countries with higher levels of social safety nets have lower levels of giving.  As Canada’s total tax rate as a percent of GDP is higher than in the US, this is one potential explanation for the disparity in giving.
    A 2006 study by the UK-based Charities Aid Foundation that looked at donation levels for 13 countries around the world also found that the US showed the highest levels of giving at 1.67% of GDP with the UK in second at 0.73% and Canada third at 0.72%.  It went on to discuss possible reasons for the differences in the levels of giving, noting tax rates and social security contributions, the tax treatment of donations, the level of religious giving, and unofficial giving as potential factors affecting the levels.
    Overall, Canada appears to have one of the highest rates of giving globally. In fact, Canada has been “on the podium” in 2 cross-country comparisons in the past decade.  However, for many political, societal, and cultural reasons, US donors give significantly more than Canadians.  This is another reason for being informed, giving intelligently, and thus, having impact with our giving.
     
    Charitable Giving as a share of GDP by Country (1995-2002)

    2 Israel
    4 Argentina
    6 Ireland
    8 Uganda
    10 Tanzania

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    Environmental Charities under review for advocacy activities

    text-align: right; February 10th, 2014
    text-align: right; John Grandy
    text-align: right; jgrandy@charityintelligence.ca
    Environmental Charity Analyst Canada’s Environmental Charities Audited for Advocacy
    According to recent media reports, the Canada Revenue Agency has been auditing several Canadian environmental charities. The focus of these audits is apparently on advocacy activities.
    What is advocacy and why can it be a problem? There is no reason why charities should not work to promote causes that their donors believe are important. However, Canada’s tax laws prohibit charities from spending more than 10% of their “total resources” on “political activities”.
    Some of us might think that this policy simply means that charities aren’t supposed to spend large amounts of money promoting a political party. But in fact the definition of “political activity” is much broader. According to the Income Tax Act, if a charity recommends “to retain, oppose, or change” any “law, policy, or decision of any level of government in Canada or a foreign country” that will be considered a political activity. So, for example, if an environmental charity publishes a recommendation that the government should do more to protect the habitat of the woodland caribou, that can be considered a “political activity”. Similarly, a recommendation to the City of Toronto to increase the number of homeless shelters could be considered a “political activity”.
    Of the face of it, it may seem unreasonable that any public action by a charity in favour or against any government policy is “political”. Nonetheless, this is how the legislation is worded.
    Donors to Canadian environmental charities should have no concerns about giving to charities they support, provided that the charity keeps its CRA registration in good standing. Charity Intelligence’s recent comprehensive http://www.charityintelligence.ca/environment-charities report on Environmental Charities identifies those charities that include advocacy as a significant portion of their activities. Donors might want to discuss this issue with charity management if they have concerns about the CRA actions.
    The forthcoming Federal Budget may include further restrictions on activities by Canadian charities. Charity Intelligence will be following these issues closely and will provide an update following release of the Budget if required.

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    Charity Intelligence researches Canadian charities for donors to be informed and give intelligently. Our website posts free reports on more than 800 Canadian charities, as well as in-depth primers on philanthropic sectors like Canada’s environment, cancer, and homelessness. Today over 500,000 Canadians use our website as a go-to source for information on Canadian charities reading over 1.6 million charity reports. Through rigorous and independent research, Charity Intelligence aims to assist Canada’s dynamic charitable sector in being more transparent, accountable and focused on results.

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