I've been reading through the Canada Revenue Agency information on registering for charitable status (for Liberation BC).
To take advantage of special tax privileges given charities under the ITA—the most significant one being the ability to issue tax receipts to donors[Footnote 6]—charities must first register with the CRA. To do so, an applicant organization must meet the requirements of the ITA; that it be charitable at law and devote its resources to charitable purposes and activities.
At common law, an applicant organization will be determined charitable only if it meets two fundamental requirements:
1. The organization's purposes must be exclusively and legally charitable.
2. It must be established for the benefit of the public or a sufficient segment of the public. (Source)
The categories that are considered charitable are:
- purposes for the relief of poverty;
- purposes for the advancement of education;
- purposes for the advancement of religion; and
- other purposes beneficial to the community in a way the law regards as charitable.
(Source)
I've been having a difficult time understanding the workings of the rules, especially since they were originally written a couple of hundred years ago. Canada also has a tradition of common law, which essentially means that the law is determined by past cases, and the courts are very reluctant to rule in opposition to preceding rulings. It's up to the government to change the laws.
Because of the ways the charity rules are written, charities are very restricted in what they can do, and basically any work that aims to change the laws or society will not be considered charitable.
It almost seems to me that the charity rules are deliberately written to restrict social change work from happening and to protect the status quo.
Animal rights organizations, advocacy groups, even Greenpeace can't get charitable status in Canada. Why? Because these organizations want to change the way the world is – an effort that is not endorsed by Canada's government.
Not being able to issue tax receipts to donors means that organizations that are not charities will not likely receive large gifts or be able to apply for grants from foundations.
Even though systemic change may be what is needed to solve issues of poverty, health, and animal welfare, the government ties the hands of organizations that might be able to work on these issues by restricting their work to treating symptoms and offering band-aid solutions.
