Charities operate in the 21st century, but the rules that govern them are based on 19th century interpretations of a law dating from the early 1600s! No other sector in the economy operates under such outdated rules and regulations and we are striving to change that!
This antiquated regulatory structure affects charities in many ways. Research published by the Mowat Centre identifies a few of these ways:
- Our service models are severely limited. For example, forced to use a 400 year-old definition of “charity,” charities can provide emergency assistance to help the poor, but are not allowed to work to stop poverty in the first place.
- The kinds of partnerships that charities can engage in to deliver services are very limited. Rules about “direction and control,” for example, mean that international development charities are required to take a patronizing approach to local partners, micro-managing their initiatives. This approach is, ironically, at odds with how the government implements its own development programs.
- Charities are limited in the scope and amount of policy work they can do. Even where a policy change is the best means to achieve their charitable purposes, charities have to focus on giving a person a fish rather than teaching that person to fish.
- The rules make it difficult for charities to generate their own income. Business activities and income generation are vital to funding charities’ activities, especially as government funding declines and donation levels stagnate.
The road ahead:
Legal and regulatory reform is a very complex issue with no simple answer. Getting to a place where change can happen is a long process and would take significant resources, investment and a receptive audience on the government side. What we need and are working on is:
- a strong message,
- bringing key influencers to the table,
- cultivating connections and an audience at the federal level.
There is hope!
In recent years, we’ve seen countries like the United Kingdom, New Zealand, Ireland, and Australia – all of which operated under the same rules as Canada – modernize their charity law and regulations. We can draw from their approaches and experiences.
And best of all, we may now have that receptive government audience we need.
What we are doing
The Consultation Panel on political activity by charities recommended that the government establish a process to look at a range of regulatory issues and develop solutions in partnership with charities.
The Prime Minister, in his mandate letter, instructed the Minister of Justice to “[w]ork with the Ministers of Finance and National Revenue to develop a modernized regulatory and legal framework governing the Charitable and Not-for-Profit sectors.”
We have been encouraging the federal government to establish a properly-resourced process so that – in partnership with them – we can do the research, consultation, and outreach necessary to design a reform package. After 400 years, there seems to be an opportunity for change. We need to get it right, in case we have to live with the consequences for another 400 years.
Help us help your organization, your sector!
- Read up on the issues in the Mowat Centre study: Turning a Corner: Laying the Groundwork for Charity Regulatory Reform in Canada.
- Learn more about Charities Day on the Hill and collective advocacy efforts.