A.
INTRODUCTION
On May 8, 2009, the
Charities Directorate of the Canada Revenue Agency (“CRA”)
released a draft policy document entitled Consultation
on proposed Guidance on the Protection of Human Rights and
Charitable Registration (the “Draft Guidance”).[1]
The purpose of the Draft Guidance is to provide guidelines
for determining whether or not an organization that is established
to protect human rights can be registered as a charity under
the Income Tax Act (Canada).[2]
As such, the Draft Guidance is highly relevant to human
rights organizations that are considering charitable registration,
as well as existing charities that engage in the protection
of human rights.
In general terms, organizations
that are seeking to become registered charities must have
purposes that are considered, at law, to be charitable and
for the benefit of the public. At common law, it has been
established that there are four categories under which a
charitable purpose must fall: the relief of poverty, advancement
of education, advancement of religion, and other purposes
beneficial to the community not falling under the first
three categories.[3]
These categories are commonly known as the four heads of
charity, and at common law, a charitable purpose that falls
under one of the first three categories is presumed to be
for the public benefit, while the fourth category must be
demonstrated to be for public benefit.[4]
Previous guidance from
CRA on this matter was in the form a brief 2003 Summary
Policy on Human Rights,[5] which is to be replaced
by the final version of the Draft Guidance. The Summary
Policy consisted of only a brief statement explaining that
charities cannot promote legislation, which would constitute
a political purpose, but could conduct and disseminate research
regarding the maintenance and observance of human rights,
which would fall solely under the category of advancement
of education. The Draft Guidance significantly broadens
the scope of acceptable charitable purposes by providing
guidelines on how the protection of human rights may be
properly characterized as advancing all four heads of charity.
Charities that have as one of their purposes the protection
of human rights must therefore ensure that such purpose
fits within one of the four heads of charity. This Charity
Law Bulletin summarizes the content of the Draft Guidance
and its importance to current and prospective charitable
organizations in Canada.
B.
BACKGROUND AND PRELIMINARY ISSUES
The Draft Guidance emphasizes
the fact that the protection of human rights is a nationally
and internationally significant issue of public policy,
as demonstrated by the entrenchment of the Canadian Charter
of Rights and Freedoms[6]
in the Canadian Constitution, numerous provincial and territorial
human rights legislation,[7]
and various international conventions and treaties.[8] The Draft Guidance also
states that Canadian jurisprudence has indicated that the
protection of human rights can be a charitable purpose,
such as the case of Action by Christians for the Abolition
of Torture (ACAT) v. The Queen,[9]
in which the court stated that an organization with the
purpose of abolishing torture is, on its face, a charity.
The Draft Guidance establishes
a clear definition of what constitutes “human rights”, which
are those individual rights and freedoms acknowledged, within
their prescribed limitations, in the following legal instruments:
- Canadian Charter of Rights and Freedoms;
- Canadian Bill of Rights;
- Canadian Human Rights Act;
- Provincial and territorial human rights legislation;
- Those parts of the United Nations’ International Bill of Human
Rights that are binding on signatory countries under
international law and that Canada has ratified, which
includes:
- The International Covenant on Civil and Political rights (including
its First and Second Optional Protocols);
- The International Covenant on Economic, Social and Cultural Rights;
and
- All other multilateral human rights treaties to which Canada is
a party,
which include:
- United Nations Conventions, Covenants, and Protocols;
- International Labour Organization Conventions;
- Organizations of American States Conventions; and
- Geneva Conventions and Protocols.
Other human rights instruments
may also be included in this definition, provided that the
relevant portions of the instruments are “sufficiently similar”
to the human rights that are established in this list, but
no further explanation is provided regarding what might
be considered to be sufficiently similar.
The “protection of human
rights” is defined in the Draft Guidance as “activities
that seek to encourage, support, and uphold human rights
that have been secured by law, internationally or domestically.”
It is expressly stated that the protection of human rights
does not include advocacy for new legal rights at any level,
both nationally and internationally.
C.
DETERMINING ELIGIBILITY FOR CHARITABLE REGISTRATION
The Draft Guidance outlines
a number of general considerations that affect an organization’s
eligibility for charitable registration. In order to be
registered as a charity, an organization must have exclusively
charitable purposes, and must describe the activities it
will conduct to achieve those purposes. A registered charity
must operate to provide a tangible benefit of the public,
and any private benefit must be reasonable, necessary and
incidental. This requirement is particularly important for
charities that are not categorized under any of the first
three heads of charity (relief of poverty, advancement of
education and religion), which are generally presumed to
be for the public benefit. A corollary consideration is
whether or not there are any restrictions to the charity’s
provision of the public benefit, which will generally be
permitted if available to a sufficient segment of the public.
Lastly, registered charities are reminded that they must
comply with Canada’s anti-terrorism legislation, which may
be pertinent for human rights charities that often work
in an international context.
Several of these considerations
are particularly tailored to apply to the context of human
rights charities. When applying for registration, the Draft
Guidance explains that human rights organizations should
set out its charitable purposes and activities by specifying
(1) the source or concept of human rights that will be applied
to their activities; (2) the specific location, country,
or range of countries in which each activity will be carried
out; and (3) a detailed description of all the present and
proposed activities they plan to undertake to fulfill their
purposes.
According to the Draft
Guidance, the public benefit of protecting human rights
may be intangible, but will still be considered to be for
the benefit of the public because of the clear general consensus
that it is a benefit, as evidenced by the vast array of
domestic and international legal instruments that have the
purpose of protecting human rights. Moreover, CRA recognizes
that the breadth of human rights issues means that a charity’s
focus on particular issues, geographic regions or vulnerable
groups should be acceptable as long as the restriction of
the public benefit is justifiable.
D.
HUMAN RIGHTS AND THE FOUR HEADS OF CHARITY
The Draft Guidance provides
specific examples of how the protection of human rights
could further each of the four heads of charity. Although
each head of charity is addressed separately, it is certainly
possible that a charity’s purposes could involve more than
one category.
1.
Relief of Poverty
This category generally
involves the provision of the necessities of life, such
as food, clothing and shelter, or amenities that are generally
taken for granted. According to the Draft Guidance, the
relief of poverty also includes the relieving of human suffering
and distress, as established in McGovern and others v.
Attorney General. In this regard, human rights
charities can engage in the relief of poverty by providing
for the needs of people whose human rights have been infringed
upon. The Draft Guidance provides a number of examples of
how human rights charities may relieve poverty, such as:
·
operating shelters to provide
housing and basic necessities for victims of human rights
abuses;
·
providing psychological counselling
for victims of human rights abuses; and
·
establishing legal clinics
for the poor, to ensure their access to legal protection
and remedies as provided by existing human rights legislation.
2.
Advancement of Education
According to established
case law referenced in the Draft Guidance, the advancement
of education, as a charitable purpose, means training the
mind; advancing the knowledge or abilities of the recipient;
raising the artistic taste of the community; or improving
a useful branch of human knowledge through research. The
basic purpose under this head of charity is to increase
human knowledge, which must be achieved through a structured
attempt at education, a clear teaching or learning component
that is available to students and the general public, and
must not be intended to promote a particular point of view.
The Draft Guidance provides a number of examples of how
human rights charities may advance education, such as:
·
conducting research and analyses
of laws, institutions, and practices affecting the protection
of human rights;
·
preparing and disseminating
academic reports on issues related to the protection of
human rights;
·
supporting the development
of university courses and educational materials for those
courses on human rights, and holding conferences/workshops
for students and faculty to further their education as it
relates to human rights issues; and
·
providing scholarships for
students doing graduate work on the subject of human rights.
3.
Advancement of Religion
The advancement of
religion as a charitable purpose involves promoting and
manifesting the doctrines, observances, and practices of
a religion. Human rights charities may advance religion
by clearly establishing the connection between the doctrines
of the religion that support human rights, and the purposes/activities
of the charity. The Draft Guidance provides a number of
examples of how human rights charities may advance education,
such as:
·
preparing faith-based resources
on the protection of human rights for use in places of worship
and other religious organizations;
·
preaching about the protection
of human rights in places of worship;
·
preparing worship materials
and special liturgies on the protection of human rights;
·
holding workshops, seminars,
and study sessions on issues related to the protection of
human rights as they are expressed in the sacred texts;
and
·
providing spiritual counseling
and pastoral care for victims of torture and other human
rights abuses.
4.
Other Purposes Beneficial
to the Community
The fourth head of
charity provides for charitable purposes that do not fall
under the first three heads, and there are many ways in
which human rights organizations may be charitable in this
regard. The Draft Guidance identifies that human rights
organizations may often have purposes that are already recognized
under the fourth head, including: (1) mental and moral development
of the community, such as promoting awareness of the protection
of human rights; (2) upholding the administration and enforcement
of human rights law, such as monitoring and reporting on
the fulfillment of human rights obligations by various treaty
signatories; and (3) preserving human life and health, such
as protecting victims of human rights abuses.
E.
THE IMPORTANCE OF UNDERSTANDING POLITICAL
PURPOSES AND ACTIVITIES
1.
Political Purposes
Under the Income
Tax Act and at common law, organizations cannot be charitable
if they are established for a political purpose. As such,
the Draft Guidance emphasizes the fact that charities engaged
in protection human rights will often need to work outside
of existing political and legal structures, and therefore
must ensure that the charitable purposes are not political
as well.
The following is a
list of examples of political purposes mentioned in the
Draft Guidance:
·
To further the interests
of a particular political party;
·
To support a political party
or candidate for public office;
·
To retain, oppose, or change
the law, policy, or decision of any level of government
in Canada or a foreign country; and
·
To engage in pressure tactics
on governments such as swaying public opinion, promoting
an attitude of mind, creating a climate of opinion, exercising
moral pressure, when the aim of those tactics is to obtain
a change or prevent a change in the laws and policies of
the legislatures and governments.
Therefore, human rights
charities will have political purposes if they undertake
purposes such as lobbying governments to amend human rights
law or to sign a particular treaty. On the other hand, the
purpose will not be political if the charity is simply investigating
and reporting human rights violations of existing legislative
instruments.
The Draft Guidance
provides further guidelines for charities that seek to operate
internationally, cautioning that the concept of “political
purposes” is not universal. For example, the death penalty
is not uniformly accepted or rejected as a human rights
abuse in every country, and therefore, advocacy against
the death penalty may be political in nature in some countries
and non-political in others.
2.
Political Activities
While political purposes
are always impermissible, CRA recognizes that human rights
charities may engage in some non-partisan political activities
that support that charity’s purposes. A charity may do so
only under two conditions. Firstly, the charity must devote
substantially all of its resources to its charitable activities.
This means that no more than 10% of a charity’s resources
can be used for political activities (this is extended to
20% for smaller charities). Secondly, the political activities
must be connected and subordinate to the charity’s purposes.
These parameters indicate
that a human rights charity can actually engage in activities,
such as pressuring governments towards legislative change,
if the activity falls within the said acceptable limits.
For example, an allowable political activity could involve
placing an advertisement in a newspaper to pressure the
government on a particular human rights law, provided that
this is connected and subordinate to the charity’s primary
activities. On the other hand, publishing advertisements
that praise or denounce a certain politician or political
party regarding their position on human rights would be
unacceptable.
F.
CONCLUDING COMMENTS
The Draft Guidance provides existing charities and applicant organizations
with far greater clarification of the relevant issues and
considerations in protecting human rights. Although there
are obvious difficulties in distinguishing between permissible
and impermissible political activities, the examples provided
in the Draft Guidance indicate that charities will have
a general practical framework to assess the suitability
of their activities. Both existing and potential registered
charities with an interest in protecting human rights are
encouraged to examine the Draft Guidance to ensure that
their purposes and activities are considered to be charitable
from the perspective of CRA.
