1.
Responding to Federal Charity-Bashing
and CRA Audits
NetSquared November 14, 2014

2.
Gareth Kirkby
Based On Findings From My
Master’s Thesis
M.A. in Professional Communication
Royal Roads University
GarethKirkby.ca
Contact: @GarethKirkby (Twitter)

3.
I Interviewed
• 16 charity leaders
o in 5 provinces & 5 charity sectors
• 5 charity-sector “experts”
Almost all wanted to be kept anonymous.
I also read widely and deeply in the academic literature on
the Canadian volunteer sector, related government
regulations, social movement and contention theories,
resource mobilization for social change theory, and
framing theory for social change.

4.
Post-2006 Political Environment
 Groups defunded
 Groups shut out of policy consultation
 Women’s & development groups major target
 2,000 federal scientists laid off
 Science programs eliminated
 Environmental regulations much weakened
 See Voices-Voix website for very long list

5.
Natural Resource Minister’s Jan. 9,
2012 ‘Open Letter’
“For our government, the choice is clear: we need to
diversify our markets in order to create jobs and
economic growth for Canadians across this country.
We must expand our trade with the fast growing Asian
economies.”
— Oliver, J. (2012, January 9). An open letter from Natural Resources
Minister Joe Oliver. The Globe and Mail. Retrieved from
http://www.theglobeandmail.com

6.
Framing an Internal Enemy
“These groups threaten to hijack our regulatory system
to achieve their radical ideological agenda. They seek
to exploit any loophole they can find, stacking public
hearings with bodies to ensure that delays kill good
projects. They use funding from foreign special
interest groups to undermine Canada’s national
economic interest.”
— Oliver, J. (2012, January 9). An open letter from Natural Resources
Minister Joe Oliver. The Globe and Mail. Retrieved from
http://www.theglobeandmail.com

7.
New Political Environment
Interviewed Charities Had Experienced:
 Rhetoric: being labeled money-launderers, criminal
organizations, terrorist organizations
 Changed regulations and reporting requirements
 Stepped up “political activity” audits by Canada
Revenue Agency

8.
Government Shapes Spaces
“Governments have a big role to play in delimitating
spaces for political action” including shaping terms of
access and opportunities for participation, access to
resources, and empowering certain actors as more
legitimate than others.”
— Laforest, 2013a, p. 235

9.
My Research Question
 How are the rhetoric, changed regulations, and the
threat of “political activity” audits affecting charitable
organization and their ability to pursue their Missions

10.
Culture of Fear
“Why are you asking me these questions?”

11.
Political Activity
Political activities seek to pressure the government on
an issue related to the charity’s purpose. Activities are
permitted if they are non-partisan and if the charity
devotes substantially all of its resources to other,
charitable, activities.
—Lasby & Vodarek, 2011, p. 545
Can be up to 10% or 20% of organizations resources,
depending on size.

12.
Answer: How Affecting Charities
Impacts on Charities that Advocate:
 Targeted charities: Energy oriented environmental,
development-human rights, union-funded
 Charities “muffled” and “distracted”
 Charity “chill” affecting communications, internal
processes
 Communications: content, tone, channel, frequency
 Charity leaders express strong emotions – fear, anger,
bullied

13.
Muffled
“We’re much, much more cautious than we used to be.
We’re taking on different issues and we’re taking
them on in different ways.”
“Some [organizations are] more cautious than others but
all of us are more cautious than is healthy.”

14.
Distracted
“So, yes, it takes up time, and money, and energy,
and resources to be able to gather all the
documentation and you know, it takes you away
from the other good work that you would
otherwise be able to do.”

15.
Muffled and Distracted
“Canadian environmental charities get less than [3%] of
charity giving. They’re the bottom feeders of the
charitable funding. The resources are too tight to risk
them, and so I bet a lot of charities are doing a cost-benefit
analysis on their communications and the risk
posed by CRA audits and the revocation of their status
and saying, ‘This isn’t worth our scrutiny.’ I’m sure
there are lots of charities . . . keeping their head
down.”

16.
Affects on Charities
Additional Impacts on Charities
 Reputation damage affects donations
 Long-term health of charities threatened
 Social contribution of charities reduced
 Effectiveness of service-delivery charities reduced
 Increasing internalization of “advocacy” as a “bad
thing” by charity-volunteer sector

17.
Key Findings – Charity Responses
 Charities try to focus on Mission activities
 In reality, many are “distracted” from their Missions
o Learning regulations, workshops, peer training
o Changing internal processes
o Considering new structures — nonprofit arm
 Muffling communications
 Working through umbrella organizations
o Upbeat communications campaign?
 Contention

18.
Sharing “Best Practices”
 Detailed tracking of all activities
 Increasing “political activity” where deficient
 Legal training of staff & board
 Ongoing peer training to keep and advance knowledge of
regulations and practices
 Informing supporters of complaints, actions
 Adding non-profit arm with fewer limitations
Note: Many charities are over-reacting and altering
communications more than they need to. Contact Gareth
Kirkby if your organization wants to align their responses to
their actual level of risk tolerance.

19.
Contentious Responses
 Making a point of not changing anything
 Avoiding diversion of resources
 Considering a lawsuit for abuse of power etc?
 Building same-sector, cross-sector links & joining
sectoral umbrellas and Imagine Canada
 Adding nonprofit arm and transferring programming
 Running Voices-Voix website
 Opposition Party outreach for 2015 election platforms
 Door to door ‘education’ in vulnerable ridings

20.
Key Findings
 Advocacy chill is affecting charities
 Government is attempting to narrow policy
conversations
o With some success
 Government is corrupting democratic processes
o By treating as political enemies and enemies of the state,
those civil-society groups with different public-policy
preferences from government
o By politicizing CRA to fight the government’s policy
battles

21.
How Government Corrupted CRA
 Government created “funnel” to channel CRA to audit
certain charities
o Rhetoric
o $8 million, now $13.4 million funding
o Directions to audit for “political activities”
o Conservative political staffer created Ethical Oil
o EO filed complaints, Sun TV encouraged complaints
(political staffer returns to government, promoted to PMO)
o CRA staff target charities with complaints about political
activities or similar process

22.
How: Government Created ‘Funnel’
Ethical Oil
founded and
files
complaints
CRA audits
charities
with
complaints,
political
activities
Rhetoric and
$8 million
Environmental, development, union-funded
charities targeted for audits

23.
But Why?
“The priority of this government is to push through a
fairly aggressive resource extraction agenda. Um, you
know, boost the oil and gas industry and the resource-extracting
sector in order to maximize the profits in
those sectors. And create jobs in those sectors,
supposedly. And . . . where it finds opponents, where
it finds points of opposition, points where it does not
fancy what it’s hearing, then it will remove them.”
— Anonymous, personal communication, April 15, 2014

24.
Implications for Society
 Society losing input of experts re vital issues
 Poor public policy decisions could result
 Collateral damage to non-target charities
 Accumulating damage to civil society
 Polarization of the body politic

25.
Government Actions Post-2012
 Charity reputations damaged by rhetoric, audits
 Charities distracted from mission
 Charity voices muffled
 Now: Unions ‘defanged’ with Bill C44
 Next: Some charities lose tax status?
 2015: Nonprofits?

26.
Can Charities Fight Back?
“What [the government is] doing is making it easier for
them to drive an agenda without scrutiny, and that’s
problematic. But there’s also much greater capacity
for the public to mount opposition to that because of
where we’ve gone technologically.”

27.
Align Activities to Acceptable Risk
 Many charities are over-reacting and altering
communications more than they need to. Contact
Gareth Kirkby if your organization wants to align
their responses to their actual level of risk tolerance.

28.
Contact Me
Website: GarethKirkby.ca
Twitter: @GarethKirkby
Find me on LinkedIn

29.
References
Charmaz, K. (2006). Constructing grounded theory: A practical guide through qualitative analysis.
London: Sage Publications.
Falk, B.J. (2008). Learning from history: Why we need dissent and dissidents. International
Journal, 64(1), 243-253. Retrieved from
http://www.jstor.org.ezproxy.royalroads.ca/stable/40204467
Hit list. (n.d.). Voices-Voix. Retrieved from http://voices-voix.ca/en/hit-list
Laforest, R. (2013a). Shifting scales of governance and civil society participation in Canada and the
European Union. Canadian Public Administration, 56(2), 235-251. doi: 10.1111/capa.12016
Lasby, D., & Vodarek, L. (2011). Public awareness and policy activities of charities. The
Philanthropist, 23(4), 545-550. Retrieved from
http://thephilanthropist.ca/index.php/phil/article/view/888
McCarthy, J. D., & Zald, M.N. (1977). Resource mobilization and social movements: A partial
theory. American Journal of Sociology, 82(6). 1212–1241. Retrieved from
http://www.jstor.org/stable/2777934
Muttart Foundation. (2013b). Talking about charities 2013: Charts compiled. The Muttart
Foundation. Retrieved from http://www.muttart.org
Oliver, J. (2012, January 9). An open letter from Natural Resources Minister Joe Oliver. The Globe
and Mail. Retrieved from http://www.theglobeandmail.com
Tilly, C. (2004) Social movements, 1768-2004. Boulder, CO: Paradigm Publishers.
Tilly, C. (2005). Regimes and contention. In T. Janoski, R. Alfort, A. Hicks & M.A. Schwartz (Eds.),
The handbook of political sociology: States, civil societies, and globalization (pp. 423-440).
Cambridge, U.K.: Cambridge University Press. Retrieved from
http://lib.myilibrary.com.ezproxy.royalroads.ca/Open.aspx?id=43069