In Canada, federally registered charities can only use 10% of their resources for allowable political activities (non-partisan) that further their charitable purpose . These restrictions, known as the “10% rule,” are set in policy by the Canada Revenue Agency (CRA) and are an interpretation the Income Tax Act.

In response to concerns from the sector, many of them raised during the Voluntary Sector Initiative, CRA released a new policy statement on charities and political activities (CPS-022) in 2003. This policy statement provides some clarification, however, organizations such as Vancouver-based IMPACS, continue to urge the government to review the policies and interpretations of the Income Tax Act.

One result of the Voluntary Sector Initiative is the Code of Good Practices on Policy Dialogue. The code recognizes that charities have “valuable experience, expertise, knowledge and ideas” that can contribute to “better public policies and programs for all Canadians.” It is clear that charities have an important role to play in the policy process, and their advocacy work can help government develop appropriate policy solutions that will support vibrant Canadian communities.

Resources

CRA Policy Statement on Charities and Political Activities (CPS-022)
Effective September 2003

This policy statement describes the type of advocacy work charities can and can’t do under current CRA policies and includes scenarios and examples. It also provides background information about why this new policy statement was developed.

IMPACS- Institute for Media, Policy and Civil Society www.impacs.org
IMPACS is a Canadian charity committed to the protection and expansion of democracy and to strengthening civil society. Through their Charities and Democracies Project http://www.impacs.org/charities , they work with civil society organizations and the federal government to redefine the laws that restrict charities from effectively engaging in public policy.