Dying With Dignity’s loss of charity status allows for more political freedom

Canada’s largest right-to-death advocacy group lost its charitable status this week. And that may not be such a bad thing.

The group confirmed that the Canadian Revenue Agency had stripped it of its charity status in a lengthy letter that claimed it had been “registered in error” when it first received the status in 1982 and was renewed in 2011.

The Toronto Star notes that the CRA ruled the group – which refers to itself as “a health and educational charity focused on promoting choice and dignity at end of life” – was registered with a political purpose and is not focused enough on charitable work.

You would think that a non-profit group that has held charity status for more than 30 years would be a bit sore about suddenly losing it, but Dying With Dignity seems to be taking the about-face in stride.

The group’s board of directors have decided not to oppose the annulment. The group will retain its charitable status until about Feb. 15, at which point it will shift into its new role as a non-profit organization.

So why is Dying With Dignity so quick to accept the resolution?

“Although there are some negatives of not being a charity, there are some consequentially positive things that come from this change,” said Mark Blumberg, a charity law expert and partner at Toronto’s Blumberg Segal LLP.

“When the board had to make a decision, they took into account that if you want to get into an appeal, for example, there is time, effort energy and cost that goes into it. They decided to keep the assets they have and continue doing what they are doing.”

According to Blumberg, there are 86,000 registered charities in Canada and each year, between 600 and 700 of them lose their status. Most of those lost their status simply because they don’t refile, a handful more have it revoked for non-compliance. Perhaps one or two have their status annulled, like in this case.

“It is a rare thing that a group is annulled as compared to revocation,” Blumberg told Yahoo Canada News. “With revocation, the consequences are more dire, or stark… you lose all your assets. When you have an annulment, on the other hand, you lose your charity status but you don’t lose your property and assets.”

A note posted to the Dying With Dignity website says that because the Canadian Revenue Agency is annulling the group’s registered status, rather than revoking it, the group will retain its assets and will be able to continue operating.

"As a result, DWD Canada will not only be able to continue its important work in the area of promoting choice and dignity at end of life, but it will also, after its conversion to a non-profit, be free to focus on political advocacy without constraints," the note reads.

There are upsides and downsides to holding charity status in Canada. And the matter of political participation is among the key issues.

Bill Harper, vice-president of operations at Imagine Canada, says charities are limited to spending no more than 10 per cent of their resources on political activities, like raising support for issues that are currently a matter of public debate.

“You are limited in terms of what you can do, the kinds of activities. In particular you can only really do charitable activities,” Harper told Yahoo Canada News. “A great many charities don’t do any (political activity) at all, and some others will do a minor amount, in terms of applying their resources.”

Other charities, however, are thrust into a larger political role simply by through its issue of focus. Assisted suicide has become a topic of significant political debate recently. The Supreme Court of Canada is considering its stance prohibiting assisted suicide, and a proposed law that would make doctor-assisted suicides legal is currently in front of the Senate.

Charity law expert Mark Blumberg says the issue of “political debate” is often a matter of timing. As an example, slavery would have been considered a political issue 300 years ago.

“But today, slavery is not considered a political issue. It is considered a human rights issue,” he said. “This (assisted suicide), the CRA considers a political issue because there is legislation on it and there is the Supreme Court case.”

In an interview with the Vancouver Sun, Dying With Dignity Chair Jim Stephenson said the advocacy part of their mandate is likely to grow once they are no longer considered a charity.

"A charitable organization is restricted to having 10 per cent of its activities directed to changing public policy. If we’re no longer a charity, we no longer have those restrictions. We’ll look at that as an opportunity," he said.

Imagine Canada notes that there are three major benefits to being a registered charity: Benefiting from the positive perception that comes with being a charity, receiving favourable income tax treatment, and the ability to issue official tax receipts to donors.

A downside, indeed the biggest downside, for Dying With Dignity’s new status is no longer having donations to them be considered tax deductible. In his interview with the Sun, Stephenson said that while about 80 per cent of the group’s funding comes from donations, most of those are for small amounts that don’t qualify for a tax receipt.

"We know that some of our supporters are very strong in their support and will continue to support us and will be glad that we will be less constrained," he said. "We also know that some of our donations have come from larger donors and bequests and would be sensitive to the tax deductibility."

On the other hand, there are some drawbacks to holding charity status. For one, Harper says charities must follow strict rules about their governance, maintain and follow bylaws, and publicly disclose their books at the end of each year.

Charities must also use their resources in efforts that support its charitable objects. Non-profit organizations that are not considered charities have far more leeway as to how they operate.

As an aside, Blumberg said that many charities are not “transparent” about their amount of political activity.

“There are rules for charity, and those rules allow 99 per cent of charities to do a lot more political activity than they do. There needs to be some knowledge of what the rules are, and there needs to be compliance about it,” he said.