Charity law has a rule known as the doctrine of political purposes. According to this doctrine, that which is "political" cannot be "charitable" and vice versa. This rule of law is very easy to state in the abstract and may at first even seem self-evident. It has, however, proven over the years to be very difficult to apply in practice. In fact, the doctrine has been invoked by courts to reach what many consider confusing conclusions regarding what is and is not charitable.

By way of example, the following statements are supported by established precedents: It is charitable to prevent cruelty to animals. It is nevertheless non-charitable to seek the abolition of torture (of humans). It is charitable to operate an abortion clinic. Courts have, however, withheld charitable status from institutions advocating a view on the operation of abortion clinics on the basis that judges must remain neutral in the abortion debate. It is charitable to undertake certain pedestrian tasks, such as ringing bells annually to commemorate the restoration of the monarchy or promoting "good housewifery" through an annual award for the woman with the best kept cottage. On the other hand, the performance of an activity as critically important to society as appeasing racial tension has been held to be non-charitable (although Canada Revenue Agency's Policy Statement CPS-021 now allows charities to be organized for the purpose of promoting racial equality).

How are we to make sense of these seeming contradictions? In short, the non-charitable purposes identified above have all fallen prey to the doctrine of political purposes. This essay critically reflects upon this doctrine. What are its practical implications? What are its rationales? Do they make any sense? What is really going on here?

What are the practical implications of the doctrine of political purposes?

As indicated above, the doctrine of political purposes is a rule of charity law providing that that which is "political" is not "charitable" and vice versa. The practical implications of this are enormous. Charitable institutions are required to be established and operated for exclusively charitable purposes. Consequently, the enormous privileges of charitable status, eg, exemption from income tax, ability to issue official gift receipts, etc, stand to be lost if an institution has a political purpose at the time of its creation or if it, subsequent to its creation, adopts such a purpose. Also, funds applied by a registered charity in furtherance of a political purpose will not count as expenditures in fulfillment of its disbursement quota under the Income Tax Act.

Of particular interest to gift planners may be the implications of the doctrine for "purpose trusts". It is very common for transfers of property to charity to be structured in the form of purpose trusts. These are trusts under which property is transferred to a person - the trustee - subject to an enforceable requirement that the trustee apply the transferred property to achieve a specified purpose.

The point to be aware of is that a purpose trust will fail - meaning that the trustee may be obliged to return the property to the transferor - if the specified purpose is deemed to be "political". This is because, with very few exceptions, the only purpose trusts recognized by the law are those established to achieve exclusively charitable purposes.

In some circumstances, it is possible for gift planners to impose an enforceable condition on the transfer of property to charity without establishing a purpose trust. Such transfers are commonly described as "conditional gifts". What happens if a donor gifts property to a charity subject to the condition that it be applied for a political purpose? For the reason indicated above, the registered charity may lose its charitable registration if it accepts such a gift and carries out a purpose that is deemed political. Curiously, based upon the technical requirements of the Income Tax Act, it appears that an official gift receipt may nevertheless be issued to the donor.

How are charitable and political purposes distinguished?

Charity law does not actually define the terms "charitable" and "political". It instead provides a system of categorization whereby some purposes are categorized as charitable and others are categorized as political. The task of distinguishing charitable from political purposes therefore requires an understanding of the specific purposes that comprise these two respective categories. In terms of charitable purposes, the law recognizes as charitable four categories of purposes: the relief of poverty, the advancement of education, the advancement of religion and a residual category of "other purposes of public benefit".

In terms of political purposes, at least some of the purposes included in this category pose a rational restriction on the scope of charity. For example, courts have, not surprisingly, categorized as political the promotion of a political party or candidate for public office. Is there anything more "political" than partisan participation in a public election?

What is less satisfactory is the fact that courts have also characterized as political any purpose that entails seeking a change of any sort - even unquestionably altruistic changes - to the law or policy of a domestic or foreign government, promoting a point of view or attitude of mind, advocating in favour of one side of a controversial social issue and creating a climate of opinion. It is here where the doctrine of political purposes has been unduly broad in its categorization of political purposes.

What is the rationale for the doctrine of political purposes?

Over the years, courts have offered a number of reasons for the manner in which they have distinguished charitable from political purposes. The articulated reasons - considered below - are surprisingly deficient. In fact, the justifications offered by courts for the doctrine of political purposes are often so poorly theorized as to leave no room for doubt that reform of the doctrine is needed.

Rationale #1 - time honoured practice:

Many of the leading cases dealing with the doctrine of political purposes suggest a judicial willingness to apply the doctrine if for no other reason than because courts appear to have consistently done so in the past. This is not especially surprising in a regime of law that relies upon stare decisis - let precedent stand - as one of its guiding principles.

The problem here is that mechanical adherence to precedent allows for the possibility of an initial errant decision spawning an entire doctrine - one ultimately based upon a mistake of law. This is exactly what appears to have happened with the doctrine of political purposes.

All leading decisions dealing with doctrine of political purposes can be traced back to Bowman v. Secular Society in 1917. In that case, one of the judges, Lord Parker, summarized the historical precedents at that time with the observation that political purposes have "always" been considered non-charitable.

As it turns out, Lord Parker was a poor historian, since no decision prior to Bowman had clearly established this principle. His observation has been variously described as "inaccurate", "not one which is established with any certainty by high authority in England", "difficult to reconcile with certain decided cases", based upon a "paucity of judicial authority", "clearly wrong", "considerably overstated", and "not supported by an examination of reported cases".

The application of the doctrine of political practice as a time honoured practice thus only takes us so far, since the doctrine ultimately derives from an errant description of the law provided by Lord Parker in Bowman.

Rationale #2 - the law is perfect as it is:

In order for a purpose to be categorized as charitable, a court must conclude that attaining that purpose will be of "public benefit". Where the purpose involves seeking a change to the law, courts have understood this requirement to mean that categorizing that purpose as charitable requires a finding that it is of public benefit for the law to change.

The alleged difficulty that this creates is that it requires courts to recognize the imperfection of the law. Several courts have concluded that the law would "stultify" itself (cause itself to appear illogical) if it were to accept the mere possibility that it is not perfect. What is necessary, according to this rationale, is for courts to proceed from the assumption that the law is perfect, which precludes a finding that it is of public benefit for the law to change.

This rationale is absurd. Judges often suggest amendments to the law, including, ironically, amendments to charity law. Moreover, the law itself takes account of its fallibility in multiple ways, eg, dissents, overrulings, rules of statutory interpretation designed to deal with mistakes in law, etc. The very presence of reasons for judgement has been observed as inviting the possibility that those reasons may be "right or wrong, sound or unsound, adequate or inadequate". It is simply descriptively inaccurate to assert that the law assumes its own perfection and theoretically unsound to assert that it must do so.

Rationale #3 - it is inappropriate for courts to "weigh in" on public debates:

As indicated above, a purpose must be found to be of public benefit in order for it to be categorized as charitable. Courts have held that finding certain purposes to be of public benefit is beyond their institutional capacity. The idea here is that courts should not weigh in on public debates by finding public benefit in law reform efforts or in the promotion of specific points of view on controversial issues. This alleged incapacity precludes courts, so the argument goes, from opining one way or the other as to whether political purposes are of public benefit. The denial of charitable status to political purposes is the practical consequence of judges remaining silent on whether the public benefit test is met.

This rationale is remarkably superficial. First, it is illusory to conclude that a court can necessarily remain neutral on the issue of public benefit simply by declining to make an explicit finding on the matter. In many instances, remaining silent on the issue of public benefit will be tantamount to expressing a value judgement of sorts. For example, remaining silent as to the public benefit of some proposed changes to the law - eg, the abolition of human torture - is itself an implicit denial of the inviolability of the core values upon which a civilized system of law is based.

Second, this rationale is inconsistent with actual judicial practice. Judges frequently play a role in law reform. In their written reasons for judgement, judges regularly suggest desirable statutory reforms. Also, judges often give effect to law reform by modifying the judge-made rules of the common law or through judicial review under the Charter of Rights and Freedoms. Is there some reason why judges should have a diminished capacity when presiding over charitable matters?

Third, this rationale frames the public benefit test in too particularized a fashion. Does opining upon the public benefit of a political purpose necessarily require judges to consider the public benefit of the particular law reform being sought or the particular point of view being advocated?

In the context of religion, courts don't opine upon the public benefit of individual religious doctrines. Having contented themselves that there is public benefit in "religion", they focus their efforts on confirming that what is before them constitutes :"religion".

Why not apply a similar abstract approach to public benefit analysis in the context of political purposes? Courts could, for example, simply accept that there is public benefit in public debate or in certain law reforms, eg, reforms that will bring the law closer to an ideal otherwise recognized by the law as charitable.

Rationale #4 - charity and politics are "just different":

If for no other reason than because charity and politics are "just different", courts have been inclined to pigeonhole them in mutually exclusive categories. There is admittedly something to this rationale, since charity and politics are not identical. The problem is that the law has done a poor job of mapping the boundary between the two.

Proceeding from the inarguable premise that charity and politics are not synonyms, judges have often made a leap of logic to conclude that they must therefore be antonyms. But the conclusion here does not follow from the premise. Charity and politics can be different, but this does not in and of itself preclude the possibility for overlap. What is desperately needed is an attempt to define and rationalize the scope for such overlap, which is something that courts have generally avoided.

What courts and regulators have instead done is to provide a variety of thinly reasoned bases upon which to distinguish charitable from political purposes. Here are just a few examples of contradictory or otherwise problematic propositions supported by authority.

Rule: An institution will be considered to have a political purpose if it frequently engages in advocacy activities, but not if it engages in the exact same activities infrequently. Problem: It is the purpose for which an institution carries out an activity - not the frequency with which it engages in the activity - that is relevant to determining whether the institution is charitable.

Rule: It is charitable to educate from a point of view, but political to promote a point of view. Problem: This distinction is unworkable in practice.

Rule: Attempting to persuade others is political unless the attempt at persuasion is "well-reasoned". Only positions based on "factual information" are well-reasoned. Problem: This implies that persuasion based on moral or theoretical knowledge is political, even though the advancement of such knowledge has elsewhere been held to be charitable.

Rule: It is political to advance views regarding the "proper forms of conduct, though not mandated by present law, to be urged on other members of the community". Problem: This is incoherent, given that it is charitable to advance religion.

Rule: Passively responding to unsolicited questions from the media may be charitable, but it is political to engage the media proactively. Problem: This is legalistic. What principled distinction flows from determining who contacted whom first as between a charity and the media?

Rule: Educational curricula proceeding from the premise that peace is preferable to war are charitable, but not curricula proceeding from a particular premise regarding how best to achieve peace. Problem: This implies that "charity" is restricted to that which is uncontroversial. This is irreconcilable with those instances in which controversial purposes have been held to be charitable.

This list could go on. The main point is that the proposition that charity and politics are distinguishable is incapable of providing a satisfactory justification for the doctrine of political purposes if in practice the law is unable to draw the distinction rationally.

Conclusion

It is time to rethink the doctrine of political purposes. This necessarily requires asking some big picture questions about the legal understanding of "charity". One gets the impression reading some of the cases on political purposes that judges viscerally reject the charitability of such purposes but struggle to account cogently for their intuition in this regard.

Unable to point to an established theory of "charity", they do their best to articulate reasons for withholding charitable status. The difficulty is that, with all due respect, the articulated reasons are frequently unconvincing and/or inconsistent with cases in which charitable status has been granted. The result has been an overly broad categorization of political purposes and a disjointed model of what is charitable at law.

What appears to be missing here ultimately is a theory of charity to guide judicial decision-making. Until such a theory is provided, charity law will continue to manifest the lack of coherence reflected in the doctrine of political purposes and charities will continue to be unduly restricted by the application of this doctrine.

For further information: Prof. Adam Parachin, Professor of Law, University of Western Ontario, 519/661-2111, ext 81445, aparachi@uwo.ca; a more extensive version of this paper was presented at the Fourth National Symposium on Charity Law.