Policy Research > Other articles > Volunteer Sector Initiative
Volunteer Sector Initiative
Strengthening the relationship between voluntary organizations and the Federal Government
The Voluntary Sector Initiative (VSI) was established to determine how the federal government can help to strengthen the voluntary sector (charities and non-profit organizations). A number of joint tables (half the members were government officials, half were voluntary sector leaders) were formed to examine specific issue areas, such as volunteerism, information management and the regulatory framework that charitable organizations must work under. Family Service of Toronto President Gordon Floyd has been involved with the VSI since its inception in June 2000 and is now one of six voluntary sector leaders on the Joint Steering Committee that oversees the entire initiative. Here is a brief review of some of the work of the VSI and how it may affect FSA Toronto.
Joint regulatory table
Volunteer sector representatives and government officials have worked together to examine the way the voluntary sector is regulated and to find ways to improve the situation. The federal government, through the Canada Customs and Revenue Agency (CCRA) regulates the activities of charitable organizations. The Joint Table sought ways to ease some of the restrictions placed on charities and to make it easier for charities to comply with the regulations.
- Annual reporting system
Every charity must file annual reports with the CCRA. Segments from these reports, including information about expenditures, are now available on the CCRA's Web site for anyone to view. "Now donors to Family Service of Toronto are able to access the information that we file with the federal government," says Gordon. This change will lead to greater transparency about charities' financial operations and greater accountability to donors.
- Business activities
Many charities, including Family Service Association of Toronto, run businesses as a way of raising money to fund core activities. FSA Toronto is a member agency of Family Service Employee Assistance Program (FSEAP) that offers counselling services to the employees of major companies on a contract basis. Some private businesses have complained that competition from tax-subsidized charities is unfair but CCRA has accepted the Joint Regulatory Table's recommendation that charities can engage in business activities, as long as the work is related to the mission of the charity. "It is my view that FSEAP provides us with a way of delivering on our mission and in an additional way, through workplaces. It is an integral part of what we do," explains Gordon.
- Regulation of charities
Currently there is only one penalty for charities that do not comply with the CCRA regulations - de-registration (loss of the ability to issue tax receipts). This means that the penalty for filing a tax form late is the same as for a serious crime, such as fraud. The Joint Regulatory Table would like to see a more aggressive program of support and education around compliance.
The new program of support would include three levels of compliance short of de-registration that would include penalties such as temporary suspensions of status and late filing fees for charities that fail to file their returns on time. "Virtually everybody involved in the charitable sector wants to comply with the law," says Gordon. "FSA Toronto has good systems and is very sophisticated, but many of our community partners are too small to even know about all the rules - that doesn't mean they should be de-registered."
Making the regulatory process more transparent would give the public more information about charities and make it easier for charities to comply with the regulations.
Examine FSA Toronto's financial statements
Our 2001/2002 financial report is available on the Canada Customs and Revenue Agency Website at http://www.ccra-adrc.gc.ca/charities and follow the link to "Lists of Canadian Charities" from the menu on the left hand side of the page. Click on the link to "All Canadian Registered Charities". You will then have the option to view a list of all charities, or search for a particular charity. If you'd like to search for FSA Toronto, type "Family Service Association of Metropolitan Toronto" into the search engine.
Charity and advocacy
Another important issue facing charities in Canada is the amount of advocacy work that a charity can pursue. At present, the federal Income Tax Act prohibits charities from spending more than 10 per cent of their revenue on advocacy activities that are deemed too "political", but it doesn't define the difference between "political" and "charitable" activity.
FSA
Toronto Past President Gordon Floyd, through his work with the Canadian
Centre for Philanthropy was asked to lead a joint government-voluntary
sector group to determine whether the interpretation of the law
could be clarified and improved.
Charities play an important role in the development of social policy.
At FSA Toronto, we have in-depth knowledge of the issues that affect our clients, many of whom are disadvantaged and have no voice of their own. We speak out on issues such as child and family poverty through the work of Campaign 2000. Recently, the federal government invited Rhonda Freeman, manager of the Families in Transition program, to co-lead youth consultations on proposed changes to the Divorce Act.
Dorothy Bakos, now former manager of FSA Violence Against Women program, as a member of the Woman Abuse Council of Toronto, made recommendations to the jury at the Coroner's inquest into the death of Gillian Hadley. These advocacy activities are directly related to the needs of FSA Toronto clients.
CCRA has now proposed
new and clearer rules for advocacy that include several improvements. All charities will be allowed to average their advocacy spending
over three years, instead of having to meet the spending limits every
year. Large charities like FSA Toronto will still
have a 10 per cent spending ceiling, but small charities will be allowed
to spend up to 25 per cent of their resources on non-partisan advocacy. One of the most important
new rules exempts money spent on public awareness campaigns from
the advocacy spending limits, provided the messages are related to the
charity's mission, and do not include an explicit call to change or retain
a law or government policy.
"These changes are only a first step, but they're helpful.
Ultimately, we need to remove the advocacy restrictions from the
Income Tax Act. Policy development in a democracy requires public
debate," says Gordon.
A changing relationship
"This exercise in policy making has
been ground breaking at the federal level in Canada. This is the
first time that policy recommendations have been developed jointly
by the government and the people that will be affected by that policy,"
says
Gordon Floyd.
Changing the way charities are regulated will have benefits
for both the charities and the public. Charities, such as
FSA Toronto, will find it easier to comply with the regulations and be
more accountable. This means the public will have greater access to financial
information and will be able to make informed decisions when making a
donation. And charities will have more freedom to share their experience
and community knowledge to help create better public policy.
More information about the Voluntary
Sector Initiative is available at http://www.vsi-isbc.ca.
