Between State and Market

Between State and Market: Essay on Charities Law and Policy in Canada

Copyright Date: 2001
Pages: 712
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  • Book Info
    Between State and Market
    Book Description:

    The first section of the book contains an overview of the charitable sector in Canada, a sociological review of altruism in different societies, a discussion of altruism in various philosophical and religious traditions, an economic analysis of "rational voluntarism," and an assessment of the relationship between the charitable sector and the welfare state. The second section contains five papers on the legal definition of charity, both general (the jurisprudence of the Federal Court of Appeal and a proposal for rethinking the concept of "public benefit"), and particular (the political purposes doctrine, religion as charity, and a commentary on the recent major Supreme Court decision on the meaning of charity). The third section deals with the tax status of charities: two papers evaluate the current tax credit system and one deals with the administration of charities by the Canada Customs and Revenue Agency. The final section contains essays on charities and commercial enterprise, on the regulation of fund-raising, and on needed reforms in non-profit corporation law. At a time when the federal government is about to embark on a wide range of policy initiatives to assist and regulate the non-profit sector, these essays are necessary reading for anyone concerned with the future of the charitable sector in Canada.

    eISBN: 978-0-7735-6869-3
    Subjects: Business

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Tables and Figures
    (pp. vii-viii)
  4. Acknowledgments
    (pp. ix-x)
    Bruce Chapman, Jim Phillips and David Stevens
  5. Contributors
    (pp. xi-2)
  6. 1 Introduction
    (pp. 3-12)

    In the last few years the role of the charitable sector in Canadian society has become an increasingly important subject.¹ Federal and provincial governments have begun to study the sector and to ask how they can best facilitate its workings,² newspapers devote much more attention to it than they ever have,³ and it has engaged the attention of the scholarly community in a way unthinkable just a decade or so ago. Long content just to get on with its tasks, the sector itself has also turned its mind to a highly publicized exercise in self-study and lobbying.⁴ The reasons for...

  7. 2 The Canadian Charitable Sector: An Overview
    (pp. 13-48)

    This chapter offers an overview of Canada’s charitable sector, looking at, first, the sectors and categories of charitable organizations, their size, and their financies; second, the donating behaviour of Canadians by region and other characteristics; and third, future directions for research and classificatory schemes.

    When we discuss charities in Canada, we must distinguish between registered and unregistered charities.¹ We can speak with some confidence about those that are registered because the Canada Customs and Revenue Agency (CCRA) maintains records on them.² About the unregistered we can say little with any certainty. Indeed, beyond the realm of registered charities, there is...

    • 3 Altruism in Comparative International Perspective
      (pp. 51-86)

      Human beings are dependent on each other throughout life. However, human societies differ greatly in the ways in which family relationships, formal organizations, and states are structured to meet human needs and to encourage humans to discharge their obligations towards each other. Social psychologists who study the various ways in which individuals contribute to each others’ well-being use the general term “prosocial behaviour” to refer to such actions. Within this very general realm, they use more specific terms, such as “altruism,” “cooperation,” and “helping.” In this chapter, we review what is known about cultural (largely cross-national) differences in prosocial behaviour....

    • 4 Altruism in Philosophical and Ethical Traditions: Two Views
      (pp. 87-126)

      In his novelTom Jones, written in 1749, Henry Fielding observes that

      the world are in general divided into two opinions concerning charity, which are the very reverse of each other. One party seems to hold that all acts of this kind are to be esteemed as voluntary gifts, and however little you give (if indeed no more than your good wishes), you acquire a great degree of merit in so doing. Others, on the contrary, appear to be as firmly persuaded, that beneficence is a positive duty, and that whenever the rich fall greatly short of their ability in...

    • 5 Rational Voluntarism and the Charitable Sector
      (pp. 127-165)

      Economics is characterized more aptly as a method of analysis than as a subject matter. The days are long gone when economists focused on that most paradigmatic of economic subjects – the market – perhaps straying only reluctantly to the workings of certain fiscal or regulatory institutions when these “imposed” themselves on what was otherwise deemed to be free market exchange. Now one can find economists applying their methods to voting rules and political institutions, to the machinations of bureaucracy, to the decisions of judges and the workings of the courts and legal rules, and, most recently, to the social impact of...

    • 6 The Role of the Voluntary Sector in a Modern Welfare State
      (pp. 166-216)

      This chapter presents a general review of the role of the voluntary sector in a modern welfare state. Its central argument is that voluntary organizations should complement government activity, not substitute for it. Calling on the voluntary sector to replace government services threatens the characteristics that provide its strengths and that constitute its unique attributes as a form of social organization, such as flexibility, responsiveness to local and minority interests, the capacity to innovate and initiate new ideas, and the ability to oversee and monitor the exercise of power by the state and other dominating institutions in society. Financing of...

    • 7 The Federal Court of Appeal and the Legal Meaning of Charity: Review and Critique
      (pp. 219-250)

      The Federal Court of Appeal is Canada’s “charities court.” Its jurisdiction, conferred in the early 1970s, is to hear appeals from refusals by the Canada Customs and Revenue Agency (CCRA) to register an organization as charitable or to remove its registration,¹ and the majority of litigation over the meaning of “charitable purposes” in Canada today arises in the context of taxation. The Court’s decisions shape the way in which the CCRA administers the registration process.² Two features of its work are immediately apparent: first, it has rendered remarkably few decisions on the legal meaning of “charity” – just seventeen – and second,...

    • 8 Rethinking Public Benefit: The Definition of Charity in the Era of the Charter
      (pp. 251-287)

      The definition of charity has long been the subject of considerable controversy. The questions are fundamental and involve such issues as why we privilege charitable trusts, what we hope to achieve thereby, and the relationship of those trusts to the prevailing social and legal order. The standard definition of charity was formed in the world of Elizabeth I, far removed socially, politically, and constitutionally from our own. And over the last few centuries the definition has largely been elaborated in England, which does not as yet have a written constitution with entrenched rights.

      But the meaning of charity varies with...

    • 9 The Doctrine of Political Purposes in the Law of Charities: A Conceptual Analysis
      (pp. 288-315)

      The doctrine of political purposes in the Canadian law of charities provides that political purposes cannot attain charitable status. The stated rationale for the doctrine is that courts have no means of judging whether a political purpose is for the public benefit, with the result that courts are unable to determine whether a gift to implement the purpose is a charitable gift.¹ This chapter presents a conceptual analysis of that rationale. Its orientation is conceptual in the sense that it approaches the doctrine of political purposes from the internal point of view of the doctrine’s own presuppositions.

      The doctrine rests...

    • 10 Religion, Charity, and the Charter of Rights
      (pp. 316-342)

      This chapter examines the relationship between the law of religious charity in Canada and the Charter of Rights.¹ Specifically, it asks whether three doctrines of charities law in the area of religion may violate sections of the Charter. Because the Charter applies only to governments and to legislatures, I pose these questions in the context of the registration of charities under the Income Tax Act.² The chapter has two sections. The first looks at two definitional matters – the definition of religion in Canadian charities law and that of “public benefit” in religious charity. This analysis is a prerequisite to the...

    • 11 Charity and the Income Tax Act: The Supreme Court Speaks
      (pp. 343-370)

      In February 1999 the Supreme Court of Canada handed down its judgment inVancouver Society of Immigrant and Visible Minority Women v. Minister of National Revenue.¹ This was the first occasion on which the Court had dealt with a case in charities law for more than thirty years,² and the first time that the Court has ever essayed a general discussion of the meaning of “charity” in Canadian law. It released the judgment after the chapters in this part were completed, but we could obviously not ignore it. It did not seem sensible to disperse commentary about it through the...

    • 12 Regulating Virtue: A Purposive Approach to the Administration of Charities
      (pp. 373-406)

      Charities in Canada are regulated principally by the federal government through the income tax system.¹ The federal government exempts from income taxes organizations that have obtained registration from Revenue Canada as a recognized charity. In addition, registered charitable organizations may issue receipts for donations, making tax benefits available to donors. Much attention, in this volume and others, focuses on the dramatic expansion of the charitable sector. Over 5 million tax-filers now claim in excess of $4 billion in donations each year to the 75,000 registered charities in Canada.² In 1990, the auditor general estimated that the value of subsidy in...

    • 13 Charitable Contributions and the Personal Income Tax: Evaluating the Canadian Credit
      (pp. 407-456)

      The last fifteen years has witnessed significant changes in the way in which charitable contributions by individuals are treated under the Canadian Income Tax Act.¹ In 1984, an optional standard deduction of $100, which taxpayers could claim irrespective of the amount that they actually contributed to charities, was repealed.² In the same year, rules governing the taxation year in which charitable contributions could be deducted were relaxed, permitting taxpayers to claim amounts up to five years after the year of the gift.³ More recently, amendments have increased the maximum limit on charitable gifts eligible for tax assistance from 20 per...

    • 14 The Tax Credit for Charitable Contributions: Giving Credit where None Is Due
      (pp. 457-482)

      Elsewhere in this volume (chapter 6) I argue that in a modern welfare state the voluntary sector should complement government activities and not attempt to replace them.¹ Its complementary role includes responding to local and minority interests, innovating and initiating new ideas, overseeing and monitoring the exercise of power by the state and other dominating institutions in society, and acting as venture capital for social change. I argue that these vital roles are placed at risk when the government “downloads” services to voluntary organizations or contracts with them for provision of public goods and services. In this chapter I argue...

    • 15 The Regulation of Social Enterprise
      (pp. 485-510)

      At one time it was convenient to divide society into three sectors: public, private, and “non-profit.” In recent years, however, the distinctions between the sectors have become blurred, mainly because phenomena previously regarded as unique to the private sector have begun to emerge in the other two sectors. The public sector has introduced practices such as competition and reliance on financial incentives, and the non-profit sector, which includes the charitable sector, has experienced increased “commercialization,” often in response to cuts in government grants to charities.

      The term “commercialization” has a number of meanings, but in the charitable sector frequently refers...

    • 16 Flirting with the Devil while Doing God’s Work: The Regulation of Charitable Fund-raising
      (pp. 511-546)

      We view our topic, the regulation of charitable fund-raising, as a mirror held up to the academic who works in a university. Over the last twenty years, fund-raising has become increasingly crucial to the continued existence of our universities. Its range and character have become staggeringly complex. The unadorned, unconditional gift now finds itself in the company of joint ventures, patent protection, consultancies, research grants, sponsorships, training contracts and partial privatizations. Today’s university – a charitable non-profit institution – finds itself between state and market and is proliferating hybrid institutional forms apace. Whereas its setting may represent among the most elaborate examples...

    • 17 Framing an Appropriate Corporate Law
      (pp. 547-594)

      Probably the predominant form of organization for charities in Canada is the non-profit corporation. It is not known how many organizations are constituted as unincorporated associations, so this form may be as common as or more common than the corporation. In the commercial sector its equivalents are the sole proprietorship and the partnership. The unincorporated association, like its two equivalents, is relatively easy to form and has few formalities concerning its governance. Its legal nature and its proper mode of governance however, are unclear. Its basic governing law is agency law. One might think that its articulation would replicate, with...