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Will charitable status alter Pride Toronto’s politics?

Questions remain about benefits and drawbacks of a succesful application

Two months following Pride Toronto’s decision to apply for charitable status, questions remain about the benefits and drawbacks of a successful application. Pride Toronto, currently a not-for-profit, is responsible for the city’s annual Pride celebrations and for the World Pride 2014, which will take place in Toronto.

Charities are exempt from income and property taxes — and crucially, their donors are exempt from paying income tax on donations.

“Most nonprofits believe being charitable enhances their ability to raise money from the public,” explains Doug Kerr, a member of the executive committee for the Lesbian Gay Bisexual and Trans Giving Network. “Some sources of funding like foundations can only make grants to charities — organizations like community foundations and the United Way.”

With the bill for World Pride expected to come in at around $10 million — more than double the cost of Toronto’s regular Pride events — Pride Toronto is likely experiencing increased financial pressure. Charitable status would make them more appealing to donors.

There are also benefits for Pride’s stakeholders. Registered charities must make their financial records available online within six months of the end of each fiscal period. At September’s AGM, Pride Toronto failed to make a full set of financial statements available to its members — if it were a charity, that would have jeopardized its status.

Toronto Pride executive director Tracey Sandilands initially declined to comment by phone or in person, but agreed to answer questions via email. Later, she demurred entirely, claiming that chief fundraiser Ryan Lester is the only staff member qualified to speak on the subject — and that he was out of town. Attempts to reach Lester were unanswered by press time.

Charitable status also comes with some less welcome conditions attached. Federal law sets a ceiling of 10 percent of a charity’s resources that may be spent for political purposes.

“Lots of charities do a bit of advocacy for their issue,” says Kerr. “Egale for many years did not apply for charitable status because they were trying to change the laws on same-sex marriage and most of their work was political.”

Kerr points out that Egale eventually created a separate organization — the Egale Canada Human Rights Trust — to do their charitable work, so they are able to enjoy some of the charitable tax benefits without having to give up their political advocacy. Pride could have taken that tack, which would have left open the door for more political Pride events.

But Kerr adds that since Pride Toronto is not a lobbying outfit, charitable status would probably not seriously limit its activities.

“The political thing is not a big issue in the sense that Pride is not a political organization that’s trying to change the law,” he says.

The global Pride movement has always had an activist dimension, although in recent years Toronto Pride organizers have focused more on parties than politics.

According to Revenue Canada, “political activities” that would be limited by the 10 percent rule include hosting a political rally and buying advertising with the purpose of putting pressure on the government. As a charity, Pride would be prohibited entirely from campaigning for or against a political candidate or party.

Activities Pride has been involved with recently, like last year’s Human Rights Conference during Pride Week, likely don’t fall under the “political activities” category for CRA purposes, and would therefore be free from financial restriction.