Charity regulators all have processes for members of the public to make complaints about the charities. These processes reveal as much about the regulator and the underlying laws as they do about charity malfeasance. Charities are generally good actors, but they do sometimes have lapses or get caught in internal, community, or national politics. In a few cases, you have “wolf in sheep’s clothing” charities, which whistle blowing mechanisms are designed to catch. Here’s a sampling of complaint processes in Canada and the UK.
Canada Revenue Agency
Canada’s primary charity regulator is the Charities Directorate of the Canada Revenue Agency (CRA). CRA has a process to report “suspected non-compliance by registered charities”. The short section on the website is bureaucratic. The language may be a bit confusing to the average citizen. CRA’s authority over charities arises from the Income Tax Act, which is the basis for charity registration. The focus is on tax abuse and charitable activities.
The CRA solicits information about the following topics from the public:
- conducting improper fundraising
- undertaking non-charitable activities
- providing false receipts
- providing private benefits to directors of the charity or third parties
- misappropriating funds
- lacking direction and control on activities carried out outside Canada
- operating an unrelated business
Complaints may be made anonymously, and the identity of all whistleblowers, even if disclosed, is confidential. At the CRA the complaints go into a black box. There is no reporting about the process unless a charity is revoked, annulled, suspended, or penalized. CRA outlines the complaint process but essentially buries it on its website. This low-key approach may reflect the Charities Directorates generally supportive approach to charities in its regulatory activities. (Muslim charities and some charity lawyers will disagree with this characterization.)
Charity Commission of England and Wales
By contrast, the primary charity regulator for the UK, the Charity Commission in England and Wales spotlights its comprehensive complaint process. In Google search results on my phone, I was shocked to see a tab entitled “Complain about a charity” listed first over all other topics. (The search results are ranked differently on a desktop computer, which may be a clue about the intersection on social media and complaints.) The Commission regulates charities through the lens of trust law.
The complaint section of the website encourages members of the public to file complaints to the Commission on several grounds. They focus on protection of charitable property, purposes, and people. The goal is to “make sure that charities are accountable, well-run and meet their legal obligations”. Complaints can be made if:
- a charity not doing what it claims to do
- losing lots of money
- harming people
- being used for personal profit or gain
- involved in illegal activity
Note the plain language. And, there is a rigorous, clear complaint process, not just an email box. There are also sections for Trustees, Auditors and charity employees. The Commission also provides links to other regulators that focus on fundraising and advertising – both forms of consumer protection.
Charity complaints have become a political issue in the UK. There is extensive collateral on the topic and MP briefing notes. The Commission publishes annual reports on the number of complaints received and investigated annually, which are typically under 25 each year. My UK charity colleagues tell me that the Commission was especially activist pre-pandemic and focused on international charities and incidents of sexual and behavioral abuse. While the abuse concerns are serious, my colleagues wondered out loud at what point regulatory accountability turns into political retribution.
Ontario Public Guardian and Trustee
Ontario, through the Public Guardian and Trustee (PGT), has the most robust Canadian charity complaint process. Like the UK, they regulate trust law. Ontario also has its unique Charities Accounting Act. The focus is on protecting charitable property, purposes, payment of directors, and businesses controlled by the charity. There is a formal complaint process, but, to the best of my knowledge, no public reporting on complaint outcomes. Ontario is also the only province with separate charity legislation that enables complaints.
Frankly, the Ontario PGT charities group is small – very knowledgeable but understaffed. They lack the investigative resources to follow though on most complaints. The website outlines a robust process that may not be backed up with enforcement capacity.
There are other regulators that oversee the activities of charities in Canada, particularly related to provincial consumer protection and fundraising legislation. Alberta, for example, has its Charitable Fundraising Act, that applies to all charities operating in Alberta. Imagine Canada has a helpful round up of other Canadian legislation that affects charities.
I am certainly not suggesting that charities are rife with problems and abuses that need investigation. I do, however, believe that social media and increased political polarization will drive interest in complaint processes in the future. All good regulatory systems have checks and balances. Mechanisms for public reporting are important, even if the complaints are not always grounded or balanced.