Why and When Discrimination is Discordant with Charitable Status: The Problem with 'Public Policy', The Possibility of a Better Solution

• Author: Adam Parachin
• Position: Associate Professor, Osgoode Hall Law School, York University
• Pages: 305-359

Why and When Discrimination is

Discordant with Charitable Status:

e Problem with “Public Policy”,

e Possibility of a Better Solution

Adam Parachin*

When courts have considered when and why discrimination renders an institution

ineligible for charitable status, they have resorted to the doctrine of public policy to

explain the non-charitableness of discrimination. Public policy is not, though, up to

the task. It is undisciplined, inspires courts to consider irrelevant factors and of‌fers

no principled explanation as to when and why discrimination should and should not

vitiate charitable status. A better approach would be to address this issue using the

traditional analytical tools of charity law — charitable purposes, charitable activities

and public benef‌it. But this is a deceptively dif‌f‌icult task, which perhaps accounts for

the appeal of public policy to courts. Nonetheless, this paper looks inward to the law of

charity, developing an “in-house” rule against discrimination grounded in the internal

logic and values of charity law. Specif‌ically, this paper discovers in the public benef‌it

requirement an inclusive ethic through which charity law af‌f‌irms the equal worth, value

and dignity of others. Discrimination is non-charitable when it fails this standard

through stigmatizing rejection. But not all dif‌ferential treatment under charitable

trusts contradicts the inclusive ethic of charity law.

* Associate Professor, Osgoode Hall Law School (Toronto, Ontario

Canada).

306

Parachin, Why and When Discrimination is Discordant

I. I

II. L A

A. United States

B. Canada

1. Canada Trust Co v Ontario Human Rights Commission

2. Re Ramsden Estate and University of Victoria v British

Columbia (AG)

3. Re Esther G Castanera Scholarship Fund

4. Royal Trust Corp of Canada v University of Western Ontario

C. Summation

III. T S F B S

A. Discrimination and Non-Charitable Purposes

B. Discrimination and Non-Charitable Activities

C. Discrimination and Public Benef‌it

1. Public Benef‌it and Activities

2. Two Components of Public Benef‌it

IV. M B A F U O P B

A. General

B. Inclusive Ethic Within Public Component of Public Benef‌it

C. Guiding Considerations

1. Courts Should Be Hesitant to Intervene

2. Expression Can Matter (Exclusionary Versus Inclusionary

Criteria)

3. Ameliorative Charitable Trusts

4. Avoid a ‘Race to the Bottom’

5. Pemsel Categories of Charitable Purposes Are Not Silos

D. Application to Specif‌ic Targeting Criteria

1. Sexual Orientation

2. Marital Status

3. Caucasian

4. Not a Feminist

E. Summation

V. C

307

(2020) 6 CJCCL

I. Introduction

When charity lacks its characteristic warm glow, courts sometimes

turn to public policy to conclude that the prerequisites for

charitable status are unmet. is happened in, for example, Bob Jones

v United States,1 where private schools engaging in racial discrimination

were found to be non-charitable, Canada Trust Co v Ontario Human

Rights Commission,2 where a discriminatory scholarship fund was

found to be non-charitable, and Royal Trust Corp v University of Western

Ontario,3 where another discriminatory scholarship fund was found to be

non-charitable. e problem with these decisions is not the conclusions

reached but rather the basis — public policy — for decision-making.

As has been widely observed, public policy is a poor basis for judicial

decision-making.4 So how do we account for the appeal of public policy

to courts in these kinds of cases? When courts invoke public policy in

these fact patterns, it is (I think) because they instinctively perceive a

discordance with charitable status at law but struggle to articulate that

intuition using the usual frames of reference employed in charity law.

e above authorities had very little to say about the traditional charity

law touchstones of charitable purposes, charitable activities and public

benef‌it. It is almost as though public policy was relied upon in these

decisions as shorthand for ‘noncharitable for inarticulable reasons’.

1. 461 US 574 (1983) [Bob Jones].

2. (1990) 69 DLR (4th) 321 (ONCA) [Canada Trust Co].

3. 2016 ONSC 1143 [Royal Trust Corp].

4. Church Property Trustees, Diocese of Newcastle v Ebbeck, [1960] HCA

88. Windeyer J noted that public policy has been variously described

(citations omitted here) as: “a very unruly horse”, “a treacherous ground

for legal decision”, “a very unstable and dangerous foundation on which

to build”, a “slippery ground”, “a vague and unsatisfactory term” and

“calculated to lead to uncertainty and error when applied to the decision

of legal rights” at 416. See also Fender v St John-Mildmay (1937), [1938]

AC 1 (HL (Eng)) [Fender]. Per Lord Atkin, the doctrine of public policy

was described as a doctrine of last resort that “should only be invoked in

clear cases in which the harm to the public is substantially incontestable

and does not depend upon the idiosyncratic inferences of a few judicial

minds” at 12.