Webinar – What you need to know about maintaining charitable registration

Please note: The content of this presentation is accurate as of the date it was aired on September 12, 2024.

Webinar Transcript

Slide 3 – What you need to know about maintaining charitable registration

Nicolas: Let me welcome you to the Canada Revenue Agency’s webinar on What you need to know about maintaining charitable registration.

Thank you for taking the time to join us today.

My name is Nicolas and I’ll be your host for today’s talk.

Slide 4 - Objective

Nicolas: The purpose of today’s presentation is to provide charities information and resources on what they need to know to maintain charitable registration.

[Person writing on a tablet with a stylus.]

Slide 5 - Overview

Nicolas: The presentation is split into 5 parts.

We’ll start Part 1 with a brief introduction. In Part 2, we’ll discuss charity registration in Canada. In Part 3, we will go into more details about requirements of registration. Then, we’ll talk about how to maintain charitable registration in Part 4. And finally, in Part 5, we’ll provide you with some resources to support your work, as well as links to find more information about the topics covered today. 

[Person typing on a laptop.]

Slide 6  - Introduction

Nicolas: This brings us to Part 1 of the presentation.

Slide 7 - Introduction

Nicolas: The Charities Directorate is the area of the Canada Revenue Agency that administers the sections of the Income Tax Act, or ITA, related to the regulation of charities.

You’ll see here a summary of what we do at the Charities Directorate:

Slide 8 – Charity registration in Canada

Nicolas: We’ll now discuss charity registration in Canada.

Slide 9 – Charity registration in Canada (1/2)

Nicolas: Let’s have a look at the eligibility requirements.

A registered charity must be established and operated for exclusively charitable purposes, and devote its resources (funds, personnel and property) to its charitable activities.

The ITA allows a registered charity to use its resources, inside or outside Canada, in one of three ways:

Slide 10 – Charity registration in Canada (2/2)

Nicolas: There are a number of benefits of registration.

Registered charities:

Slide 11 – Requirements of registration

Nicolas: This now brings us to Part 3 of the presentation where we’ll examine the requirements of registration.

Slide 12 – Requirements of registration (1/8)

Nicolas: To maintain charitable registration, charities must:

Slide 13 – Requirements of registration (2/8)

Nicolas: A registered charity must be created for charitable purposes and must devote its resources (funds, personnel, and property) to charitable activities. A registered charity is allowed to carry out its charitable purposes both inside and outside Canada in the following ways:

Regardless of how it operates, a registered charity must not engage in activities that directly or indirectly support or oppose a political party or candidate for public office or unrelated business activities.

Slide 14 – Requirements of registration (3/8)

Nicolas: A registered charity must keep adequate books and records for the prescribed time period at an address in Canada that is on file with the CRA.

So, what do we mean by adequate books and records?

The first point to note is that books and records must be kept in Canada.

They must be kept at the Canadian address that the charity has on file with the CRA. This cannot be a PO BOX. This includes all books and records related to activities carried on outside Canada. The books and records of the Canadian charity cannot be kept at a foreign address, so you should ensure that any overseas records are sent to and maintained in Canada.

In order to be considered adequate, books and records need to allow the CRA to verify:

We recommend that you keep all supporting documentation that relates to your revenue and expenses, and charitable activities. These supporting documents will help the CRA verify what we just mentioned.

It is also important to note that your books and records must be maintained in one of Canada’s official languages. They can be written in French, English, or in both languages. If they are not, you must have them translated into one of the official languages.

Slide 15 – Requirements of registration (4/8)

Nicolas: A registered charity may only issue official receipts for donations that legally qualify as gifts. An official receipt must contain all the information specified in Section 3501 of the Income Tax Regulation. 

This is an example of a donation receipt issued for a cash gift.

These receipts must include the following information:

Receipts for non-cash gifts must also include:

Sample official donation receipts are available on the Charities and Giving webpages on Canada.ca.

You should note that effective on Royal Assent, Budget 2024 proposed changes to simplify the issuance of official donation receipts and to align the process for issuing receipts with the modern practices of charities. The changes would be communicated on our website once they are implemented. The best way to stay up to date is to register for our electronic mailing list.

[Donation receipt]

Slide 16 – Requirements of registration (5/8)

Nicolas: The disbursement quota is the minimum amount that your registered charity is required to spend each year on either:

The disbursement quota calculation is based on the value of your property not used for charitable activities or administration.

As of January 1, 2023, we no longer review or grant accumulation requests. Charities must now include all assets not used in charitable programs or administration in their disbursement quota calculation which is done in schedule 8 of the T3010 information return.

Slide 17 – Requirements of registration (6/8)

Nicolas: A registered charity must file an annual T3010 information return (together with financial statements and required attachments) no later than six months after the end of the charity's fiscal period.

The best way to complete your T3010 information return is online using My Business Account (MyBA). You can complete your return online using the new digital services for charities available on MyBA. Any director registered with MyBA, or an authorized representative registered with Represent a Client, can complete your charity return entirely online.

You can also file your charity return on paper by completing it by hand or by using the PDF fillable/saveable version. If you must fill out your Form T3010 on paper, always go to our website to download the latest version of the form based on the end of your fiscal period end. When you mail your T3010 information return, the postmarked date indicated on the envelope is used as the received date.

Here are a few useful tips and tricks for filing your T3010 information return:

Slide 18 – Requirements of registration (7/8)

Nicolas: A registered charity that is constituted federally, provincially, or territorially must meet other specific requirements (in addition to the requirements of CRA) in order to maintain its status as a legal entity.

This may include annual filing and/or annual fees.

A registered charity should check with the relevant authorities to verify these additional requirements. Failure to maintain its status as a legal entity could result in the revocation of its registration as a charity.

Slide 19 – Requirements of registration (8/8)

Nicolas: It is important that the Charities Directorate has accurate information about all registered charities in Canada. A registered charity should get confirmation from the Directorate before changing its stated objects and/or activities to make sure they qualify as charitable.

A registered charity should inform the Directorate if it changes the following:

A registered charity must also obtain prior approval from the Directorate before changing its fiscal year-end.

A lot of this information can be updated online using MyBA.

If you’d like to speak with a client service representative dedicated to Charities, you can call 1-800-267-2384 and they will be able to assist you. You can find this phone number in the last slide of the presentation.

Slide 20 – Maintaining charitable registration

Nicolas: We’ll now talk about how to maintain charitable registration.

Slide 21 – Maintaining charitable registration (1/2)

Nicolas: Incomplete/ inaccurate T3010 - Unfortunately, charities often fail to file correct and/or complete T3010 information returns, or file in time. The most common issues include: missing or incorrect amounts reported; the date of birth and start or end dates of the term for all directors are not reported on Form T1235, Directors/Trustees and Like Officials Worksheet; and financial statements not filed with the T3010.

Books and records – Keeping adequate books and records is essential to the sound financial management of a charity, builds trust with the donor community, and is necessary to maintain registered status. Adequate books and records allow the Canada Revenue Agency (CRA) to verify donations made to a charity and to ensure proper use of charitable resources. Inadequate books and records can range from minor oversights on the part of a charity, to very serious infractions, including records that are deliberately altered, destroyed, hidden, or not collected in order to conceal non-compliance.

Donation receipts - Charities often issue receipts with inaccurate or missing required elements. For example, a charity may issue a receipt that fails to show the donor’s address, the name of Canada Revenue Agency and CRA website or a statement that it is an “official receipt for income tax purposes”. Failure to issue receipts properly could lead to consequences for the charity (such as penalties or even revocation) and for the charity’s donors (where receipts can be disallowed).

Non-charitable purposes/ activities - A registered charity must be established and operated for exclusively charitable purposes and devote its resources (funds, staff and property) to its charitable activities.

Charitable activities are those that directly further the charitable purposes for which the charity was registered.

Gifting to non-qualified donees - The Income Tax Act allows a registered charity to use its resources, inside or outside Canada, in one of three ways:

A charity that merely transfers funds to a non-qualified donee without meeting the definition of a qualifying disbursement, is in violation of the Income Tax Act and may be subject to penalties or revocation.

Slide 22 – Maintaining charitable registration (2/2)

Nicolas: Abusing/misusing tax-receipting privileges

Slide 23 – Support for charities

Nicolas: And finally, here are some resources to support charities.

Slide 24 – Support for charities

Nicolas: The Charities Directorate offers a number of different tools and services to support charities.

Client service representatives

Digital services

My MyBA is a secure online portal that allows charities to do the following tasks:

Tools and resources

Electronic mailing list

Subscribers receive updates when new information is added to the website, such as:

Thank you so much for attending today’s webinar. We hope we were able to answer your questions.

We will be sending you a link to an online survey about today’s webinar. Please take a few minutes to complete the survey.

Your feedback is really important to us. It helps us evaluate the effectiveness of our webinars and plan for our future outreach activities.

If you would like to receive recent news and updates from the CRA, we recommend you sign up for our electronic mailing list at canada.ca/charities-whats-new.

Thank you.

(link summary on slide :

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