We recently blogged about our Financial Information Kit and have more news to share! We’ve added a new ‘additional resources’ section to the kit.
The first of these new resources is an article from LawNow Magazine called “We’re Calling to Set up a Time to do an Audit”.
Most people have the same reaction to audits as they do to getting a tooth pulled or getting their legs waxed: they cringe as a feeling of extreme anxiety sweeps over them.
But, at least in the case of Canada Revenue Agency (CRA) audits, it’s often an unnecessary reaction. Most audits completed by a representative of CRA confirm that a charity is in compliance with the Income Tax Act and if not, it’s usually a case of correcting minor records transgressions. This article reviews what is covered in a CRA audit, why they occur, and what is required from a charity when an audit is done. It also covers how an audit may be concluded.
We hope that with this information your organization will not live in fear of audits but embrace them; think of them as an opportunity to show how transparent your charity is.
(Ok, maybe embrace is a strong word, but you will know what to expect and will survive!)
If you’re like me, you’ve owned, borrowed, or discreetly flipped through some version of the “for Dummies” book series. I own Wine Tasting for Dummies, borrowed Excel for Dummies from the library and listened to Spanish for Dummies on CD. I am willing to acknowledge that, occasionally, I don’t know everything. I need basic information presented in an easy format that actually helps me learn! I want something that answers my questions and I like to be able to flip back as needed to remind myself what I’ve learned.
If you are looking for information on keeping financial records for registered charities in Canada, you likely want the same things – easy-to-read basic information, quick reference sheets, and answers to your questions!
Charity Central has created a Financial Information Kit to fill this need.
The kit contains a series of frequently asked questions on financial reporting and registered charities. This includes answers to questions like:
- Once we’re a registered charity, do we need a professional accountant?
- What should we look for in choosing a professional accountant, whether volunteer or paid?
- How should the accounting records be set up so we can easily complete the Registered Charity Information Return (T3010)?
- Is it a good practice to have our financial statements audited by a professional accountant?
- What are the different types of services that a professional accountant can provide?
The kit also contains six tipsheets:
- Choosing a Professional Accountant
- Setting Up a Chart of Accounts for a Small Organization
- Setting Up Financial Books and Records
- Financial and Other Information Needed to Complete the Registered Charity Information Return (T3010)
- Getting Ready for an External Audit – What Can You Prepare?
- Other Tips on Working with your Auditor – Common Issues During an Audit
This kit is available for free download at www.charitycentral.ca/docs/financialkit-en.pdf.
Gift certificates and gift cards are becoming a very common item in our culture. They are also becoming increasingly common in charitable activities. If your charity has ever received a gift certificate or gift card as a donation, listen up!
Charity Central (always on top of what’s happening in charity law) has several FAQs designed to help you understand when a registered charity can and cannot issue a donation receipt for gift certificates or gift cards:
Our charity received a donation of a $100 gift certificate from an aesthetician for a facial. How much should the receipt be for?
Zero. Your charity cannot issue an official donation receipt because there is no transfer of property. The gift certificate is for services and services are not property.
Our charity received a donation of a $100 gift certificate from someone who purchased the gift certificate from an aesthetician. Can we issue an official donation receipt and for how much?
Yes, an official donation tax receipt can be issued for $100, the fair market value of the gift certificate.
A gift certificate that was bought from the person who created the gift certificate is considered property. When the purchaser donated the certificate to your charity, there is a transfer of property. An official donation receipt can be issued.
If you have more questions about receipting, Charity Central has a wealth of information for you. Check out the information map, learning modules, more FAQs, and resources.
The Canada Revenue Agency has recently posted its updated policy on the donation of gift certificates or gift cards. Click here to read the policy from CRA.
The Government of Canada has established the East Africa Drought Relief Fund. The Government will match every dollar donated by individual Canadians to registered Canadian charities who are raising money for this Fund.
If you would like to have your donation matched through the Fund, donations must be made through registered Canadian charities. To verify your chosen organization is a registered charity, view the Charities Listings or call the Canada Revenue Agency at 1-800-267-2384.
For more information about how to donate wisely, check out Giving to charity: Information for donors from the Canada Revenue Agency.
If you are a registered charity thinking of raising money for the East Africa Drought Relief Fund, there are specific donating and fundraising criteria that must be met. Make sure to check out what an eligible donation includes. Registered charities must complete and send in the East Africa Drought Relief Fund Declaration Form to CIDA (Canadian International Development Agency) on or before September 30.