Charity Records

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Minutes are important for your charity because…

  • The CRA must verify all donation receipts, income and expenditures of the charity;
  • Minutes keep track of the progress of the charity. They are a permanent, legal record that proves that the activities of the charity are charitable and that it is doing what it claims to do;
  • Minutes inform absent members and orient new members of decisions and details regarding the current status of the charity;
  • Minutes show the reasoning behind decisions made and record discussions regarding plans and policies developed;
  • They are a useful guide for evaluating the charity’s work.

Aside from Minutes, other forms of records that are a good idea to keep are:

  • Duplicates of donation receipts
  • Any other information that would verify any donations which are eligible for a deduction or tax credit.

Which minutes should be kept?

The bylaws of a charity will usually state that minutes should be kept for the following meetings:

  • Director’s meetings
  • Annual general meetings
  • Members’ meetings
  • Board committees
  • Staff meetings

It is a good idea to check the section in your bylaws that lays out of the guidelines for meetings. As an organization, you should be regularly referring back to your original plan of vision, so that all your activities will reflect it.

Is your Not-for-Profit and/or Charity properly organized? Are the minute book entries up to date and in order? Let us review your books and bring them in line with what is required by legislation.

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How do we avoid being a Soliciting Corporation?

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Background: The B.I.G. Charity Law Group was recently approached by a successful charity, which is Federally incorporated under the CNCA, which raises and distributes millions of dollars annually. They were advised by their accountant that they are a Soliciting Corporation and therefore require an audit which will be filed with Industry Canada. 

Q. "How could we  circumvent the onerous Audit requirements under the CNCA. The accountant would invoice us $15,000.00 annually, and that is $15,000.00 that would have gone to feed the poverty-stricken and needy. What options do we have to avoid being subject to the Audit requirements under the CNCA?"

A. They have several options: 

  1. Reorganize the Corporation as a Charitable Trust or Association. The downside to organizing as a Trust or Association is the the Directors or Trustees would be exposed to personal liability for the actions and debts of the Organization. 
  2. If the Organization wants to retain its Corporate status, it can continue ("Export") under the legislation of another province. Provinces which allow importing from Federal jurisdiction are Ontario, Saskatchewan, Manitoba, and Alberta. But note, if continued under provincial legislation, the Corporation will be required to have a registered office in the province.
  3. A third option is to go to the root of what makes the Organization a "Soliciting Corporation" and modify and revise the by-laws or Articles accordingly. What do we mean?

For example, if the Organization became a Soliciting Corporation because it received donations of over $10,000.00 from the general public, the Organization can amend the Articles or by-laws to state that anyone who donated in the past year is deemed to be a member of the Corporation (a proficient lawyer will know how to draft the articles in a way that will provide for multiple classes of members, with variant voting powers). That way, donations will have been received from the Corporation's members, and will not satisfy the "Soliciting Corporation" test. 

There are other possible methods as well, but more about that in a future blog post.  

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