Every charity must file an annual T3010 Registered Charity Information Return within six months of its fiscal year end. If you sit on a charity’s board of directors, you probably already knew that. But did you know if your T3010 is inaccurate, incomplete or late, your organization can be suspended from receipting, or lose charitable status altogether? Don’t panic! The Canada Revenue Agency (CRA) is keen to work with charities to ensure T3010 compliance, and Imagine Canada offers many helpful resources on this topic, such as How to Work With CRA on our Charity Tax Tools website.
The T3010 QuickPrep is another resource from Imagine Canada, and is one way to improve the accuracy of organizations’ returns. It is secure and sophisticated, offers helpful pop-up tips and identifies where you’ve omitted information or made a mistake.
Board members are responsible for ensuring that the organization they represent complies with appropriate legislation. As a director, it’s in your best interest to ask the CFO (or whomever completed the T3010 form) the following questions:
- What proportion of our spending is on (a) charitable activities, (b) management and administration, (c) fundraising, and (d) political activities?
- How do we determine our spending in these areas?
- Has someone checked recently to make sure we are allocating our spending correctly?
- What is our fundraising cost ratio, and is it likely to raise concerns with the CRA? This tool can help, or you can consult the CRA’s fundraising guidance.
- Are the numbers we are reporting on our T3010 consistent, where appropriate, with our financial statements? Can we explain any significant differences?
- Are we reporting our financial information in the correct place on the form (Section D or Schedule 6)? The list of criteria at the top of Section D will help you decide.
- Are we filing on time?
- Has someone checked to ensure that our answers are consistent between sections and the numbers add up correctly? Imagine Canada’s T3010 QuickPrep will do this for you.
If you are a director of a foundation, add these two questions to your list of things to consider:
- Are the business numbers of our qualified donees listed on the T1236?
- Are we disbursing adequate funds as per CRA requirements (3.5%)?
If you haven’t already, encourage the charity you represent to customize its profile page on CharityFocus. This donor-focussed site contains all the public information you give to the CRA, while allowing organizations to add their own material such as annual reports, financial statements and program information. By uploading material that adds context to your financial data, your charity demonstrates its commitment to transparency. Use Imagine Canada’s profile as an example of what your charity can do!