Registered Charities - How to Avoid Losing Charitable Status
As the CEO of a registered charity, you face quite a number of challenges. Not only do you have an ambitious mandate to deliver on, but you have staff and volunteers to supervise, administration to take care of and so much more.
The last thing you want to worry about is the potential of loosing your charitable status. That could certainly compromise all the good work your organization is engaged in. Here’s what I can tell you about avoiding this catastrophe.
Know the legislation
First off, be thoroughly aware of your obligations as a charity to the government of Alberta. Keep in mind that these are in addition to the federal regulations to be complied with. Knowing the rules inside and out will help you avoid any pitfalls.
Stick with your charity’s purpose
According to the paperwork you filed originally with the government, your charity has a specific mandate or purpose. Ensure that this is kept in mind when you develop a strategic plan and create your vision and mission statements. This will help guide your organization and you’ll be less likely to get into trouble for taking on work that’s outside your mandate.
Remember to file your T3010
The form T3010 is the annual information return that you must file with the Canadian government. Failing to file this document is one way to jeopardize your charitable status.
Provide donation receipts correctly
Donation receipts for tax purposes are to issued in exchange for a monetary donation, and not in exchange for services provided. However, a donation receipt can also be given to someone who donates property. In this case, it should represent the cash value of the gifted items.
Safeguard the use of your charitable number
As you can understand, it’s never acceptable to let a non-charity use your charitable number. You may encounter individuals who will ask for the loan of your number in order to apply for a grant for work they want to undertake. Even if you think their cause is a good one, don’t do it! This is a fast way to lose your charitable status.
Give grants appropriately
Here, we’re talking about granting funds only to qualified recipients for work that your charity will be able to oversee. Handing out grants to non-profits, for instance, isn’t acceptable.
If you’d like more information in this area or would benefit from discussing the particulars of your charity, please reach out to me at Adeolu Ajayi Professional Corporation.
The information on this site is not intended to be a substitute for professional advice. The information does not take into consideration your personal situation, and as such, should not be used without consultation with an accounting professional who could help you use the information to your greatest advantage. Adeolu Ajayi and Adeolu Ajayi Professional Corporation will not be held liable for any issues arising from the use of the information provided on this site.
ABOUT THE AUTHOR
Adeolu Ajayi is a Chartered Professional Accountant and the founder of Adeolu Ajayi Professional Corporation. Adeolu provides valuable tax planning, accounting, and income tax preparation services in Calgary, AB, and environs. Call us today for a consultation!
Adeolu Ajayi, CPA, CGA, FCCA | 09/02/2021