There are three types of books and records a charity needs to keep: governance documents, financial information, and source documents. All charities must keep and safeguard their books and records in either English or French.
These books and records must be available to the Canada Revenue Agency (CRA). Failing to maintain adequate books and records can result in fines, penalties or revocation of your charitable status. See the CRA document Keeping Records for more detailed information.
Where books & records must be kept
The Canada Revenue Agency (CRA) requires that original books and records be kept at the Canadian address that the charity has on file with CRA. If the charity has more than one address in Canada, originals of all the charity’s books and records must be kept at the address that is on file with CRA. Maintaining books and records outside Canada but making them accessible electronically in Canada does not meet the CRA requirements.
The charity should also keep backup copies of its books and records in a separate location, preferably off-site. This is important in case the originals are damaged or destroyed (for example, by fire or water damage).
If a charity carries on any activity outside Canada, it may keep copies of books and records related to these activities at a foreign address, but the original books and records must be kept in Canada.
How long to keep books & records
|
Type of record |
How long they must be kept |
|
Copies of tax receipts |
Two years after the end of the year in which the donation was made |
|
Financial records |
Six years after the end of the most recent year to which they relate (or two years after registration is revoked |
|
Incorporating documents |
For as long as the charity is registered plus two years after the charity is dissolved or wound up or registration is revoked |
|
Minutes of meetings of board of directors and of members |
For as long as the charity is registered plus two years after the charity is dissolved or wound up or registration is revoked |
The Canada Revenue Agency (CRA) can require that specific records be kept for a longer time, on demand. In this case, CRA will tell you how much longer you have to keep the records.
All records that are needed to deal with an outstanding CRA assessment or investigation, as well as any appeal of a CRA decision or notice of objection, must be kept until the matter has been dealt with and the time for filing any further appeal has passed.
Computerized books & records
Books and records that are maintained on a computer must be kept in an "electronically readable" format, even if the charity has paper printouts of the electronic records. “Electronically readable” means a copy that would allow Canada Revenue Agency (CRA) representatives to access the electronic records on CRA's equipment. This generally means that you must keep both the computer data files and the computer program or software application used with the files, in a format that can be installed and run on a standard computer system.
Scanned images of paper source documents or books of account are acceptable. If the scanned images give the same information as the original documents and all significant details are readable, the original paper copies of source documents or books of account may be destroyed.
Charities must ensure that books and records maintained electronically can be related back to the supporting source documents for audit purposes. That is, electronic records must have sufficient details from the source documents (for example, invoice numbers, dates, etc.) to identify the specific source document that an electronic transaction is based on.
Third parties and books & records
If a charity hires a service provider (for example, a bookkeeper, an accounting firm, or an Internet application service provider) to maintain its records, the charity is still responsible for meeting all Canada Revenue Agency (CRA) requirements.
Originals and all copies of payroll and donor records, and any other records containing personal information, should be safeguarded. Access to these records should be allowed only on a need-to-know basis, in accordance with applicable privacy legislation.
Filing the T3010 Return
Every registered charity in Canada must file a Registered Charity Information Return (Form T3010) with the Canada Revenue Agency (CRA) every year. The Registered Charity Information Return asks for several different kinds of information about your charity as well as a copy of its financial statements. If your charity does not file a Registered Charity Information Return on time every year, CRA can impose serious penalties.
For help filing the T3010, see the CRA’s guide, Completing the Registered Charity Information Return. The completed return should be reviewed for completeness, and must be signed by a director, trustee, or other official of your charity. If you use the forms on the CRA Web site, be sure to print extra copies for your records before mailing your return to CRA.
Other information you must include
When filing your T3010 return, you must include the Registered Charity Basic Information Sheet and a copy of your charity's financial statements.
The Registered Charity Basic Information Sheet
The Registered Charity Basic Information Sheet is pre-printed by the Canada Revenue Agency (CRA) and asks for any changes to the following information about your charity, which you should make directly on the form:
- mailing address,
- telephone or fax number,
- e-mail or Web site address,
- the name or position of your charity’s contact person,
- the name your charity is known by other than its registered name, and
- your charity’s program areas.
The procedure to change other information on the pre-printed Basic Information Sheet is more complicated. If you need to change your charity’s legal name, its designation (that is, whether it is a charitable organization, a public foundation, or a private foundation), or its fiscal year end, you must send a letter and supporting documentation to CRA. See Keeping CRA Informed of Changes for more information on how to tell CRA about these changes.
Most information that you submit to the CRA is made available to the public on CRA's Web site along with the T3010 information, so make sure that it is accurate.
Financial statements
You must include your charity’s financial statements as part of your annual T3010 return even if your charity was not active during the fiscal period. At a minimum, financial statements should consist of:
- a statement of assets and liabilities (or "balance sheet"), and
- a statement of revenues and expenditures (or "income statement").
These financial statements should show your charity’s assets, liabilities, revenues and expenditures for the fiscal year being reported.
CRA does not require that your financial statements be audited, but if they are, the audited statements must be provided to CRA. If your charity has revenue over $250,000, the Charities Directorate recommends that you have your financial statements professionally audited; otherwise, your charity’s treasurer should sign them.
Changes to the T3010
From time to time the CRA revises form T3010 to reflect changing CRA information requirements on the annual return. You should be sure to use the correct version of the form, based on the year for which you are preparing the return.
Implications of not filing the T3010
Not filing an annual T3010 is serious. If you do not file your T3010 on a timely basis, the following things will happen:
- If the Canada Revenue Agency (CRA) does not receive your T3010 within five months of your charity’s fiscal year end, it will send you a reminder.
- If CRA does not receive your T3010 within seven months of your charity’s fiscal year end, it will send you a Notice of Intention to Revoke a Charity's Registration.
- In the month after CRA sends out this notice, it will try to contact representatives of your charity by telephone to remind them to file the annual return.
- Two months after this, CRA will send your charity a Notice of Revocation of Charity's Registration. This sets out the date the revocation becomes affective and includes Form T2046, Tax Return Where Registration of a Charity is Revoked.
Revocation of a charity’s registration means that the charity:
- is no longer exempt from tax;
- cannot issue official donation receipts; and
- may have to pay a tax equivalent to the full value of its net assets (this is called a revocation tax).
A charity that loses its registration may apply for re-registration. The first time it does so, it will have to pay a $500 penalty for failing to file its T3010.