Charity Bylaws and Minute Book

We all know that corporations, sole proprietors, and other businesses have to keep up to date and accurate records, submit tax returns and follow various other financial guidelines. But many people believe that because registered charities are tax exempt, they don’t have to do those things.

That’s absolutely not true. In fact, if you don’t keep accurate and up to date financial records for your charity, you run the risk of losing your charitable status. So, if you’re just registering a new charity and you’re not sure what’s required, read on for the abridged version.

‍

Minutes of Meetings

In order to register a charity, you have to have a board of directors, trustees or executives. One of the first things they will do is have a meeting to make appointments, choose a bank and so on. Every time your board has a meeting, minutes need to be kept, and you are required to keep those as long as the charity exists, and for two years after the charitable status or corporate registration of the charity is revoked.

Minutes of member meetings must be recorded and retained for two years after the date that the charitable status is revoked.

‍

Donation Receipts

Charitable organizations are allowed to collect donations and issue receipts for them, but those receipts have to be kept for your records for at least two years after the calendar year they were received in, except when they are for 10-year gifts.

Receipts for 10-year gifts have to be retained for two years after charitable status is revoked.

‍

Governing Documents

Charitable organizations generate a number of governing documents that outline the goals of the organization, how those goals will be pursued, and everything else, down to the day-to-day operation of the organization.

These documents may also include the organizations bylaws.

All of these documents must be retained as long as the organization exists, and for two years after the charitable status is revoked.

‍

Financial Statements, General Ledgers, Returns and Source Documents

Your charity will need to prepare financial statements and returns every year, and you are required to keep all of them, including copies of all the returns sent to the CRA, for six years after the end of the year they apply to.

The only exception to this is if the charitable status of the organization is revoked, in which case, they must be kept for two years after the date of revocation. Your accountant should be able to advise you exactly which documents should be kept, but when it comes to financial and tax records, it’s always best to err on the side of caution. If you’re not completely sure you don’t need it, keep it!

‍

Record Storage

The Canadian Government not only stipulates what documentation registered charities need to keep and for how long, they also advise charities about how to store them.

Charities are advised to keep one copy of their records on their premises, or where they can be easily accessed in the event of an audit. But they should also keep a second copy of their records off site in case there is an event or disaster like a fire or flood that might damage or destroy the records.

‍

Financial Management for Charities

As you can see, not only is there a lot more that goes into financial record keeping for registered charities, but there are also a lot of rules about how documents and records need to be stored.

If your charity has an accountant or CFO, they should be able to tell you exactly what needs to be done, and how.

If you haven’t appointed one yet, or you are just starting to look into the process of registering and running a charity, the CRA and other government organizations can be very helpful. There are also many online resources that may help. When it comes to the internet though, always try to look for resources that are on official government websites, as there is a lot of misinformation out there.

Careful accounting and meticulous record keeping are very important to keeping your charity in good standing and maintaining your charitable registration. So, make this a priority before you get started, and while you are operating. It’s a lot easier to stay on top of the bookkeeping than it is to remedy problems later.