CRA Compliance

Changes Requiring Notification to CRA

Not all changes necessitate the approval of the CRA; nevertheless, some changes necessitate notifying them. It is highly recommended that you seek the input of a legal expert to review your alterations before presenting them to the CRA in several circumstances.

• Updating contact information: If your charity's office location or contact information, such as telephone, fax, or email, changes, it's important to promptly notify the CRA through postal mail or fax. Verifying that the change has been implemented can be done by reviewing your details in the Charities Listings of the CRA,
• Changing charity's legal name: If your charity's legal name changes or if you plan to operate under a different business name, it's crucial to inform the CRA. It's important to refrain from issuing receipts in the new name until it has been approved by the CRA.
• Modifying or adding charitable activities: If your charity plans to undertake new types of activities that were not mentioned in your original application for charitable status, it's essential to inform the CRA. They will advise you on whether these proposed activities are considered charitable and if any modifications to your charitable purposes are required.
• Changing charity's purposes: If you are planning to change your charity's legal objects or purposes, it's advisable to consult with the CRA beforehand to ensure compliance with regulations and guidelines.
• Ceasing charity's operation: If you no longer intend to operate your charity, you should request a "voluntary revocation" by asking the CRA to cancel your registration. To ensure compliance, it is crucial to adhere to the required procedures and notify the CRA of your decision

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Changes requiring CRA approval

• Changing fiscal year-end: Prior CRA approval is required to modify your charity's fiscal year-end. Your charity cannot have a reporting period exceeding 12 months. When changing the year-end, a short reporting period will bridge the time between the old and new year-end.
• Accumulating funds for a specific purpose: If your charity plans to accumulate funds for a major project or activity, such as building construction or equipment purchase, it may require approval from the CRA. Since charities are generally required to spend 3.5% of the average value of investment assets on charitable activities annually, accumulating significant funds for a specific purpose while meeting the disbursement quota can be challenging. Inform the CRA about the purpose, amount, and expected duration of fund accumulation. Upon written approval, the funds set aside for the project will be excluded from investment asset and disbursement quota calculations, even if they are invested pending expenditure on the charitable project.
• Changing charitable designation: If you disagree with your charity's original designation as a charitable organization, public foundation, or private foundation, or wish to change the designation later, you can apply for re-designation with the CRA.

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Instances when seeking professional assistance is worthwhile

Charities may find it beneficial to seek professional advice on certain occasions to ensure compliance with the obligations set forth by the CRA. There are several types of professionals who can offer valuable services to assist charities in meeting these requirements.

Bookkeepers play a critical role in the day-to-day operations of recording transactions in a charity's accounting records. This includes tasks such as paying bills, depositing funds in the bank, recording transactions, preparing tax receipts, and reconciling accounts.

Accountants build upon the work of bookkeepers and provide additional services such as reconciling accounts, preparing and recording adjusting entries in the accounting system, recommending and applying accounting policies and principles, preparing financial statements and reports, and assisting with budgeting. Their expertise can be vital in ensuring that a charity's financial records are accurate and compliant.

Auditors conduct independent examinations of a charity's financial statements to verify the accuracy and reliability of the financial information presented. Their objective is to provide assurance to third parties, such as funders, that the financial statements fairly represent the charity's financial outcomes.

Legal professionals perform a central role in assisting charities with legal matters. This may include incorporating and registering for charitable status, interpreting and applying relevant laws and regulations, and maintaining corporate records, such as minutes and by-laws.

Appraisal and valuation professionals may be engaged by charities to establish the fair value of significant or unique in-kind gifts received. This can be particularly relevant when dealing with non-monetary donations, and their expertise can help ensure that the charity's valuation is accurate and in compliance with regulations.

Systems professionals can provide valuable assistance in setting up accounting systems, particularly those that are computerized. This may involve configuring accounting software and supporting hardware, and involving qualified accountants in developing the chart of accounts to ensure accuracy and compliance with regulatory requirements.

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Locating trustworthy and qualified professionals

One effective method for identifying trustworthy professionals is to ask for referrals from reputable colleagues in other charitable organizations. These referrals are based on firsthand positive experiences with professionals who have dealt with similar situations. After obtaining a list of potential candidates, conducting interviews can assist in evaluating their relevant experience, skills, and approach to ensure they are well-suited for your specific requirements.

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