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CRA News, Information, and Events Specific to Registered Charities
Charities Connection is a new electronic publication that has replaced the Registered Charities Newsletter. It is shorter and gives registered charities more timely information on technical issues, new guidance and policy changes, Charities Directorate initiatives, and reminders.
No. 3 - June 2010
- Service Clubs and Fraternal Societies
- Changes to webpage addresses (URLs)
- Are you HST ready?
- Increasing text size on our webpages
Service club and fraternal society type organizations, which include social societies, lodges, orders, etc., do not qualify for charitable registration because they typically carry out a mix of charitable and non-charitable activities.
However, some service clubs and fraternal societies choose to establish a separate corporation or trust, which they register as a charity, to carry out those activities that are exclusively charitable. (Charitable, in this sense, means charitable at law, which is more restrictive than what is generally considered benevolent or good works. For more information on purposes and activities that are charitable at law see What is charitable?).
A review of the results from audits conducted on these types of charities has revealed many common issues of non-compliance, some of which include:
- the finances of the registered charity (i.e., the separate entity) are devoted to the non-charitable activities of the related service club/fraternal society;
- the financial transactions of the charity and the service club/fraternal society are combined in the T3010, Registered Charity Information Return, and the financial statements, filed by the registered charity;
- official donation receipts are issued for transactions that are not considered gifts (for more information about gifts, see What is a gift?);
- official donation receipts are missing some of the elements required by the Income Tax Act under Regulation 3501(1); and
- the registered charity makes gifts to non-qualified donees (for example, the service club/fraternal society itself, national and international bodies related to the service club/fraternal society, or a summer camp linked to the service club/fraternal society).
To address these issues of non-compliance, there are a number of steps the registered charity can take. For example:
- keep separate bank accounts;
- keep separate books and records;
- conduct separate board meetings and record separate meeting minutes;
- clearly identify the registered charity as a separate entity by using a name that is not identical to the name of the service club/fraternal society;
- establish receipting guidelines for the charity's directors, officers, staff, and volunteers (for more information about receipts, see Issuing receipts);
- make gifts only to qualified donees; and
- understand the difference between the charitable activities of the registered charity and the activities of the service club/fraternal society.
A service club or fraternal society that has established a separate entity as a registered charity must ensure that the operations of the registered charity are kept separate from the operations of the service club/fraternal society itself. The registered charity and the service club/fraternal society are two distinct entities. A registered charity that does not comply with the provisions of the Income Tax Act may be subject to sanctions (penalties and suspensions) and/or revocation of its charitable status.
For more information about maintaining registration, see Operating a registered charity.
On May 5, 2010, we released a What's new message saying that we are in the process of making structural changes to the Charities and giving webpages. The first stage of changes is complete and the second stage of our webpage maintenance project is now underway.
While the content on the pages will not change as a result of this process, the webpage addresses (URLs) will change. These changes take effect on July 14, 2010.
After July 14, 2010, if you use a current URL (including bookmarks) to access one of our pages, you will receive an error message that the link is broken. However, for the menu pages and some of our most popular pages, you will receive a message that the page has changed location, and you will be provided with the new URL.
After July 14, 2010, you will be able to update your bookmarks, browser favourites, and links to our webpages that you may have on your own webpages, or in other printed material.
We encourage you to use our primary URLs listed below. They will not be affected by the maintenance work.
- Charities and giving landing page:
- Checklists for Charities:
- Charities Listings (Search):
The Canada Revenue Agency answers questions on the harmonized sales tax (HST)
The answers to dozens of questions about the implications of the HST for Public Service Bodies (PSBs) are available from the Canada Revenue Agency (CRA).
As Ontario and British Columbia move towards implementing the HST on July 1, 2010, PSBs - including non-profit organizations, charities, municipalities, school and hospital authorities, public colleges and universities - may have questions concerning HST rebates or other rules or requirements resulting from the new tax.
To answer these questions, the CRA has developed the following publication: Harmonized Sales Tax for Ontario and British Columbia - Questions and Answers for Public Service Bodies.
For more information about the implementation of the HST, go to Harmonized Sales Tax (HST) for Ontario and British Columbia. The CRA updates these pages regularly. To receive information as it is updated, sign up for the HST electronic mailing list.
We have received a few comments regarding the font size used on our webpages. Some users find the font size too small.
To increase the text size on our webpages, you can change the settings in your web browser. Follow the instructions below based on the browser you are using or see your browser's help menu for details.
- Select "View" in the menu bar.
- Select "Text Size".
- Select "Larger" or "Largest"
- Select "View" in the menu bar.
- Select "Text Size".
- Select "Increase".
- To increase the text size further, continue selecting "Increase".
You can also try increasing the text size by using your mouse wheel:
Press and hold CTRL, and move the wheel on your mouse up or down to increase or decrease the text size.
- If you have not already done so, subscribe to the Charities and giving electronic mailing list.
- For education on operating a registered charity, check out our Charities Webinars and Charities Information Sessions.
- Do you have questions or comments about this edition of Charities Connection? Send an email to email@example.com
- Contact the Charities Directorate.
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