How to Avoid Common Mistakes When Filing T3010 Return

We know how stressful it gets when our charity’s T3010 return gets delayed or rejected because of simple mistakes we could have avoided.

We can prevent most T3010 filing errors by using the correct form version, including complete financial statements with matching fiscal year-ends, and ensuring all required signatures and attachments are in place. Common mistakes include filing incomplete returns, missing financial statements, and incorrect calculations that cause processing delays.

In this guide, we’ll walk through the most frequent T3010 mistakes we see Canadian charities make and show you exactly how to avoid them.

Understanding the T3010 Return and Its Importance

The T3010 Registered Charity Information Return serves as our charity’s annual accountability report to the Canada Revenue Agency. Understanding this form and its requirements helps us avoid costly mistakes and maintain our charitable status.

Filing errors or delays can result in significant penalties and jeopardize our organization’s future.

What is the T3010 Registered Charity Information Return?

The T3010 is a comprehensive annual form that documents how we used our charitable funds and conducted our activities during the fiscal year. Every registered charity in Canada must complete this return, regardless of our organization’s size or activity level.

The return includes detailed financial information about our revenue, expenses, assets, and liabilities. We must attach audited financial statements and complete specific schedules based on our charity’s circumstances.

The form requires us to report on:

• Charitable programs and activities we conducted
• Fundraising costs and administrative expenses
• Directors and trustees information and compensation
• Transactions with non-arm’s length parties
• Property holdings not used for charitable activities

We use the same T3010 form whether our charity raised $1,000 or $10 million during the fiscal year. However, larger charities face additional reporting requirements through Schedule 6.

Why Charities Must File the T3010

Filing our T3010 maintains our legal standing as a registered charity and preserves our tax-exempt status. The CRA uses this information to monitor our compliance with charitable regulations and ensure we’re operating within our stated purposes.

We must file the T3010 to keep our charitable registration active and maintain our ability to issue official donation receipts. This annual filing demonstrates that we’re using donations for legitimate charitable purposes and meeting our spending requirements.

The CRA monitors our compliance through several key requirements:

• Disbursement quota: Spend at least 3.5% of total assets on charitable activities
• Charitable purposes: Operate within our registered purposes and objects
• Fund accumulation: Follow rules for holding funds beyond one year
• Political activities: Stay within permitted limits for political activities

Our filing also shows transparency to donors and the public. The CRA publishes summary information from our T3010 on their website, allowing donors to research our organization before contributing.

Consequences of Filing Errors or Late Submission

Filing mistakes or missing deadlines can trigger serious consequences that threaten our charity’s operations and reputation. The CRA imposes automatic penalties and may take enforcement action against non-compliant organizations.

Late filing results in penalties of $500 per month until we submit our return. The CRA can revoke our charitable status if we fail to file for one full year, permanently ending our tax-exempt status and receipting privileges.

Common consequences of filing errors include:

• Compliance letters: Requests for explanations or corrections
• Audit requests: Detailed reviews of our operations and finances
• Processing delays: Hold-ups that affect our annual filing schedule
• Penalty assessments: Financial costs for late or incorrect submissions
• Increased scrutiny: Enhanced monitoring of future returns

Repeated filing problems can result in increased scrutiny of future returns and potential restrictions on our operations. In severe cases, the CRA may suspend our receipting privileges or impose other sanctions before considering revocation.

Key Filing Requirements and Common Mistakes

Understanding the specific requirements and deadlines for T3010 filing helps us avoid the most frequent errors that charities make. Many of these mistakes stem from misunderstanding basic filing rules or overlooking critical documentation requirements.

Proper preparation and attention to detail can prevent most compliance issues and processing delays.

Critical T3010 Filing Deadlines

We must file our complete T3010 return no later than six months after the end of our fiscal period. Missing this deadline triggers automatic penalties and puts our charitable status at risk.

The filing deadline depends entirely on our charity’s fiscal year-end date. For example, charities with a December 31 fiscal year-end must file by June 30, while those with a March 31 year-end must file by September 30.

Key filing deadlines include:

• January 31 year-end: File by July 31
• March 31 year-end: File by September 30
• June 30 year-end: File by December 31
• September 30 year-end: File by March 31
• December 31 year-end: File by June 30

Charities with fiscal years ending on or after December 31, 2023 must use T3010 version 24, which includes updated disbursement quota requirements and new reporting sections.

We cannot request extensions for T3010 filing deadlines. The CRA may revoke our charitable status for failure to file, which means we can no longer issue official donation receipts or remain tax-exempt.

Major Oversights That Lead to Non-Compliance

Many charities lose their registration due to preventable oversights that seem minor but have serious legal consequences. These compliance failures often result from misunderstanding basic charity law requirements or poor internal processes.

The most serious oversight is failing to meet the disbursement quota. We must spend at least 3.5% of our total assets from the previous year on charitable activities. Many charities miscalculate this requirement or fail to track their spending properly.

Common major oversights include:

• Using wrong T3010 version: Filing with outdated forms that don’t reflect current requirements
• Missing financial statement attachments: Submitting returns without required audited statements
• Incorrect disbursement quota calculations: Misunderstanding what counts toward the 3.5% requirement
• Unreported related party transactions: Failing to disclose payments to directors or connected organizations
• Incomplete signatures: Missing required director or trustee signatures in Section E

Operating outside our charitable purposes represents another critical oversight. We must ensure all our activities align with the objects stated in our governing documents and CRA registration.

Accumulating funds without permission also creates compliance problems. We can only hold funds beyond one year if we receive specific CRA approval or meet certain exemption criteria.

Mistakes with Incomplete or Missing Information

Incomplete T3010 returns cause processing delays and often trigger CRA compliance reviews. These information gaps force us to file amended returns and may result in penalties or increased scrutiny.

Missing director and trustee information represents one of the most common filing errors. We must provide complete details for all board members, including full names, addresses, dates of birth, and arm’s length status.

Critical information that charities frequently omit includes:

• Form T1235: Complete director, trustee, and official information with postal codes and birth dates
• Form T1236: Registration numbers for all qualified donees that received our gifts
• Detailed program descriptions: Specific explanations of charitable activities (not fundraising) in Section C2
• Financial statement reconciliation: Ensuring our T3010 figures match attached audited statements
• Property reporting: Details about assets not used directly in charitable activities

Incorrect financial calculations create serious problems when our T3010 totals don’t balance. Lines 4500 to 4650 must equal line 4700 in Section D, and lines 4860 to 4920 must equal line 4950.

We must choose between completing Section D or Schedule 6 based on our charity’s size and circumstances. Using both sections or selecting the wrong one creates filing errors that require amendments.

Preparing Your Financial Statements and Supporting Documents

Accurate financial statements form the foundation of our T3010 filing and demonstrate our accountability to donors and regulators. Many T3010 rejections stem from incomplete, inconsistent, or improperly prepared financial documentation.

Proper preparation of financial statements and attachments prevents processing delays and compliance issues with the CRA.

How to Prepare Audited and Unaudited Financial Statements

We must include complete financial statements with every T3010 filing, regardless of our charity’s size or revenue level. The CRA recommends professional audits for charities with income over $250,000, while smaller organizations can have their treasurer sign unaudited statements.

Financial statements should include at least a statement of assets and liabilities (balance sheet) and a statement of revenue and expenditures (income statement), along with any prepared notes about accounting policies, investment details, revenue sources, and transactions with non-arm’s length parties.

Our financial statements must include these essential components:

• Statement of assets and liabilities (balance sheet) showing our financial position
• Statement of revenue and expenditures (income statement) detailing our fiscal year activity
• Notes to financial statements explaining accounting policies and significant transactions
• Details of investments including maturity dates and interest rates
• Sources of revenue such as government grants or donation categories
• Non-arm’s length transactions with related parties or organizations

We must choose either the cash basis method or the accrual basis method for financial reporting and use that same method consistently throughout our entire T3010 return. However, we must always use the cash method to report gifts we received, regardless of our chosen accounting method.

Professional audited statements provide additional credibility and may be required by funders or provincial regulations. Audited statements must follow Canadian accounting standards and include the auditor’s opinion letter.

Avoiding Errors in Statement of Financial Position and Operations

Financial statement errors create cascading problems throughout our T3010 filing when numbers don’t reconcile between our statements and the return. These discrepancies trigger CRA inquiries and often require amended filings.

The most critical requirement is ensuring our T3010 financial figures match our attached financial statements exactly. Any variance between these documents will cause processing delays and compliance questions.

Common financial statement errors include:

• Misclassification of expenses between charitable programs, fundraising, and administration
• Incorrect asset valuation for investments, property, or equipment
• Missing restricted fund reporting for donor-designated or endowment funds
• Incomplete related party disclosures for transactions with directors or connected organizations
• Wrong fiscal period dates that don’t match our T3010 filing period
• Inconsistent accounting methods mixing cash and accrual reporting within the same statement

Revenue classification errors frequently occur when we incorrectly categorize government grants, donations, or program fees. We must properly distinguish between charitable donations, government funding, and earned revenue from programs or services.

Our statement of operations must clearly show the true cost of our charitable programs versus fundraising and administrative expenses. The CRA uses this breakdown to assess our operational efficiency and compliance with spending requirements.

Asset reporting mistakes often involve failing to properly classify restricted assets, investments held for charitable purposes, or property not used in our charitable activities.

Providing the Right Attachments with Your T3010

Missing or incorrect attachments represent one of the most frequent causes of T3010 processing delays. We must include all required supporting documents with specific information that matches our return data.

Form T1235 provides complete information about our directors, trustees, and like officials. This form requires full names, complete addresses including postal codes, dates of birth, and arm’s length status for every board member.

Essential T3010 attachments include:

• Complete financial statements with all required components and notes
• Form T1235: Director, trustee, and official information with all required details
• Form T1236: Registration numbers for all qualified donees that received our gifts
• Auditor’s report if we’re filing audited financial statements
• Detailed program descriptions explaining our charitable activities and their impact
• Related party transaction details for any non-arm’s length dealings

Form T1236 documents all gifts we made to qualified donees during our fiscal year. We must provide the complete registered name and registration number for each recipient organization, along with the exact amount of our gift.

Missing signatures in Section E frequently cause return rejections. We must have a director, trustee, or like official sign and date this section to certify the accuracy of our filing.

Provincial registration certificates may be required in some jurisdictions where we operate, especially if we conduct fundraising activities or operate across provincial boundaries.

Completing Major Sections and Schedules of the T3010

The T3010 form contains several critical sections that require careful attention to detail and proper understanding of when to use each section. Mistakes in these major sections often trigger CRA compliance reviews and processing delays.

Version 24 of the T3010 makes updates to disbursement quota requirements with an entirely new schedule, asks foundations additional questions, and makes adjustments to Schedule 6 for detailed financial information.

Navigating Section D and Schedule 6 Accurately

We must choose between completing Section D or Schedule 6 for our financial reporting, but never both. This decision depends on our charity’s size, revenue, and specific circumstances outlined in the CRA guidelines.

We cannot fill out both Section D and Schedule 6, or parts of both. Making the wrong choice creates filing errors that require amended returns and often triggers compliance inquiries.

We must complete Schedule 6 instead of Section D if any of the following apply to our charity:

• Gross revenue exceeds $100,000 during the fiscal year
• Property not used in charitable activities exceeds $25,000 in value
• Permission to accumulate funds has been granted by the CRA for the fiscal year
• Complex financial structure requires detailed reporting beyond Section D capabilities

Section D serves smaller charities with straightforward operations and limited assets. If we use Section D, lines 4500 to 4650 (excluding line 4505) must equal line 4700, and lines 4860 to 4920 must equal line 4950.

Schedule 6 provides detailed financial information for larger charities and those with complex operations. When completing Schedule 6, lines 4500, 4510 to 4580, and 4600 to 4650 must equal line 4700, while lines 4800 to 4920 must equal line 4950.

We can only enter amounts on lines 5500 and 5510 in Schedule 6 if we have received specific permission to accumulate funds. Lines 5900 and 5910 are for reporting property that we own but don’t use for charitable activities.

Common Section D and Schedule 6 errors include using the wrong form for our charity’s circumstances, failing to balance required line totals, and incorrectly reporting accumulated funds without proper authorization.

Reporting Charitable Activities and Programs Clearly

Section C2 requires us to describe our charitable activities, not our fundraising efforts. This distinction causes frequent filing errors when charities focus on how they raise money rather than what they accomplish with those funds.

We must provide specific, detailed descriptions of our actual charitable programs and their impact on beneficiaries. Generic statements like “helping people” or “community support” don’t meet CRA requirements for program reporting.

Our charitable activity descriptions should include:

• Specific programs we delivered during the fiscal year
• Target beneficiaries who received our services or support
• Geographic areas where we conducted our charitable work
• Measurable outcomes and impact on the communities we serve
• Partner organizations we worked with to deliver programs
• Resources committed to each major charitable activity

Avoid fundraising descriptions in Section C2. We shouldn’t describe our charity drives, events, or donation campaigns as charitable activities. These are fundraising methods, not charitable programs.

Program impact reporting helps demonstrate our effectiveness and accountability. We should explain how our charitable activities address specific community needs and create positive change for our beneficiaries.

Multi-program charities need to describe each significant charitable activity separately. We can’t lump all our programs together under one generic description.

Inactive periods still require reporting. If we didn’t conduct charitable activities during a fiscal year, we must explain why and what steps we’re taking to resume operations.

Mistakes When Reporting Fundraising Activities

Fundraising cost reporting frequently contains errors that can trigger CRA audits and compliance questions. We must accurately distinguish between fundraising expenses, charitable program costs, and administrative expenses throughout our T3010 filing.

Misclassifying fundraising costs as charitable expenses inflates our reported charitable spending and can make us appear to meet disbursement quota requirements when we actually don’t. This creates serious compliance issues.

Common fundraising reporting mistakes include:

• Classifying event expenses incorrectly when events combine fundraising with charitable activities
• Allocating staff time improperly between fundraising, programs, and administration
• Reporting fundraising revenue without corresponding expense allocation
• Missing gift-in-kind valuations for donated goods or services used in fundraising
• Incorrect professional fundraiser reporting and commission structures
• Omitting fundraising licenses required in various provinces

Professional fundraiser relationships require detailed reporting including their names, addresses, and amounts paid for services. We must report both commissions and flat-fee arrangements with external fundraising organizations.

Special event reporting creates particular challenges when events serve both fundraising and charitable purposes. We need to carefully allocate costs and revenues between these different functions.

Direct mail and online fundraising costs must include all associated expenses such as printing, postage, payment processing fees, and staff time devoted to campaign development and management.

Gift processing costs should be allocated to fundraising rather than charitable activities, including receipt preparation, donor database management, and acknowledgment communications.

Correctly Disclosing Directors, Trustees, and Donations

Accurate reporting of our governance structure and charitable giving requires careful attention to specific forms and detailed information requirements. Missing or incorrect information about directors, trustees, and donations frequently triggers CRA compliance reviews and processing delays.

The T3010 includes mandatory reporting schedules that must be completed with precise details about our board members and all charitable gifts we made during the fiscal year.

Filling Out Form T1235 and Arm’s Length Status

Form T1235 identifies our board of directors, trustees, and like officials and must be submitted with every annual T3010 return. This form requires complete information for every person who served on our board during any part of the fiscal year.

We must provide comprehensive details for each board member including full legal names, complete home addresses with postal codes, dates of birth, and their arm’s length status with respect to our charity.

Form T1235 requires us to report:

• Full legal names of all directors, trustees, and like officials
• Complete home addresses including street address, city, province, and postal code
• Dates of birth for each board member (month, day, and year)
• Arm’s length status indicating their relationship to the charity
• Positions held such as president, secretary, treasurer, or director
• Compensation received including salaries, fees, or other payments

Arm’s length status determines whether board members have special relationships with our charity that could create conflicts of interest. Non-arm’s length relationships include family members of other directors, major donors, or individuals with significant business relationships with our organization.

Common Form T1235 errors include missing postal codes, incomplete addresses, wrong birth dates, and incorrect arm’s length designations. We must update this form whenever board membership changes during our fiscal year.

Privacy considerations require us to obtain consent from board members before including their personal information on Form T1235, since this information becomes part of our public filing with the CRA.

Compensation reporting must include all payments made to directors, including meeting fees, travel reimbursements, and any other financial benefits they received from our charity during the fiscal year.

Completing Form T1236 for Qualified Donees

Form T1236 identifies all gifts we made to qualified donees and other organizations during our fiscal year and must be submitted along with our annual T3010 return. This form requires specific information about each recipient organization and the exact amounts we provided.

We must complete Form T1236 for every gift made to qualified donees, regardless of the amount. Missing this form or providing incomplete information can delay processing and trigger compliance questions.

Form T1236 requires us to provide:

• Complete registered names of all qualified donee recipients
• Registration numbers for each qualified donee organization
• Exact gift amounts provided during our fiscal year
• Types of gifts such as cash, property, or other assets
• Purpose restrictions if gifts were designated for specific programs
• Geographic locations where recipient organizations operate

Qualified donee verification requires us to confirm that recipient organizations maintain their registered charity status at the time we made our gifts. We can verify this information through the CRA’s online charity listings.

Gift timing matters for T3010 reporting. We report gifts based on when we made them during our fiscal year, not when recipients received or used the funds.

Property gifts require fair market value assessments and detailed descriptions of the assets we transferred to qualified donees. We must obtain proper valuations for significant property gifts.

International qualified donees have specific reporting requirements when we make gifts to foreign charitable organizations that maintain qualified donee status in Canada.

New Rules for Grants to Non-Qualified Donees with Form T1441

Form T1441 is required when we make grants totaling more than $5,000 to non-qualified donees (grantees) during our fiscal year. This new form implements the qualifying disbursement regime that allows registered charities to work with non-qualified organizations under specific conditions.

Form T1441 requires detailed information about grants made to non-qualified donees, including information about the grant recipients (grantees). We must demonstrate that these grants qualify as charitable disbursements under the Income Tax Act.

Form T1441 reporting requirements include:

• Complete grantee information including names, addresses, and organizational details
• Grant amounts and purposes with specific descriptions of charitable activities funded
• Monitoring and oversight procedures we use to ensure proper use of grant funds
• Documentation requirements including grant agreements and reporting schedules
• Due diligence processes we followed before making grants to non-qualified donees
• Compliance verification showing grantees operate exclusively for charitable purposes

Qualifying disbursement criteria require that grants to non-qualified donees fund activities that would be charitable if carried out directly by our organization. We must maintain oversight and control over how these funds are used.

Documentation standards for Form T1441 require comprehensive grant agreements that specify charitable purposes, reporting requirements, and our right to monitor grantee activities and recover unused funds.

Due diligence obligations include verifying that grantees operate exclusively for charitable purposes and have the capacity to carry out the funded charitable activities effectively.

Reporting thresholds mean we must file Form T1441 when our total grants to all non-qualified donees exceed $5,000 during the fiscal year, regardless of individual grant sizes.

Filing Best Practices and CRA Compliance

Proper filing procedures and compliance practices help ensure our T3010 submission processes smoothly and meets all CRA requirements. The transition to digital-first filing methods offers significant advantages in accuracy, speed, and compliance verification.

To avoid delays, we should sign up to file our returns online using My Business Account (MyBA) or Represent a Client. Understanding the available filing options and establishing proper review procedures protects our charity from costly mistakes and processing delays.

Choosing Between Online and Paper Filing

We should file our T3010 information return online through our CRA account using the interactive form or CRA-certified software. Filing online ensures we identify all necessary forms, sections, schedules and appendices, and receive reminders to attach required documentation.

The CRA strongly encourages online filing as part of their digital-by-default approach. Online services help us avoid delays, possibilities of errors, and the risk of the information return getting lost.

Online filing advantages include:

• Built-in validation that catches common errors before submission
• Automatic form selection based on our charity’s circumstances and revenue
• Required attachment reminders ensuring we don’t miss supporting documents
• Immediate confirmation of successful filing and processing
• Faster processing times typically within days rather than weeks
• Next-day updates to the public List of Charities database

CRA-certified software options provide professional-grade filing capabilities for larger charities or those using accounting firms. We can upload and submit our software-generated return directly through our CRA account in My Business Account or Represent a Client.

Paper filing limitations mean we must print and mail our completed return to the Charities Directorate in Summerside, PEI. Paper returns take longer to process and lack the validation features of online filing.

Mailing address for paper returns: Charities Directorate
Canada Revenue Agency
105-275 Pope Road
Summerside PE C1N 6E8

Using My Business Account or Represent a Client

Filing our T3010 through My Business Account is easy. It helps us identify all necessary forms, sections, schedules and appendices. It also reminds us to attach required documentation.

My Business Account (MyBA) serves charities that handle their own T3010 filing internally. This account provides direct access to our charity’s information and filing history with the CRA.

Represent a Client accounts allow authorized representatives like accountants, lawyers, or consultants to file returns on our behalf. Professional representatives often use this system to manage multiple charity accounts.

Setting up online filing requires:

• Valid CRA login credentials linked to our charity’s business number
• Authorized signing authority for the person accessing the account
• Current contact information including address, phone, and email details
• Security verification through multi-factor authentication
• Representative authorization if using professional services

Account management responsibilities include keeping our contact information current, updating authorized users when board membership changes, and maintaining proper security protocols.

Access levels can be customized to allow different staff members appropriate permissions for viewing information, preparing returns, or authorizing final submissions.

Technical requirements include compatible web browsers, reliable internet connections, and ability to upload PDF attachments for financial statements and supporting documents.

Review and Sign-Off Procedures for Charity Administrators

Establishing proper review and approval processes helps prevent filing errors and ensures our T3010 accurately reflects our charity’s operations and financial position.

Multi-level review should involve our treasurer or finance committee reviewing financial information, program staff verifying activity descriptions, and board leadership providing final authorization.

Essential review procedures include:

• Financial reconciliation ensuring T3010 figures match our audited financial statements
• Program description accuracy verifying that Section C2 describes actual charitable activities
• Director information verification confirming Form T1235 contains current, complete details
• Supporting document checklist ensuring all required attachments are included
• Calculation verification checking that required line totals balance properly
• Deadline compliance confirming filing will occur before the six-month deadline

Board authorization typically requires formal approval from our board of directors before final submission. Many charities pass board resolutions authorizing specific officers to sign and file the T3010.

Documentation retention means keeping copies of our filed T3010, all supporting documents, and board authorization records for at least six years as required by CRA regulations.

Amendment procedures should be established in case we discover errors after filing. We must file amended returns promptly when significant errors are identified.

Professional oversight through qualified accountants or charity law specialists can provide additional validation and reduce compliance risks, especially for complex returns or first-time filings.

Long-Term Strategies to Prevent Future Mistakes

Building robust internal systems and maintaining proper oversight helps us avoid T3010 filing errors year after year. Proactive compliance management protects our charitable status and reduces the stress of annual filing deadlines.

Establishing consistent procedures and maintaining accurate records throughout the year makes T3010 preparation much easier and more reliable.

Institute Internal Controls and Annual Reviews

Strong internal controls help us maintain accurate financial records and ensure compliance with charity regulations throughout the year. Regular review processes catch potential problems before they become serious filing errors.

We should establish clear procedures for financial management, program reporting, and board governance that support accurate T3010 preparation. These systems work best when multiple people understand our processes and can provide oversight.

Essential internal controls include:

• Monthly financial reconciliation comparing bank statements to accounting records
• Quarterly disbursement quota tracking ensuring we meet annual spending requirements
• Board meeting documentation with detailed minutes of all governance decisions
• Expense approval procedures requiring proper authorization for all expenditures
• Donation receipt systems ensuring accurate and timely receipt issuance
• Program activity tracking documenting charitable activities and their outcomes

Annual review procedures should include comprehensive assessment of our financial controls, program effectiveness, and compliance with charity law requirements. We should schedule this review well before our T3010 filing deadline.

Segregation of duties prevents errors and fraud by ensuring different people handle financial transactions, record-keeping, and approval processes. No single person should control all aspects of our financial management.

Documentation standards require written policies for expense reimbursement, purchasing procedures, donation processing, and financial reporting. Clear written procedures help maintain consistency when staff or board members change.

Regular training for board members and staff ensures everyone understands their compliance responsibilities and knows how to implement our internal control procedures properly.

Maintain Records and Track Disbursement Quota

Proper record-keeping supports accurate T3010 filing and protects us during CRA audits or compliance reviews. We must maintain comprehensive documentation for all our financial transactions and charitable activities.

A registered charity must keep adequate books and records that allow the CRA to verify revenues, including all charitable donations received, verify that resources are spent on charitable programs, and verify that the charity’s purposes and activities continue to be charitable.

Our record-keeping requirements include:

• Governing documents including incorporating documents, constitution, bylaws
• Financial statements and supporting documentation for all fiscal years
• Official donation receipts and copies of all receipts issued
• Annual information returns including all filed T3010 forms and attachments
• Meeting minutes for board, committee, and member meetings
• Source documents such as invoices, contracts, bank statements, and expense accounts

Records must be kept at the Canadian address that the charity has on file with the CRA, including all books and records related to any activity carried on outside Canada.

Disbursement quota tracking requires ongoing monitoring of our charitable spending throughout the fiscal year. We must spend at least 3.5% of our total assets from the previous year on charitable activities and qualifying disbursements.

Retention periods vary by document type:

• Donation receipts: Minimum 2 years from the end of the calendar year donations were made
• Financial statements and T3010 forms: 6 years from the end of the last tax year they relate to
• Governing documents and meeting minutes: For the life of the charity plus 2 years after revocation
• 10-year gift records: For the life of the charity plus 2 years after revocation

Electronic record-keeping is acceptable but must follow specific requirements. Electronic records must be kept in an electronically readable format and be accessible from Canada, even if backup copies are stored elsewhere.

Know When to Consult a Charity Lawyer or Expert

Professional guidance helps us navigate complex charity law requirements and avoid costly compliance mistakes. Knowing when to seek expert advice can save our organization significant time, money, and regulatory problems.

We should consult charity law specialists when facing significant organizational changes, complex transactions, or regulatory uncertainties. Professional advice is especially important for new charities or organizations with limited compliance experience.

Situations requiring professional consultation include:

• Establishing new charities and navigating the registration process
• Major program changes that might affect our charitable purposes
• Complex financial transactions involving property transfers or investments
• Related party dealings with directors, major donors, or connected organizations
• Compliance issues arising from CRA audits or enforcement actions
• Merger or dissolution procedures requiring legal documentation

Qualified charity lawyers specialize in the Income Tax Act provisions governing registered charities and understand both federal and provincial regulatory requirements.

Charity accounting specialists provide expertise in financial statement preparation, T3010 completion, and ongoing compliance management systems.

Professional associations like the Canadian Association of Gift Planners and Association of Fundraising Professionals offer continuing education and networking opportunities for charity professionals.

Cost-benefit analysis should consider the potential consequences of compliance mistakes versus the cost of professional advice. CRA penalties, audit costs, and potential loss of charitable status often far exceed professional consultation fees.

Ongoing relationships with qualified professionals provide continuity and familiarity with our organization’s specific circumstances and compliance history.

Conclusion

Filing our T3010 correctly protects our charity’s future and demonstrates our commitment to transparency and accountability. The strategies we’ve outlined help us avoid the most common mistakes that lead to processing delays, penalties, and compliance issues with the CRA.

Building strong internal controls and maintaining proper records throughout the year makes T3010 preparation much easier and more reliable. When we establish consistent procedures and seek professional guidance when needed, we can focus on our charitable mission instead of worrying about regulatory compliance.

For complex T3010 situations or ongoing charity law support, the experienced team at Northfield & Associates provides specialized guidance to help Canadian charities navigate regulatory requirements successfully. Visit us to learn how we can support your organization’s compliance and governance needs.

Navigating director compensation rules can be complex.

Contact Northfield & Associates for expert guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.

Get professional support today by email at info@northfield.biz, by phone at (416) 317-6806, or visit us or Schedule your free consultation to discuss your charity’s director benefit questions with our experienced legal team.

Frequently Asked Questions

These frequently asked questions address the most common concerns we encounter when helping charities navigate T3010 filing requirements and compliance issues.

What are the common errors to avoid when completing the T3010 Registered Charity Information Return?

The most frequent errors include using outdated T3010 forms, missing required attachments like Forms T1235 and T1236, incomplete director information without postal codes or birth dates, and financial calculations that don’t balance properly.

What is the penalty for late filing T3010?

Late filing results in automatic penalties of $500 per month until we submit our return. The CRA can revoke our charitable status if we fail to file for one full year.

What are the essential documents that need to be attached to the T3010 return?

Essential attachments include complete financial statements, Form T1235 with director information, Form T1236 for qualified donee gifts, and Form T1441 if grants to non-qualified donees exceed $5,000.

Is there a penalty for filing an amended return?

No, the CRA does not impose specific penalties for voluntarily filing amended T3010 returns to correct errors.

How do I correct an error for filing the T3010 form, and what are the implications of mistakes?

We can request changes online through My Business Account or by mail to the Charities Directorate. Mistakes can cause processing delays and may trigger compliance reviews.

What happens if I don’t amend my return?

Failing to amend known errors can escalate into serious compliance issues, including penalties, sanctions, or potential loss of charitable registration.

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• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

Book a Call

Contact us today to schedule your consultation.

Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

• If you or anybody that you know, think that you meet the requirements and wish to receive further information.
• We can help you start the application process and confirm eligibility requirements to participate.
• We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.

Book a Consultation Today

Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.

Book a call with a Consultation

Join the community of Northfield & Associates

Connect with peers and community ambassadors to hear real experiences, tips, and advice about studying abroad.

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About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Questions?

info@northfied.biz

Within Corporate Newsroom  

Media Contact:

media@northfied.biz

Press contact 

PR PR Secretary
press@northfied.biz

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.

Revocation of a Qualified Donee

Income Tax Act S. 149(4.3) The Minister may, in the manner described in section 168, revoke the registration of a qualified donee referred to in paragraph (a) of the definition qualified doneein subsection (1) for any reason described in subsection 168(1).

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Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian law and can help ensure your organization follows proper procedures.

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At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.

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What We Do!

We’re often asked by prospective clients what our Bookkeeping service. People want to know what specific tasks we do, and what their responsibility is. This brief explainer page will answer that question. This is by no means an exhaustive list, but covers the most frequently asked questions.

Getting Started

• Review your existing books for needed corrections or back-work
• Chart of accounts setup or amendment
• Assistance with setting up bank feeds
• Limited assistance* with setting up payroll (QBO or Gusto only)
• Your books brought current and reconciled if needed

Ongoing Monthly Bookkeeping

• After-the-fact transaction recording
• Post to general ledger
• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

Book a Call

Contact us today to schedule your free consultation.

Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Contact us today to schedule your free consultation.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your free consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

• If you or anybody that you know, think that you meet the requirements and wish to receive further information.
• We can help you start the application process and confirm eligibility requirements to participate.
• We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.

BOOK A CONSULTATION TODAY

Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.

BOOK A CALL WITH A CONSULTATION

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Northfield & Associates is a Canadian consulting firm based in Toronto, Canada. Northfield & Associates specializes in all types of immigration matters, from spousal sponsorships to refugee board appeals. With over eight (8) years of experience and an excellent success rate, Northfield & Associates is recognized as one of Canada’s premier immigration consulting firm.

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The purpose of the Free Assessment is to assess whether you are qualified to apply for permanent residence in Canada under the Family Sponsorship, Skilled Worker, or Business Class categories. Please choose which category you would like to be assessed under and complete all fields in the form. We will endeavor to complete your assessment and provide you with a reply within one business day. There is no charge for this service. All information provided will be kept strictly confidential. If our assessment indicates that you are qualified for immigration to Canada, we will contact you to provide further information about our services and fees. Start Your Immigration Application!

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About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

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As a global consulting firm, Northfield & Associates helps clients with total transformation, driving complex change, enabling organizations to grow, and driving bottom-line impact.

 Learn about our offices in Canada, read our latest thought leadership, and connect with our team.

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Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Questions?

info@northfied.biz

Within Corporate Newsroom  

Media Contact:

media@northfied.biz

Press contact 

PR consultants
press@northfied.biz

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.

Letters Patent vs Articles of Incorporation in Canada

If you’re thinking about starting a charity or nonprofit in Canada, especially in Ontario, you may have come across terms like Articles of Incorporation and Letters Patent. They might sound the same, but they’re not and understanding the difference between letters patent and articles of incorporation is crucial for your organization’s legal compliance and governance.

Whether you’re incorporating a new nonprofit, transitioning an existing organization under ONCA, or applying for CRA charity registration, knowing which governing document applies to your organization affects everything from board structure to amendment procedures. In this guide, we’ll break down what these terms mean, how they differ, and what you need to know about federal vs provincial nonprofit incorporation in Canada.

What Are Letters Patent?

Letters patent are an old-fashioned way of officially and legally starting a nonprofit. Before 2010, this was the legal document you received from the government when your nonprofit was approved in Ontario. Think of it like a birth certificate it gave your group legal life.

The word patent comes from a Latin phrase meaning “open letter.” It’s called that because it’s a public document. The government uses it to show that they’ve allowed a group or company to exist.

What Is the Purpose of Letters Patent?

The purpose of a letter patent was to create a legal entity. It told the world:

• Who started the organization
• What its goals are (like helping the community, raising awareness, or providing services)
• Who’s running it (called directors)
• What rules will it follow
• Rules for amending the organization’s structure
• Restrictions on dissolving the organization

For charities, the letters patent also included charitable objects, which are specific goals your organization must stick to in order to stay registered as a charity with the CRA.

Are Articles of Incorporation the Same as Letters Patent?

Not exactly. Articles of Incorporation replaced letters patent when newer laws came into effect.

• For Ontario nonprofits, the Not-for-Profit Corporations Act (ONCA) came into force in October 2021. Since then, new nonprofits apply using Articles of Incorporation instead of letters patent. Organizations that didn’t transition by the ONCA deadline (October 19, 2024) faced administrative dissolution, though some extensions were granted.
• For federal nonprofits, the Canada Not-for-profit Corporations Act replaced the old system in 2011. That means federally incorporated charities and nonprofits now also use Articles of Incorporation.

So if you’re starting a nonprofit or charity today, you won’t use letters patent anymore. But if your organization was created before these new laws, you might still have letters patent on file. That’s why you’ll hear both terms, even though only one is still used for new applications.

What Are Articles of Incorporation?

Articles of Incorporation are the modern version of letters patent. They’re a form you submit to either:

• Corporations Canada, if you want to register your nonprofit at the federal level, or
• ServiceOntario, if you’re incorporating a nonprofit within Ontario

This document includes similar information to letters patent:

• The legal name of your organization
• The purpose or mission of the nonprofit or charity
• The structure (who the directors are, where the office is, etc.)
• Any special rules or restrictions

Once approved, you officially exist as a legal nonprofit or charity. You can then open bank accounts, hire staff, apply for grants, and register as a charity if eligible.

How Letters Patent and Articles of Incorporation Affect CRA Charity Registration

Whether your organization operates under letters patent or articles of incorporation has direct implications for your CRA charity registration. Here’s what you need to know:

Charitable Objects Must Be Clearly Stated

Both documents must contain your organization’s charitable objects—the specific purposes that qualify your organization as a charity under Canadian law. The CRA requires these objects to fall into one or more of the four recognized charitable categories:

• Relief of poverty
• Advancement of education
• Advancement of religion
• Other purposes beneficial to the community

CRA Requirements for Charitable Purposes

When drafting either letters patent or articles of incorporation for a charity, the charitable objects must be:

• Exclusively charitable: Your organization cannot have non-charitable purposes mixed in
• Specific and clear: Vague language like “doing good works” won’t meet CRA standards
• Legally compliant: Objects must align with current charity law definitions

Common Mistakes in Drafting Charitable Objects

Many organizations run into problems when their governing documents contain:

• Purposes that are too broad or vague
• Non-charitable activities listed as objects (like political activities)
• Objects that could benefit private individuals rather than the public
• Language that doesn’t match CRA’s interpretation of charitable purposes

Transitioning Your Governing Documents

If you’re transitioning from letters patent to articles of incorporation, you generally do not need to reapply to the CRA for charity registration. However, you must:

• Ensure your charitable objects remain substantially the same
• Notify the CRA of any changes to your governing documents
• Submit updated articles to the CRA within required timelines
• Maintain consistency between your articles and your T3010 annual return

If you’re making significant changes to your charitable objects during the transition, consult with a charity lawyer first material changes may require CRA approval to maintain your registered status.

Key Differences: Letters Patent vs Articles of Incorporation

Understanding the practical differences between these two types of governing documents helps you appreciate why transitioning from letters patent to articles of incorporation offers significant advantages:

Governance Flexibility

Letters Patent:

• Often specify exact number of directors (e.g., “seven directors”)
• Rigid board structure requirements
• Limited flexibility for organizational growth

Articles of Incorporation:

• Allow for variable board sizes (e.g., “minimum 3, maximum 15 directors”)
• More adaptable governance structures
• Easier to adjust as organization evolves

Amendment Process

Letters Patent:

• Require supplementary letters patent for most changes
• More complex and costly amendment procedures
• Government approval needed for structural changes

Articles of Incorporation:

• Can be amended through special resolution in most cases
• Simpler, faster amendment process
• More cost-effective to update

Modern Governance Features

Letters Patent:

• Limited provisions for electronic meetings
• Older proxy and voting procedures
• May not address current governance best practices

Articles of Incorporation:

• Specifically allow electronic meetings and voting
• Modern member rights and notification requirements
• Built-in provisions for current governance standards

Director Liability Protections

Letters Patent:

• Often lack specific indemnification clauses
• May have outdated liability provisions

Articles of Incorporation:

• Include modern indemnification protections for directors
• Clear provisions regarding director duties and liabilities
• Better alignment with current corporate law protections

Reporting Requirements

Letters Patent:

• May be subject to older reporting regimes
• Less standardized disclosure requirements

Articles of Incorporation:

• Clear, standardized annual filing requirements
• Consistent reporting across all organizations under same Act
• Better compliance tracking systems

Do I Need to Worry About Letters Patent?

If you’re starting a new nonprofit, probably not. You’ll be using Articles of Incorporation instead.

But if you’re already part of a charity that was formed before 2011 (federal) or before 2021 (Ontario), your organization may still be governed by letters patent. That means:

• You should review your letters patent and bylaws
• You may need to update your documents to meet current laws
• You might need to switch over to the new rules (called “transitioning under ONCA” in Ontario or “continuance” federally)

How to Transition from Letters Patent to Articles of Incorporation

If your organization still operates under letters patent, transitioning to articles of incorporation—known as continuance—is an important step for compliance and modernizing your governance structure.

Why Transition?

Transitioning from letters patent to articles of incorporation provides several benefits:

• Legal compliance: Meet current provincial or federal requirements
• Governance flexibility: Adopt modern governance practices like electronic meetings
• Simplified amendments: Make future changes more easily and cost-effectively
• Better indemnification: Protect your directors with updated liability provisions
• Clearer structure: Benefit from standardized, contemporary corporate language

ONCA Transition Requirements (Ontario)

For Ontario nonprofits, the ONCA transition deadline was October 19, 2024. Organizations that missed this deadline risked administrative dissolution, though some received extensions. If your organization hasn’t transitioned yet:

• Contact ServiceOntario or a charity lawyer immediately
• File your articles of amendment or continuance
• Update your bylaws to comply with ONCA
• Ensure your charitable objects remain compliant with CRA requirements

Federal Continuance Process

For federal nonprofits operating under letters patent, the continuance process involves:

• Filing articles of continuance with Corporations Canada
• Adopting new bylaws that comply with the Canada Not-for-profit Corporations Act
• Passing special resolutions at a members’ meeting
• Updating your charitable objects if necessary

What Documents Need Updating

When transitioning, you’ll typically need to update:

• Articles of Continuance or Amendment: Your new governing document
• Bylaws: Must comply with current Act (ONCA or federal NFP Act)
• Charitable objects: Reviewed and confirmed to meet CRA standards
• Member register: Updated to reflect new requirements
• Director register: Ensuring compliance with new standards

Costs and Timeline

The continuance process typically involves:

• Government filing fees: $155-$330 depending on jurisdiction
• Legal fees: $2,000-$5,000+ depending on complexity
• Timeline: 2-6 months from start to completion, depending on organization’s readiness

Organizations with complex structures, multiple classes of members, or unique charitable objects may require more time and legal support.

Working with Legal Counsel

Transitioning from letters patent to articles of incorporation is a legal process that affects your organization’s fundamental structure. It’s recommended to work with a charity lawyer who can:

• Review your current letters patent and bylaws
• Draft compliant articles of continuance
• Ensure charitable objects meet CRA requirements
• Guide your board through required resolutions and meetings
• File all necessary documents with government authorities

Common Mistakes to Avoid

When dealing with letters patent and articles of incorporation, organizations frequently make these mistakes:

Not Transitioning by Required Deadlines

Many Ontario nonprofits missed the ONCA transition deadline, resulting in administrative dissolution or scrambling for last-minute compliance. Always monitor regulatory deadlines and plan your transition well in advance.

Changing Charitable Objects Without CRA Approval

If you’re a registered charity transitioning to articles of incorporation, don’t make substantial changes to your charitable objects without consulting the CRA. Material changes could jeopardize your registered status.

Assuming Letters Patent Automatically Convert

Letters patent do not automatically become articles of incorporation. You must file the proper continuance or amendment documents with the government to complete the transition.

Not Updating Bylaws

Transitioning your governing document without updating your bylaws creates inconsistencies. Your bylaws must align with your new articles of incorporation and comply with the current Act.

Failing to Involve Legal Counsel

Corporate transitions are complex legal processes. Organizations that attempt DIY transitions often end up with non-compliant documents, miss required filings, or create governance problems that are costly to fix later.

Ignoring Member Approval Requirements

Continuance typically requires a special resolution passed by members. Failing to properly notify members, hold required meetings, or achieve the necessary voting threshold can invalidate your transition.

Final Thoughts

To keep it simple: Letters patent are the old version, and articles of incorporation are the new version of the same idea legally forming your nonprofit or charity.

If you’re unsure what your organization has, or if you’re starting fresh, let us help. Getting it right at the beginning or transitioning correctly is key to running a successful charity that meets both government and CRA requirements.

Contact Northfield & Associates for a Complimentary 15 Minute Strategy Session

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Whether you’re updating for ONCA or starting a new nonprofit, we’ll guide you every step of the way.

Frequently Asked Questions

Letters patent served as the old legal document for forming nonprofits before 2010 in Ontario. Articles of incorporation replaced them under modern federal and provincial laws.

Understanding these documents helps clarify how Canadian nonprofits are legally established today.

What are letters patent in Canada?

Letters patent were the original documents used to form nonprofits and corporations in Canada, granting them legal existence. They were public documents containing key information like the organization’s name, purpose, and rules. In Ontario, they were used until 2010; federally, until 2011. Organizations with older structures may still operate under letters patent but may need to update their documents to comply with modern laws.

What are Articles of Incorporation in Canada?

Articles of incorporation are now the standard legal documents for creating nonprofits and corporations in Canada. They are filed with either Corporations Canada or ServiceOntario, depending on whether the organization is federal or provincial. Articles include important details about the organization’s name, purpose, structure, and rules. Once approved, the organization becomes a legal entity and can operate officially.

What is a certificate of Incorporation in Canada?

A certificate of incorporation is the official document issued by the government after your articles of incorporation are approved. It confirms your organization’s legal status and includes details like the incorporation date and number. This certificate is often required to open bank accounts or conduct business in Canada.

What are articles of association in Canada?

Articles of association are not commonly used in Canadian law. Instead, Canada uses articles of incorporation, which serve the same purpose of outlining the structure and rules of a corporation. Some older organizations might still have articles of association, but most use articles of incorporation along with bylaws for governance.

What are the forms of articles of association?

Canada does not use articles of association as standard. The typical documents are articles of incorporation, bylaws, and sometimes policies and procedures. These documents together set out how a corporation is structured and governed, with specific forms varying by federal or provincial incorporation.

What implications do Letters Patent and Articles of Incorporation have on the governance and structure of a Canadian corporation?

Both letters patent and articles of incorporation create the legal framework for a corporation, setting its purpose and rules. Letters patent often mean an older governance structure, which may need updating to comply with current laws. Articles of incorporation offer more flexibility, such as variable board sizes and electronic voting. Transitioning to articles can modernize governance and ensure compliance with today’s legal requirements.

Do I need to convert my letters patent to articles of incorporation?

If your organization is incorporated in Ontario and was formed before October 2021, you were required to transition to articles of incorporation under ONCA by October 19, 2024. Organizations that missed this deadline may face administrative dissolution. For federal nonprofits formed before 2011, continuance under the Canada Not-for-profit Corporations Act is strongly recommended but may not have a hard deadline. Transitioning provides governance flexibility and ensures compliance with current corporate law.

Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian law and can help ensure your organization follows proper procedures.

Get professional support today

Email info@northfield.biz

Phone (416) 317-6806

Visit us https://www.northfield.biz/

 Appointment Schedule your free consultation 

To discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

READY FOR BETTER NONPROFIT REPORTING?

At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.

GET IN TOUCH

What We Do!

We’re often asked by prospective clients what our Bookkeeping service. People want to know what specific tasks we do, and what their responsibility is. This brief explainer page will answer that question. This is by no means an exhaustive list, but covers the most frequently asked questions.

Getting Started

• Review your existing books for needed corrections or back-work
• Chart of accounts setup or amendment
• Assistance with setting up bank feeds
• Limited assistance* with setting up payroll (QBO or Gusto only)
• Your books brought current and reconciled if needed

Ongoing Monthly Bookkeeping

• After-the-fact transaction recording
• Post to general ledger
• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

Book a Call

Contact us today to schedule your free consultation.

Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Contact us today to schedule your free consultation.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your free consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

• If you or anybody that you know, think that you meet the requirements and wish to receive further information.
• We can help you start the application process and confirm eligibility requirements to participate.
• We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.

BOOK A CONSULTATION TODAY

Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.

BOOK A CALL WITH A CONSULTATION

JOIN THE COMMUNITY OF NORTHFIELD & ASSOCIATES

Connect with peers and community ambassadors to hear real experiences, tips, and advice about studying abroad.

EXPLORE NORTHFIELD & ASSOCIATES COMMUNITY

CANADA IMMIGRATION CONSULTANTS

Northfield & Associates is a Canadian consulting firm based in Toronto, Canada. Northfield & Associates specializes in all types of immigration matters, from spousal sponsorships to refugee board appeals. With over eight (8) years of experience and an excellent success rate, Northfield & Associates is recognized as one of Canada’s premier immigration consulting firm.

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FREE IMMIGRATION ASSESSMENT

The purpose of the Free Assessment is to assess whether you are qualified to apply for permanent residence in Canada under the Family Sponsorship, Skilled Worker, or Business Class categories. Please choose which category you would like to be assessed under and complete all fields in the form. We will endeavor to complete your assessment and provide you with a reply within one business day. There is no charge for this service. All information provided will be kept strictly confidential. If our assessment indicates that you are qualified for immigration to Canada, we will contact you to provide further information about our services and fees. Start Your Immigration Application!

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How can we assist you today?

Unlocking the Potential of Those Who Advance the World

Learn more about our core areas of expertise

About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

NORTHFIELD & ASSOCIATES in Canada

As a global consulting firm, Northfield & Associates helps clients with total transformation, driving complex change, enabling organizations to grow, and driving bottom-line impact.

 Learn about our offices in Canada, read our latest thought leadership, and connect with our team.

Learn More

Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Questions?

info@northfied.biz

Within Corporate Newsroom  

Media Contact:

media@northfied.biz

Press contact 

PR Secretary
press@northfied.biz

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.

Bookkeeping and Record Keeping for Registered Charities

Bookkeeping and record keeping are essential for registered charities to stay compliant with legal rules and maintain trust with donors.

You need to keep accurate financial records, track donations, expenses, and important documents to meet regulatory requirements and show transparency. This helps you manage your charity’s funds properly and avoid problems with tax authorities.

Your records should include details like donations received, how money is spent, board meeting minutes, and proof of your charity’s activities.

Good bookkeeping supports reporting to the government and helps you communicate your impact clearly to supporters.

Without careful record keeping, it becomes difficult to prove your charity’s work and financial health.

Core Bookkeeping and Record Keeping Requirements

Your registered charity must maintain clear and organized financial records to comply with legal rules.

These records include detailed documentation of income, expenses, and key organizational activities.

Keeping accurate books and records supports transparency and helps with audits or financial reviews.

Definition of Books and Records

Books and records are detailed documents that show all financial and administrative activities of your charity.

This includes your general ledger, which tracks all financial transactions like donations, grants, and expenses.

You must keep bank statements, receipts, invoices, and payroll records.

Meeting minutes and official organizational records are also part of your recordkeeping.

These documents prove how your charity manages funds and carries out its purpose.

Good bookkeeping tracks every dollar coming in and going out.

This ensures your charity’s financial health is clear and verifiable.

Importance of Accurate Record Keeping

Accurate record keeping is essential for your charity to prove compliance with tax laws and regulations.

It protects your organization during IRS examinations by providing clear evidence of income and expenses.

Well-maintained records help you prepare annual returns, like Form 990, and track unrelated business income if applicable.

Clear records also support financial transparency, helping your board and donors trust your management.

Poor record keeping increases risks like penalties, audit delays, or loss of tax-exempt status.

Detailed and organized records let you respond quickly and confidently to any financial questions.

Retention Periods for Documentation

You are required to keep your financial books and records for a specific time.

Usually, documents should be retained for at least 3 to 7 years depending on local laws and the IRS.

Important records to keep include your general ledger, bank statements, donor records, receipts, and meeting minutes.

You might need them longer if your charity is under audit or involved in legal matters.

Organize your files so you can access documents easily.

Keeping digital backups alongside paper copies protects your records from loss or damage.

Following retention rules helps you stay compliant and ready for reviews.

Legal and Regulatory Compliance for Charities

Your charity must follow specific laws and rules to keep its tax-exempt status and operate legally.

This means you need to file the proper forms, maintain key documents, and understand the risks if you fail to meet requirements.

Tax-Exempt Status and Reporting Obligations

To keep your tax-exempt status, you must operate according to rules set by tax authorities like the IRS in the U.S.

Your charity needs to have articles of incorporation and bylaws that outline your mission and governance structure.

You must track all income and expenses accurately.

This allows you to fill out forms such as Form 990 or Form 990-N (the electronic postcard) each year.

These reports explain your financial activities and prove you follow nonprofit rules.

If your charity earns income unrelated to its mission, you may have to file Form 990-T and pay tax on that income.

Proper record keeping ensures that you can support everything you report to the IRS.

IRS and CRA Filing Requirements

In the U.S., most tax-exempt charities must submit Form 990, 990-EZ, or 990-N annually to report their finances.

The IRS requires you to keep all records, including receipts, donations, and minutes from meetings.

This makes audits easier and keeps your organization transparent.

In Canada, the CRA has similar filing rules for registered charities.

You need to complete the T3010 Registered Charity Information Return and keep financial documents ready for inspection.

Missing or late filings can lead to penalties or loss of status.

Keeping accurate, up-to-date records and understanding what forms apply to your charity will help you meet these obligations confidently.

Consequences of Non-Compliance

Failing to meet legal filing and record-keeping rules risks losing your charity’s tax-exempt status.

The IRS or CRA can impose fines, penalties, or revoke registration, meaning your organization would owe taxes and lose credibility.

Non-compliance can also hurt donor trust and affect your ability to raise funds.

You might face audits requiring you to produce detailed books and records, which can be time-consuming and costly.

To avoid these consequences, stay organized with your financial records, file all required forms on time, and ensure your charity follows its governing documents and tax regulations at all times.

Nonprofit Bookkeeping Principles and Standards

You need to follow specific rules and guidelines to keep your nonprofit’s financial records clear and accurate.

These rules help you track income and expenses properly and report them in ways that meet legal and tax requirements.

Overview of GAAP and FASB Guidelines

Your nonprofit’s bookkeeping must follow Generally Accepted Accounting Principles (GAAP).

GAAP sets the foundation for how you record, report, and disclose financial information.

These guidelines ensure transparency and consistency in your financial statements.

The Financial Accounting Standards Board (FASB) creates detailed rules that build on GAAP specifically for nonprofits.

These rules guide how you should handle donations, grants, and fundraising income.

For example, you must distinguish between restricted and unrestricted funds and report them separately.

Using GAAP and FASB standards correctly helps you avoid mistakes that could lead to legal issues or lost tax-exempt status.

It also builds trust with donors and stakeholders by showing that you manage funds responsibly.

Differences Between Nonprofit and For-Profit Accounting

Your nonprofit’s accounting is different from a for-profit business in important ways.

Unlike for-profits, where the goal is profit maximization, nonprofits focus on how funds support your mission.

One key difference is in how you report income.

You must track donations and grants separately and show how these funds are used for programs or operations.

Profit-driven businesses focus mainly on sales and profits.

Also, your nonprofit must clearly report restrictions placed by donors.

For-profits don’t usually have these kinds of restrictions.

Your bookkeeping should reflect this by separating funds into categories like temporarily restricted or permanently restricted.

These differences mean you need to use bookkeeping methods designed for nonprofits to stay in compliance and maintain your tax-exempt status.

Fund Accounting and Financial Management

Understanding how to organize and manage your charity’s funds is essential for clear financial oversight and legal compliance.

You need to track money based on its purpose and ensure donors’ wishes are followed.

Good financial management protects your charity’s assets and supports informed decisions by your board.

Fund Accounting Structure

Fund accounting divides your charity’s money into separate “funds” to keep transactions clear.

Each fund represents a set of resources with a specific purpose or restriction.

You will typically work with:

• Restricted funds: Money given for a particular project or use.
• Unrestricted funds: Money available for general operations and expenses.

This system helps you show how every dollar is spent and keeps accounting transparent.

It aligns with your fiduciary duties by ensuring funds are used properly and reported accurately to your board and regulators.

Fund accounting also separates net assets based on restrictions, which is critical for audits and financial reports.

Managing Restricted and Unrestricted Funds

You must carefully track restricted funds to avoid misusing donations.

These funds require spending only as donors or grant agreements specify.

Mishandling them can harm trust and lead to compliance issues.

Unrestricted funds give you flexibility to cover your charity’s daily needs and unexpected costs.

Managing both types requires up-to-date records and regular reconciliation.

Your financial management should include:

• Coding transactions by fund type.
• Reporting separately on restricted and unrestricted funds.
• Communicating fund status clearly to your board of directors.

This level of detail helps your board fulfill their oversight role and protects your charity’s reputation.

It also ensures your financial statements truthfully reflect the state of your net assets.

Donation and Income Tracking

You need to keep detailed and accurate records of all donations and other income your charity receives.

This includes tracking cash gifts as well as non-cash contributions, and making sure donors receive proper acknowledgments for their support.

Tracking and Recording Donations

You must record every donation promptly and clearly.

For cash donations, note the amount, date, donor’s name, and payment method.

If donors give $5,000 or more, you must keep extra details to meet IRS requirements.

Organize donation data so you can easily report it on your annual tax forms.

This helps with transparency and donor trust.

Use a consistent system, whether a software tool or manual ledger, to track donations.

Keep your records updated and accurate to avoid issues during audits or financial reviews.

In-Kind Donations and Contribution Records

In-kind donations are gifts of goods or services rather than money.

You must value these fairly and record them with details like donor name, description of the gift, and estimated value.

Tracking in-kind donations is essential because you report this information on tax forms and use it when demonstrating your charity’s impact.

Make sure to get written confirmation from donors about their in-kind gifts.

This can protect your organization and provide proof during financial audits or government checks.

Donation Receipts and Acknowledgements

For every donation, you must provide a receipt or acknowledgement letter.

This should include the donor’s name, the donation amount or description of the gift, and the date received.

Receipts are important for donors to claim tax deductions.

They also show your charity is transparent and organized.

Make acknowledgements timely.

For cash gifts, send receipts soon after receiving the donation.

For in-kind gifts, include an estimated value or note that the donor is responsible for determining value for tax purposes.

Financial Reporting and Essential Statements

You need clear, accurate financial statements to track your charity’s money and show how well you manage resources.

These reports detail your assets, income, expenses, and cash movement.

They help you meet legal rules and build trust with donors and regulators.

Statement of Financial Position

The Statement of Financial Position shows what your charity owns and owes at a specific date.

It lists assets, liabilities, and net assets (or fund balance).

Assets include cash, donations receivable, and equipment.

Liabilities cover debts like unpaid bills or loans.

This statement helps you check your charity’s financial health.

You can see if your assets are enough to cover your liabilities.

Accurate records here are vital because this report is part of your annual filings to regulators and key for board decisions.

Statement of Activities

This is also called the income statement.

It tracks your charity’s revenues and expenses over a set time, like a year.

You report donations, grants, program income, and other earnings as revenues.

Expenses include program costs, salaries, fundraising, and management.

This statement shows if your charity runs at a surplus or a deficit.

It’s important to detail program expenses separately to prove that money is spent on your mission.

Clear reporting helps donors see how funds are used.

Statement of Cash Flows

This report details the flow of cash into and out of your charity.

It breaks down cash from operating activities, investing, and financing.

You use it to track if your charity generates enough cash to pay bills and continue programs.

Unlike the income statement, it focuses on actual money moving, not just accounting entries.

Maintaining a cash flow statement supports budgeting and planning.

It also reassures donors and regulators that your charity handles cash responsibly.

Preparation of Monthly and Annual Reports

You should prepare monthly reports to monitor ongoing finances.

These include summaries of income, expenses, and cash position.

Monthly reports help spot issues early.

Annual reports combine all financial statements and provide a full view of your charity’s year.

They usually include notes explaining key accounting methods and unusual entries.

Accurate, timely reports ensure compliance and improve transparency.

You may need them to file tax forms and funding applications.

Consider using accounting software or hiring experts to keep reports reliable.

Implementing Internal Controls and Best Practices

Setting up clear steps helps protect your charity’s money and keeps your records accurate.

You need strong checks, regular reviews of your bank statements, and the right tools to manage your finances efficiently.

Internal Controls and Fraud Prevention

Internal controls are rules and processes you put in place to stop mistakes and fraud.

You should divide financial tasks among different people.

For example, one person approves expenses while another handles payments.

This limits the chance any one person can misuse funds.

Always require dual approvals for large purchases.

Keep detailed records of all transactions to make it easy to track money.

Training your staff regularly on these rules makes sure everyone knows their role.

Bank Reconciliation Procedures

Bank reconciliations are important to compare your records with the bank’s records.

This ensures your books are accurate.

Perform these reconciliations monthly or quarterly.

Check every deposit, withdrawal, and fee listed by the bank against your records.

If you find differences, investigate right away.

Common issues could be outstanding checks or bank errors.

Choosing and Using Accounting Software

The right accounting software can make your bookkeeping easier and more secure.

Look for software designed for nonprofits.

It should offer features like tracking donations, managing budgets, and generating financial reports.

Cloud-based options give you real-time access and automatic backups.

Use software that supports bank reconciliations and has built-in controls for handling expenses and approvals.

Make sure your staff knows how to use the software properly to avoid data mistakes.

Regular updates and technical support are also important.

Conclusion

If you need expert help with your charity’s bookkeeping and record-keeping requirements, reach out to the specialists at Northfield & Associates. They understand all the CRA rules about what records to keep, how long to store them, and the best ways to organize your financial documents. Their team can help you set up proper systems from the start so you can focus on your charity’s mission instead of worrying about compliance issues.

Good bookkeeping isn’t just about following rules it protects your charitable status and keeps your organization running smoothly. The experts at Northfield & Associates work with charities across Canada to make financial management simple and stress-free. Whether you’re just starting a new charity or need help fixing existing record-keeping problems, they have the experience to guide you through every step.

Schedule your FREE consultation

Frequently Asked Questions

You need to keep detailed records, use appropriate bookkeeping tools, and follow the right accounting methods to manage your charity’s finances.

Understanding the legal standards and proper reporting will help you maintain compliance and transparency.

What are the record keeping requirements for charities?

You must keep minutes of all board and member meetings.

These should be stored as long as your charity exists and for two years after its status ends.

Donation receipts need to be kept for at least two years after the end of the year they were issued.

For gifts lasting ten years, keep receipts for two years after your charity loses its status.

Financial statements, ledgers, tax returns, and source documents must be kept for six years.

If your charitable status is revoked, keep these for two years after the revocation date.

What is the bookkeeping software for charities?

You should use software designed for nonprofit needs.

Many options track donations, grants, and expenses clearly.

Choose software that helps maintain compliance and generates reports for audits.

Cloud-based options offer easy access and data backup.

What is the best accounting method for nonprofit organizations?

Most charities use accrual accounting.

This method records income and expenses when they occur, not when money changes hands.

Accrual accounting provides a clearer picture of your charity’s financial health.

Some small nonprofits may use cash basis accounting if simpler tracking fits their work.

What is the accounting standard for charity?

Charities follow Generally Accepted Accounting Principles (GAAP) or similar nonprofit accounting standards in their country.

These standards ensure your financial records are accurate and comparable.

They require clear tracking of restricted and unrestricted funds.

What is the journal entry for charity?

When your charity receives a donation, debit the cash or bank account and credit donation income.

If a donation has restrictions, credit a separate restricted fund account.

When you spend from this fund, reverse these entries to track use properly.

What are the reporting requirements for charities?

You must prepare annual financial statements showing income, expenses, assets, and liabilities.

Submit tax returns and reports to government bodies.

Keep these documents accessible in case of audits.

Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian law and can help ensure your organization follows proper procedures.

Get professional support today

Email info@northfield.biz

Phone (416) 317-6806

Visit us https://www.northfield.biz/

 Appointment Schedule your free consultation 

To discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

READY FOR BETTER NONPROFIT REPORTING?

At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.

GET IN TOUCH

What We Do!

We’re often asked by prospective clients what our Bookkeeping service. People want to know what specific tasks we do, and what their responsibility is. This brief explainer page will answer that question. This is by no means an exhaustive list, but covers the most frequently asked questions.

Getting Started

• Review your existing books for needed corrections or back-work
• Chart of accounts setup or amendment
• Assistance with setting up bank feeds
• Limited assistance* with setting up payroll (QBO or Gusto only)
• Your books brought current and reconciled if needed

Ongoing Monthly Bookkeeping

• After-the-fact transaction recording
• Post to general ledger
• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

Book a Call

Contact us today to schedule your free consultation.

Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Contact us today to schedule your free consultation.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your free consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

• If you or anybody that you know, think that you meet the requirements and wish to receive further information.
• We can help you start the application process and confirm eligibility requirements to participate.
• We Offer Consultations & Meetings by Phone & Virtually. Affordable Fees.

BOOK A CONSULTATION TODAY

Contact Northfield & Associates today to schedule a consultation with an experienced Consultant.

BOOK A CALL WITH A CONSULTATION

JOIN THE COMMUNITY OF NORTHFIELD & ASSOCIATES

Connect with peers and community ambassadors to hear real experiences, tips, and advice about studying abroad.

EXPLORE NORTHFIELD & ASSOCIATES COMMUNITY

CANADA IMMIGRATION CONSULTANTS

Northfield & Associates is a Canadian consulting firm based in Toronto, Canada. Northfield & Associates specializes in all types of immigration matters, from spousal sponsorships to refugee board appeals. With over eight (8) years of experience and an excellent success rate, Northfield & Associates is recognized as one of Canada’s premier immigration consulting firm.

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The purpose of the Free Assessment is to assess whether you are qualified to apply for permanent residence in Canada under the Family Sponsorship, Skilled Worker, or Business Class categories. Please choose which category you would like to be assessed under and complete all fields in the form. We will endeavor to complete your assessment and provide you with a reply within one business day. There is no charge for this service. All information provided will be kept strictly confidential. If our assessment indicates that you are qualified for immigration to Canada, we will contact you to provide further information about our services and fees. Start Your Immigration Application!

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About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

NORTHFIELD & ASSOCIATES in Canada

As a global consulting firm, Northfield & Associates helps clients with total transformation, driving complex change, enabling organizations to grow, and driving bottom-line impact.

 Learn about our offices in Canada, read our latest thought leadership, and connect with our team.

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Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Questions?

info@northfied.biz

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Media Contact:

media@northfied.biz

Press contact 

PR consultants
press@northfied.biz

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.

Legal Guidelines for Fundraising Events for Canadian Charities

If you organize a charity fundraising event, you are not authorized to provide receipts for donations made on behalf of the charity. Only the charity has the authority to issue such receipts. Furthermore, providing its registration number for receipting purposes may cause a charity to lose its registration.

To provide receipts for a fundraising event or activity, it is essential to evaluate the worth of the advantages offered to all people involved. These advantages must be deducted from the gift total prior to being able to provide a receipt for the eligible sum. The process of establishing the eligible amount of a gift is known as split receipting.

“Intention to make a gift” threshold?

If the worth of the advantage gained exceeds 80% of the gift’s value, it is typically deemed that the intention to contribute the gift is not genuine, and a receipt may not be issued.

Understanding Charity Tax Receipt Authority

Who Can Issue Tax Receipts?

Only registered charities have the legal authority to issue official tax receipts for donations. As an event organizer, you cannot provide these receipts yourself, even when organizing events on behalf of a charity.

Critical Warning: Never share a charity’s registration number for receipting purposes. This serious mistake can cause the charity to lose its official registration status with the Canada Revenue Agency (CRA).

Split Receipting: Calculating Eligible Donation Amounts

Split receipting determines how much of each contribution qualifies for a tax receipt. You must evaluate and subtract all benefit values from the total donation amount before issuing receipts.

The 80% Gift Intention Rule

Canadian tax law requires genuine gift intention for all charitable donations. If benefits exceed 80% of the total donation value, the CRA considers the intention to make a gift as not genuine, and no tax receipt can be issued.

This threshold protects the integrity of charitable giving by ensuring donors make genuine contributions rather than purchasing goods or services.

Benefits That Must Be Deducted From Donations

Primary Event Benefits

These advantages form the main purpose of your fundraising event and must be subtracted from donation amounts:

Fundraising Dinners:

• Meal costs
• Entertainment value
• Venue access fees

Golf Tournaments:

• Green fees and course access
• Cart rental charges
• Meal and refreshment costs

General Events:

• Ticket value equivalent to similar commercial events
• Activity participation fees

Additional Benefits to Calculate

Unless the De Minimis rule applies, deduct these benefit values from gift amounts:

• Door prizes and giveaways
• Complimentary gifts (pens, keychains, branded items)
• Achievement prizes (closest-to-the-pin awards, contest winnings)

Benefits You Can Usually Ignore

Celebrity Appearances: The presence of celebrities at charity events typically doesn’t count as a taxable benefit. However, if you charge extra fees for exclusive access or activities with specific individuals, those amounts cannot qualify for tax receipts.

Minimal Odds Prizes: Golf tournament closest-to-the-pin prizes can be excluded since the CRA considers winning odds nominal.

Charity Auction Receipt Rules

Receipts for Donated Auction Items

Contributors who donate items for charity auctions can receive tax receipts based on fair market value at the time of donation. However:

• Fair market value must be clearly determinable
• Items may be subject to deemed fair market value rules
• No receipt can be issued if value cannot be established

Receipts for Auction Purchases

Auction buyers can receive tax receipts only when specific conditions are met:

• Fair market value must be calculated and disclosed to all bidders before the auction
• Winning bids must stay under 80% of the posted item value
• The purchase must meet genuine gift intention requirements

Pro Tip: Set minimum bids at 125% of fair market value to ensure receipt eligibility for winning bidders.

Want to learn about broader fundraising compliance beyond events? Read our full guide on Nonprofit Fundraising Rules and Guidelines in Canada.

Advantages that are the objective of the event

In order to calculate the eligible amount of a gift, it is necessary to deduct the value of any benefits provided from the total gift amount. Some examples of these advantages include:

• The cost of a meal provided at a fundraising dinner
• The price of green charges, cart rentals, and meals provided at a golf tournament
• A ticket price similar to that of a fundraising event.

Other advantages

To determine the eligible amount of a gift, the worth of any advantages must be deducted from the gift amount, unless the De Minimis rule is applicable. Some examples include:

• Door prizes
• Complimentary gifts such as pens and key chains
• Accomplishment prizes such as the closest-to-the-pin reward.

Note: The presence of celebrities at charity events is generally not deemed an advantage. However, if an extra fee is charged to participate in an activity (such as dinner or golf) with a specific individual, it cannot be regarded as a gift. Therefore, a receipt cannot be issued for the additional amount paid.

Auctions

Issuing receipts for donated auction items:

• A receipt may be given to the contributor for the item’s fair market value as of the moment it is contributed to the organization.
• The contributed item could potentially be subjected to the rule of deemed fair market value.
• In the event that the donated item’s fair market value is unable to be determined, a receipt may not be issued.

Providing receipts for auction acquisitions:

• The fair market value of the item must be calculated and disclosed to all individuals ahead of the auction for a receipt to be issued.
• The winning bid must not surpass 80% of the posted value of the item, as this would not meet the threshold for a genuine gift.

Tip: To fulfill the threshold for intending to make a gift, the organization can determine the minimum bid by multiplying the item’s fair market value by 125%.

Fundraising dinners

Here are some general guidelines and examples for valuing various items at fundraising events:

• Meals should be valued at the price that a comparable facility would charge for a similar meal. This can be based on the restaurant’s regular price, group or banquet rates, or similar factors.
• Complimentary items should be valued at their typical retail price.
• Door and achievement prizes should be valued based on their retail value, and the total value should be prorated per ticket sold.
• Entertainment should be valued at the typical and up-to-date ticket price.
• If raffle tickets are accounted for in the admission cost, the prizes will be considered as door prizes, and the value of the prizes must be included when calculating the amount of the advantage. However, if the raffle is performed separately, it will be deemed a lottery, and the cost of the raffle tickets will not be treated as a gift. The value of the different prizes that can be won should not be factored in when calculating the amount of the advantage.
• Generally, auctions at fundraising events are not considered an advantage.

Golf tournaments

Below are some general instructions and instances to assess the value of different items at golf events:

• The value of green fees for golf events is determined based on the standard cost charged to non-members using the course at the time of the event, whether it is an individual fee or a group fee. Members are not allocated an amount if they are not typically required to pay green fees.
• Cart rentals should be valued using their usual price.
• Meals are valued at the standard price charged for separate meal purchases at the course, either at the group or individual rate.
• Giveaways are valued at their typical retail cost.
• Door and accomplishment prizes are valued by their retail worth, totaled, and prorated per ticket sold.
• Closest-to-the-pin prizes can be excluded since the odds of winning are considered nominal by the CRA.
• Raffle tickets – If accounted for in the participation fee, the prizes are considered door prizes and are factored in to determine the sum of the advantage. Though, if the raffle is performed separately, it is deemed a lottery, and the price of the raffle tickets should not be treated as a gift. When calculating the amount of the advantage, you should not consider the value of the different prizes that could be won.

Note: According to the CRA, purchasing a lottery ticket is not considered a gift, and a receipt cannot be issued for the ticket’s cost.

How to Organize a Successful Charity Fundraising Event

Pre-Event Planning and Legal Compliance

Partner with Registered Charities Early: Establish clear agreements about receipt processing, registration number protection, and benefit calculation responsibilities.

Document Everything: Maintain detailed records of all costs, benefits, fair market values, and pricing decisions for CRA compliance.

Understand Your Limitations: Remember that you cannot issue tax receipts or share charity registration numbers under any circumstances.

Event Structure for Maximum Donations

Keep Benefit Costs Low: Design events where benefits represent less than 80% of ticket prices to ensure receipt eligibility.

Separate Premium Experiences: Offer high-value experiences as separate paid add-ons rather than including them in base ticket prices.

Strategic Auction Planning:

• Get professional appraisals for high-value donated items
• Display fair market values prominently before bidding begins
• Set minimum bids at 125% of fair market value

Handle Raffles Properly: Separate raffle sales from main event admission to avoid benefit calculation complications.

Working Successfully with Charities

Before Event Planning:

• Understand their specific receipt policies
• Confirm their compliance procedures
• Align event goals with their mission

During Event Planning:

• Provide clear benefit calculations for their review
• Respect their authority over tax receipt decisions
• Keep them informed of all cost and pricing changes

After the Event:

• Supply detailed financial records promptly
• Let them handle all receipt processing
• Support their follow-up donor communications

Common Compliance Mistakes to Avoid

• Never issue receipts yourself – only charities have this legal authority
• Never share charity registration numbers with vendors, venues, or participants
• Don’t ignore benefit values when calculating eligible donation amounts
• Don’t treat lottery tickets as donations – they cannot receive tax receipts
• Don’t exceed the 80% benefit threshold when setting ticket prices
• Don’t assume celebrity presence adds benefit value unless charging premium access fees

Maximizing Charitable Impact

Smart Pricing Strategies:

1. Set ticket prices where benefits stay well under 80% of total cost
2. Offer multiple giving levels with different benefit packages
3. Provide “donation only” options with minimal or no benefits
4. Create VIP experiences as separate premium purchases

Donor Communication:

1. Clearly explain what portions of payments qualify for receipts
2. Provide benefit breakdowns in advance
3. Help donors understand the 80% rule implications
4. Facilitate direct donation opportunities beyond event participation

Long-term Relationship Building:

1. Create annual events that build donor loyalty
2. Develop corporate sponsorship packages with clear benefit structures
3. Establish donor recognition programs that comply with benefit rules
4. Build databases that respect privacy while enabling future fundraising

Conclusion

Successful charity fundraising events balance generous giving opportunities with strict compliance requirements. Focus on creating meaningful experiences while keeping benefit costs reasonable, and always work closely with registered charities to ensure proper receipt handling.

By understanding split receipting rules, the 80% gift intention threshold, and proper benefit valuation methods, you can organize events that maximize charitable contributions while maintaining full CRA compliance.

Remember: your role is event organization and donor engagement – leave tax receipt processing to the registered charities who have the legal authority and expertise to handle these critical responsibilities properly.

Need Expert Guidance on Charity Fundraising Compliance?

Navigating charity law and fundraising regulations can be complex. If you’re planning a fundraising event or need clarity on tax receipt requirements, the experienced team at Northfield & Associates is here to help. We specialize in Canadian charity law and can guide you through every aspect of compliant fundraising.

At Northfield & Associates our expert teams guidance on compliance requirements. Our team understands Canadian charity law and can help ensure your organisation follows proper procedures.

Get professional support today by email at info@northfield.biz, by phone at (416) 317-6806, or visit us or Schedule your free consultation to discuss your specific circumstances and receive expert assistance throughout the reinstatement process with our experienced legal team.

Frequently Asked Questions

Here are quick answers to the most common questions about organizing charity fundraising events and understanding Canadian compliance requirements.

How do you organize a fundraising event for charity?

Partner with a registered charity and keep benefit costs under 80% of ticket prices for tax receipt eligibility. Calculate all benefit values (meals, entertainment, prizes), set appropriate ticket prices, and document everything carefully. Only the charity can issue tax receipts – never provide these yourself or share their registration number.

What are the rules of fundraising?

Follow the 80% gift intention rule – if benefits exceed 80% of donation value, no tax receipt is allowed. Calculate and subtract all benefits through split receipting. Only registered charities issue tax receipts, organizers cannot share registration numbers, and fair market values must be disclosed for auction items before bidding.

What is the difference between fundraising and donations?

Donations are direct gifts with no benefits, allowing full tax receipts. Fundraising provides benefits, so only the amount above benefit value qualifies for receipts. A $100 dinner with $30 meal value creates a $70 tax-deductible donation. Fundraising requires benefit calculations while direct donations don’t.

How does charity fundraising work?

Events generate revenue while providing benefits to participants. Calculate fair market values of all benefits and subtract from participant payments. The remaining amount qualifies as tax-deductible if it exceeds 20% of total payment. The charity issues receipts and handles compliance while organizers manage event planning.

Ready for better nonprofit reporting?

At Northfield & Associates, we have a team of professional bookkeepers and accountants to help your organization manage the books so that you can breeze through tax season.

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What We Do!

We’re often asked by prospective clients what our Bookkeeping Service covers?  People want to know what specific tasks we do, and what their responsibility is.  This brief explainer page will answer that question.  This is by no means an exhaustive list, but covers the most frequently asked questions.

Getting Started

• Review your existing books for needed corrections or back-work
• Chart of accounts setup or amendment
• Assistance with setting up bank feeds
• Limited assistance* with setting up payroll (QBO or Gusto only)
• Your books brought current and reconciled if needed

Ongoing Monthly Bookkeeping

• After-the-fact transaction recording
• Post to general ledger
• Post to other ledgers (as needed)
• Bank account reconciliation
• Monthly financial statements
• Other bookkeeping services, as required
• Best-practice bookkeeping advice and counsel

Year End

• Assistance with 1099-NEC preparation*
• Assistance with 1099-MISC preparation*
• Year-end financial statements and period-end closing

What We Don’t Do

Pay bills

We do not offer bill-pay services at this time, nor do we manage Accounts Payable (AP) or Accounts Receivable (AR).

Payroll tax responsibility

Our bookkeepers can assist you in setting up your initial payroll service in QBO or Gusto. We are not responsible for entering payroll hours/salary, accruing payroll taxes, nor the transmittal of payroll taxes to the IRS or the state.  Your full-service payroll provider (QBO, Gusto, or whatever other service a client uses) will be the responsible party for payroll and payroll tax compliance.

*Payroll deductions and benefits

We provide assistance with setting up a payroll account in either Quickbooks Online or Gusto, including entry of employee data.  We do not assist in state registrations, benefits, or advise on deductions.  Those service areas are provided directly by either QBO or Gusto.

Preparation of W2s

Similar to the last item, your full-service payroll provider (QBO/Gusto) is responsible for preparation of Form W2 for employees.

Sales tax reporting

For those nonprofits that sell taxable goods and/or services, your bookkeeper will assist in accounting for sales taxes collected and transmitted, but we do not prepare state sales tax reports.

Donation recording

We do not provide individual donation data entry into your neither your donor CRM nor Quickbooks Online, nor do we prepare year-end donor acknowledgements.

Administrative tasks

We cannot provide administrative services unrelated to our bookkeeping function.

Attend board meetings

Due to the constraints of time and distance, we are unable to be present, physically nor virtually, at a meeting of a client’s board of directors.*May incur additional fee per 1099-NEC or 1099-MISC.

Let’s Collaborate & Make a Difference!

Partner with us to amplify your mission. Whether it’s Charity accounting, financial transparency, or strategic growth—we’re here to help you create meaningful impact. Let’s work together to build a better future!

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Working with Our Firm

In this evolving economic landscape, collaboration with our firm offers clients a strategic advantage. With Cambodia’s reform-driven investment environment and Canada’s expanding footprint in Southeast Asia, our team of experienced consultants and legal advisors provides tailored guidance to help businesses navigate cross-border opportunities. We focus in developing comprehensive legal strategies, structuring international partnerships, and ensuring compliance in emerging markets.

By leveraging our regional insight and international expertise, you benefit from a trusted partner dedicated to helping you capitalize on growth potential in Cambodia and beyond.

Book a Consultation with Northfield & Associates

Your Trusted Partner in International Bilateral Relations

At Northfield & Associates are focus in Foreign Direct Investment (FDI), international trade missions, and cross-border legal strategy. Our team of experienced consultants and legal advisors offers tailored guidance and strategic insight to help you navigate the complexities of international partnerships and development opportunities.

Whether you choose to meet in person at one of our offices or connect virtually, we provide flexible and accessible consultation options. During your session, we’ll assess your goals, review key documentation, and guide you through every stage of your FDI or trade mission engagement.

Let us help you take the next step with confidence supported by trusted legal and strategic counsel every step of the way.

Northfield & Associates

Advancing Global Partnerships, Together.

Take the First Step Today

If you believe you may be eligible for legal relief or simply need sound legal advice, we’re here to help. Contact us today to book your consultation. Let us provide the clarity, strategy, and peace of mind you need to move forward.

Disclaimer: The information contained in this article is provided for general information purposes only and does not constitute legal or other professional advice. Readers should seek tailored legal advice in relation to their personal circumstances.

We serve our clients in English, Cambodian, Vietnamese, Mandarin and Cantonese, especially in Asian clients.

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• We can help you start the application process and confirm eligibility requirements to participate.
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About Northfield

Northfield & Associates International Corporation is a global consulting firm serving private enterprises, public institutions, not-for-profit organizations, and institutional capital providers. Operating across Cambodia, Canada, and global markets, the firm supports capital deployment, regulatory navigation, and enterprise decision-making in complex economic and geopolitical environments. Northfield & Associates delivers customized, execution-focused advisory solutions that drive measurable transformation, strengthen competitiveness, and enhance long-term highest value opportunities. The firm incorporates consulting, legal, regulatory, financial, and risk expertise to enable disciplined capital allocation, strong governance, and operational resilience. Northfield & Associates upholds a culture of applied insight and innovation, supporting clients across digital transformation, growth strategy, and organizational capability building. The firm advises individual, leading global corporations, midsize enterprises, government agencies, and mission-driven organizations through long-term partnerships. Enterprise-wide risk management, professional ethics, and fiduciary standards are embedded across all operations. Northfield & Associates’ diverse, globally unified teams are committed to execution certainty and sustainable, risk-adjusted returns aligned with ESG and stakeholder objectives.

Forward-Looking Information

This news release contains forward-looking information. All statements, other than statements of historic fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future constitute forward-looking information.

This forward-looking information reflects the current expectations or beliefs of the Company based on information currently available to the Company.

Forward-looking information is subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking information, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: the failure to finalize negotiations concerning the increase of the Loan or to close such transaction and the failure of the Company to complete the acquisition of the Company Facility; operating performance of facilities; environmental and safety risks; delays in obtaining or failure to obtain necessary permits and approvals from government authorities; unavailability of plant, equipment or labour; inability to retain key management and personnel; changes to regulations or policies affecting the Company’s activities; and the other risks disclosed under the heading “Risk Factors” and elsewhere in the Company’s amended annual information.

Forward-looking information speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking information, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking information are reasonable, forward-looking information is not a guarantee of future performance and accordingly undue reliance should not be put on such information due to the inherent uncertainty therein.

Questions?

info@northfied.biz

Within Corporate Newsroom  

Media Contact:

media@northfied.biz

Press contact 

PR consultants
press@northfied.biz

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Northfield & Associates professionals will be pleased to discuss resolutions to specific legal concerns you may have.