PLEA gratefully acknowledges our primary core funder the Law Foundation of Saskatchewan for their continuing and generous support of our organization.
Registered charities have advantages such as being able to issue donation receipts that can be used for tax deductions and not having to pay income tax. The Charities Directorate of the Canada Revenue Agency monitors registered charities to make sure they are living up their obligations.
The Directorate assists charities in understanding and meeting their obligations by providing online information for charities. They also have representatives who can answer question over the phone or in writing.
Failing to live up to any of the obligations of a registered charity can result in the Charities Directorate taking action. Activities that could result in penalties include lending a registration number, not keeping adequate books and records or issuing donation receipts with inaccurate or missing information.
After the audit the Charities Directorate will either notify the charity in writing that there will no action taken or that there are concerns. If there are concerns these will be explained in detail as well as the Charities Directorate’s preliminary views on what steps need to be taken. If there are concerns the charity will been given 30 days to reply to the concerns before a final decision is made.
One way the Charities Directorate checks to see if registered charities are living up to their obligations is by doing audits. Charities can be selected randomly for audits or a charity can be audited, for example, because there have been complaints from the public, issues raised in the media, or concerns with information that has been provided in a return.
Audits can be completed at the Charities Directorate using the information and documents in the charity’s file. Some audits are conducted in the field and take place at the charity’s premises. Here they look at the charity’s books and records, interview directors and ask questions about the charity’s activities. They may also tour the premises to see the charity’s programs and activities in action.
If the Charities Directorate finds that a registered charity is not meeting its obligations they can take steps to correct the situation. They can provide the charity with educational letters about what the charity needs to do or enter into an agreement in which the charity agrees to correct the situation. They can also impose sanctions and, in serious, cases revoke a charity’s registration.
Short of revoking a charity’s registered status, a charity can be required to pay a financial penalty and/or have their ability to issue donation receipts suspended. For example, if donation receipts do not have all the required information the charity must pay a penalty of 5% of the amount donated. If the charity is not keeping adequate books and records the charity’s ability to issue donation receipts can be suspended. Some activities such as issuing a donation receipt with false information result in a suspension of receipting privileges and a higher financial penalty of 125% of the amount of the donations in question. Penalties increase in severity if there are repeated infractions.
PLEA offers free online training on preventing and addressing workplace harassment.