There are two checklists designed to support the presentation Good Governance: Legal and Ethical Compliance for Charity Boards. The Board Checklist focuses on the important oversight role that ensures the right policies, mechanisms and systems are in place to effectively safeguard Canadian registered charities. The chief executive’s checklist provides more detail so that your staff can develop and implement your organization’s compliance priorities.

To begin, watch the presentation to acquaint yourself with all the requirements. Then the leadership team (board and chief executive) should review the status of your own charity, identify areas that need action and make it a governance priority to resolve each outstanding item. Be patient. Start with your top legal priorities and keep updates on your board agenda until you have worked through the checklist. When discussing the questions below, be sure there is evidence to support the response. For example, the board might ask: how do we know this is true and/or what process is in place to ensure it will remain true and up to date? Keep in mind, the staff is responsible for implementation (hence more detail and resources in that checklist) and the board provides oversight.

Use this checklist annually (and date each one)to review your progress and ensure your charity continues to meet its legal and ethical obligations.

SUMMARY OF THE KEY COMPLIANCE REQUIREMENTS

Properly file CRA’s T3010 and other mandatory forms

Conduct allowable charitable activities within the organization’s legal objects and subject to its governing documents

Safeguard the physical assets and financial resources

Keep accurate books and records

Properly issue receipts for donations

Protect volunteers, staff and those served

Enforce a conflict of interest policy and adopt a code of ethical behavior

Follow CRA’s fundraising guidance and be aware of ethical codes

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Good Governance – Legal and Ethical Compliance for Charity Boards – Board Checklist

Done / In Progress / Needs Action / Action to be Taken or Comments
1. Properly File CRA’s T3010 and Other Mandatory Forms
Did we file our T3010 within six months of our fiscal year end?
What checks and balances are in place to ensure that the information in the T3010 is accurate and complete?
Are we regularly advising CRA of any changes in the organization, such as a change in address or key directions?
Have we made the necessary filings that are required to maintain our corporate status as a legal entity, such as an annual corporate return or summary?
2. Conduct Allowable Charitable Activities that are Within the Organization’s Legal Objects and Subject to its Incorporating Documents and By-laws
Are we clear about what is a CRA allowable charitable activity?
Are we confident that we are devoting our resources (funds, personnel and property) to CRA’s allowable charitable activities?
If our charity is transferring funds to non-qualified donees, like foreign charities or non-registered Canadian charities, do we have adequate direction and control?
If our charity has an endowment, reserve fund or other assets worth over $100,000 not being used for charitable activities, are we spending 3.5% of the total investment annually on our activities or disbursing the funds to another qualified donee?
Is each board member familiar with the legal objects described in our founding documents and the key components of our by-laws, resolutions and other binding agreements?
Does our mission, values, goals, activities and stakeholder relationships fall with the scope of our legal objects and do they comply with our governing documents?
If they fall outside the scope or don’t comply, have we changed actions or modified our legal objects or other documents?
3. Safeguard the Organization’s Physical Assets and Finances
Do we generate regular financial information that is current, accurate, comprehensive and available to the board and management team?
Do we select and hire the right auditors that provide an objective external perspective?
Does each board member understand the financial information that is presented, including the audited statements? Are board members comfortable asking for an explanation when it isn’t clear and challenging the assumptions behind the information?
Has the board identified the key financial metrics that it will monitor? Do these effectively alert the board to changes and trends in the financial situation of the organization?
Does the management have a financial monitoring system that allows it to effectively manage the resources and identify areas of concern and opportunity?
Do we have adequate internal controls, such as segregation of duties, which protect the organization from waste, misuse, fraud, theft and other actions that can threaten our reputation and legal status?
Are the controls articulated in clear and updated policies and procedures?
Do we have a process in place to evaluate the internal controls to ensure they continue to work effectively?
Have we done a thorough asset and financial risk management assessment to identify potential risk, estimating the likelihood of occurrence within acceptable levels we are prepared to take?
Have we developed clear and concise policies and procedures to cover all areas of significant risk to our physical assets and finances?
Are those policies and procedures regularly reviewed/updated?
Do board, other volunteers and staff have easy access to those risk management policies that affect them?
Are we confident that the policies and procedures are being enforced?
Do we have a system in place to stay informed about changes and events that may impact our risk to our physical assets and finances?
Do we have adequate insurance to protect our assets and finances and is it kept current?
4. Keep Accurate Books and Records
Are our records and books, including founding documents, bylaws, minutes, report and financial records, kept current, accessible, complete and safe?
If CRA or other stakeholders were to review our books and records, could they verify that our charity’s revenues, including donations, have been received and that our expenditures are directed to allowable charitable activities? Do we have a reliable and transparent paper trail?
Do board and member’s meetings have agendas and are minutes kept together and signed? Do they accurately reflect the resolutions passed and action items?
5. Properly Issue Receipts for Donations
Is there a system in place to ensure that we are only issuing receipts for eligible in kind or cash gifts? Do we understand when registered charities can’t issue tax receipts?
Are we following the CRA guidelines to ensure that receipts include all the mandatory elements and amounts are properly valued?
Do we have a system in place to ensure that our blank official tax receipts are numbered and protected from wrongful access?
If we issue split receipts, do we accurately determine the eligible amount allowed?
6. Protect Volunteers, Staff and Those Served by the Charity
Do we have policies and agreements that safeguard the rights and well-being of our board, other volunteers, staff and those we serve (e.g. confidentiality, safe environment, job descriptions, human rights, contractor agreements, compensation and benefits)?
Have we done an assessment to determine potential risk to all volunteers, staff and those we serve, estimating the likelihood of occurrence within acceptable levels we are prepared to take?
Do our policies and procedures adequately address all significant risk areas?
Are our policies and procedures regularly reviewed and updated?
Do board, other volunteers and staff have easy access to those human resource policies and procedures that affect them?
Are we compliant with relevant legislation related to human resources? Do we have a system in place to ensure that we stay informed about changes and events that may impact our policies or increase our risk?
Do we have adequate insurance in place and is it kept current?
Are the appropriate source reductions being remitted to CRA?
7. Enforce a Conflict of Interest Policy and Adopt a Code of Ethical Behaviour
Do we have a policy and procedures to effectively handle conflicts of interest and avoid or mitigate liability and reputational risk?
Do our policy and procedures promote openness and transparency throughout the whole organization and to our stakeholders?
Are our policy and procedures reviewed every 3 to 5 years to ensure they remain relevant?
Do we have sensible mechanisms for complying with the policy and procedures?
Are we confident that volunteers and staff are informed of, and comply with, the policy and procedures?
Is there a written description of the expected ethical behavior of our volunteers and staff?
8. Follow CRA’s Fundraising Guidance and be aware of Ethical Fundraising Codes
Have we reviewed the CRA Fundraising Guidance and its directives?
Are we confident that our fundraising meets the CRA Guidance?
Are our ratios of fundraising costs to revenues in line with CRA expectations?
Is the board kept appraised of any changes in the CRA Fundraising Guidance?
Are we familiar with the key standards in voluntary codes, such as the IMAGINE Canada Ethical Fundraising and Financial Accountability Code?
If we have adopted any of the codes, do we have confidence that we are abiding by them?
If our a staff members belong to a professional association with a code of conduct, are we confident that he/she is abiding by them?

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Good Governance – Legal and Ethical Compliance for Charity Boards - Board Checklist