Comprehensive Guide to Effective Record Keeping for Charity

In the realm of charitable organizations, meticulous record-keeping is not just good practice; it's a legal obligation. Understanding the nuances of how long records must be retained, the format in which they can be stored, and the consequences of improper maintenance is crucial for any responsible charity. In this blog post, we delve into the intricacies of charity record keeping, providing insights and guidelines to help your organization stay compliant.

How Long Must Records Be Retained?

1. Official Donation Receipts: Must be kept for a minimum of two years from the end of the calendar year in which the donations were made.

2. 10-Year Gifts: Should be retained throughout the charity's registration period and for at least two years following the revocation of registration.

3. Minutes of Meetings: Directors/Trustees/Executives: For as long as the charity is registered and a minimum of two years post-revocation.

4. Members: Must be kept for as long as the charity is registered and for a minimum of two years post-revocation.

5. Governing Documents and Bylaws: Must be held for as long as the charity is registered and for two years after the date of revocation.

6. General Ledgers and Financial Statements:

• General ledgers: Six years from the end of the last tax year.
• Financial statements and source documents: Six years from the end of the last tax year or two years post-revocation.

Electronic Record Keeping:

• Yes, electronic records are permissible, but they must adhere to the same rules and retention periods.
• Electronic records must be kept in a format accessible and usable by auditors on CRA equipment.
• Proper imaging practices for scanned documents in electronic format are acceptable.

Responsibilities for Proper Maintenance:

• The charity is responsible for all record-keeping requirements even when outsourcing to third parties.
• Keep all books and records in one accessible area for ease of reference during audits or board transitions.
• Maintain backup copies of records in a separate location, preferably off-site.
• Be prepared to make records available to CRA officials for inspection, audit, or examination.

Consequences of Improper Record Keeping:

Failure to meet record-keeping obligations can result in serious consequences, including the suspension of tax receipting privileges or loss of registered status.

In conclusion, a robust record-keeping system is not just a regulatory obligation; it's a fundamental aspect of running a responsible and transparent charitable organization. By adhering to these guidelines, your charity can ensure compliance, maintain accountability, and build trust with stakeholders. For additional information, refer to IC05-1R1, Electronic Record Keeping. Stay organized, stay compliant, and continue making a positive impact on the world.