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Frustrated in doing good?


July 16, 2010
-Dan Dyck

Calgary, Alta.  Canada’s tax rules and even a congregation’s own bylaws and constitution can create obstacles for charitable organizations who want to do good but experience frustration in trying to follow all the rules. The Canadian Revenue Agency (CRA) states that, a Canadian registered charity, regardless of the source of the income, must use these funds for charitable purposes only.

“A registered charity cannot decide to raise funds and side-step their books, and not report on certain funds in their annual T3010 information return. Therefore, if members of your church are passionate about supporting a cause that is beyond Canadian borders and you do not have the appropriate agreements, controls and reporting mechanisms in place, individuals or group of individuals can only support the cause privately and not through or with the participation of the church and without receiving a tax deductible donation receipt,” said Randy Wiebe, Chief Financial Officer for Mennonite Church Canada.

Registered charitable organizations must be able to prove to CRA “end use control” of money gifted to another organization outside of Canada – and show that the funds the recipient agency received were actually used for whatever purpose the Canadian charity intended.

Approximately 15 participants asked many detailed questions about their own congregational financial practices: can I give a charitable receipt to someone who paid $150 for an auctioned pie? Do I need to complete a T-4 slip when our congregation pays an honorarium to a speaker? How do we handle gifts to members from our benevolent fund? Leaders emphasized the importance of filing CRA’s Form T-3010 as required by Canada’s tax laws, and not engaging in illegal activities – even unknowingly.

Citing examples, Norm Dyck, Executive Secretary of  the newly created Church Engagement department, noted that “consequences of not filing a T-3010 can result in losing your chartable status. It is a much more rigorous process to reregister a charity than it was to obtain its charitable status for the first time.”

Wiebe offered himself and his finance staff to help guide church treasurers through complex CRA processes, and point them toward resources available from the Canadian Council of Christian Charities.

“Our overall message,” said Dyck, “Is that we are here to help you.”