As you may know, the T3010 Registered Charity Information Return form is filed by every Canadian registered charity every year within 6 months of the end of the charity’s fiscal year, this form is increasingly being used by funders, donors, regulators and others. For example, there have been a number of recent stories in the media which have made use of the information captured in the T3010 and I will discuss two of those stories in this article.
The great thing about the T3010 is that it is an annual “census” of the charity sector. You can look at information on one charity or on all Canadian registered charities.
The T3010 form is in some ways complicated. After all, we have a very diverse 86,000 charities with over $240 billion in revenue. Understanding the T3010 requires an understanding of not only the form but the charity sector. Just like any complicated tool, it is only as useful as the questions being posed and the person using the tool. The T3010 can tell you a lot about a charity, but there is also a lot it does not tell you.
One cannot rely on the T3010 and/or financial statements to tell you about the worthiness of a particular charity. At best, the T3010 and financial statements can only tell you a small part of the picture and give you ideas for questions to ask. I think an analogy would be that you probably cannot rely on a swimming lesson report card to tell you everything you need to know about your child. It certainly will tell you some things, but probably is not determinative of others.
Focusing in on only a small number of statistics or metrics from the many pieces of information included in the T3010 and financial statements makes the problem even worse.
Also, there are many questions that could be asked on the T3010 that could add greater understanding of the charity sector. For example, I find it interesting that the T3010 does not have even one question on how many volunteers the organization has and what amount of time or value they contribute to the charity.
The Globe and Mail on March 15, 2017 had an article entitled “Canadian veterans' charities: Do you know where your donor dollars are going?”. As one can expect the headline is more sensational than the actual article. The article compares a number of veteran’s charities. The article is relies heavily on the T3010 information, perhaps too heavily.
The article seems to confuse at times money spent on salaries with money spent on administration.Paying a person to do a charitable program is a charitable expense and not administration.
The article notes “Like all charities, those veterans’ groups have administrative costs which Revenue Canada requires to be posted online. But different reporting methods used by the various organizations make it difficult to determine just how much is being spent on operations and how much is going to the veterans themselves.”
Is there a dichotomy between “operations” versus “going to the veterans themselves”? By operations does it mean administration or overhead? I presume that hiring psychiatrists (who might be paid a salary) to help soldiers with PTSD is not money going to the veterans themselves but perhaps it is charitable and a good way to spend money.
The article does raise some good points including how can a major charity report no fundraising and administrative costs. While it is possibly accurate, I find that in most cases if significant charities don’t have fundraising or administrative costs then they are completing the form incorrectly.
Another problem when trying to work out ‘where are your dollars going’ is when one looks at one particular year and do not do a multi-year analysis. Not sure if it would have made much of a difference in this case but with many charities, especially those that are newer and rely on fundraising revenue, there may be tremendous fluctuations from year to year.
We have developed a free website with up to 13 years’ information on each Canadian charity taken from the T3010 data. The website is located at www.charitydata.ca. Many people find it much easier to use than the CRA Charities Listing.
The second media story, also on March 15, 2017, was from the CBC entitled "SARBC 'extremely shocked' over North Shore Rescue fundraising lawsuit". It deals with allegations of one charity that another charity is inappropriately using its name to deceptively fundraise. That matter is being litigated and presumably more information will come out in the future.
The CBC uses the T3010 more by way of background. The CBC notes “SARBC is also a registered charity. According to CRA documents, it raised $159,021 through phone solicitation last year while paying $43,471 to the company it hired to do the calling. Older tax returns show that in some years SARBC has raised $200,000 through phone solicitation. It also claims over $1 million in assets.” I think that this is probably a more appropriate use of the T3010.
Remember that it is important for charities to file their T3010 on time AND very important that it is accurate. The T3010 information may or may not be utilized by the media correctly but if your filings are incorrect then you are going to have to fight an even more difficult uphill battle.
Mark Blumberg is a lawyer at Blumberg Segal LLP in Toronto, Ontario. He can be contacted at mark@blumbergs.ca To find out more about legal services that Blumbergs provides to Canadian charities and non-profits please visit www.canadiancharitylaw.ca www.globalphilanthropy.ca or www.charitydata.ca
This article is for information purposes only. It is not intended to be legal advice. You should not act or abstain from acting based upon such information without first consulting a legal professional.
