The work that charities do is extremely important to our society, so it is vital that various stakeholders, such as the public, the media, the government, donors, employees, boards, and others have access to key information on what the charity is doing and how it is doing it. In general transparency will ultimately increase public trust and confidence in the sector by making the public more informed about the work of charities and making it more difficult for people to misuse charities.

However, from a legal perspective registered charities have few requirements in terms of transparency.  Registered charities must file a T3010 Registered Charity Information Return with a financial statement and various schedules with the CRA every year. If a charity is a corporation they may have to provide a basic corporate filing.  

Most charities have worked out that this basic level of transparency may be what is legally required but it falls far short of what stakeholders require.   Many charities go far beyond the legal requirement and establish websites, have newsletters or blogs and perhaps use social media to provide information to their stakeholders.  These communication tools are not used annually but frequently.  

Here are my top 10 simple suggestions for improving transparency:

1) Make sure that your T3010 that you filed is accurate, not just filed on time.   There is no point talking about good ideas for transparency if you are not getting your T3010 done correctly which is the basic legal transparency requirement. 

2)  Place a link to the CRA Charities Listing for people to verify that you are a registered charity and they can easily find the content of your T3010 filings.

3) As the CRA Charities Listing is very difficult to navigate for many people consider placing a link to your charity's page on www.charitydata.ca - this website prepared by our law firm provides up to 10 years’ information on each Canadian registered charity in a more accessible format than the CRA site.

4) Make sure that a number of years financial statements are on your website, if you have been around for that long. Tremendous work has already gone into preparing your financial statements and it should not take more than 15 minutes to upload them to your website.  Also if you have audited financial statements ensure that those that are posted on your website are audited and not the unaudited versions.  Yes it is true that the financial statements can be obtained from the CRA by a donor but that can take weeks.  It is disrespectful to donors and other stakeholders that you are making them work so hard to obtain this information when it could be so easily provided.  

5) It is advisable to place an updated copy of the list of your board of directors and officers on your website and also information on your senior leadership team.

6) Place your constating documents (eg. articles of incorporation and by-laws) on your website can be helpful.  I know that many organizations put up their mission statement but that is not the same thing as your legal objects.  Simply placing the governance documents may not explain your governance structure and you might want to also provide an explanation.

7) If you are ever requesting restricted funds consider what your organization would do if the restricted funds cannot be used for the purposes stated or there is too much or too little money raised.  Place your policy (which could be a paragraph long) on your website. If you happen to have a gift acceptance policy that could be posted as well. 

8) Provide information suggested by the CRA in their fundraising guidance if you fundraise, such as a reserve policy if you have a substantial reserve and information on fundraising costs and practices.

9) If it would be helpful to explain any of the above documents (such as a deficit or windfall in a financial statement or seemingly high salaries) then put in an explanation.

10) Some other ideas of documents that may be helpful include strategic plans, annual reports (if you still do them), and report on impacts if you have them. 

If you have not just a registered charity but also affiliated non-profits and for-profits it is even more important that you have great transparency and separation between the different entities or there may be concerns that the charity is being used inappropriately.

Also you can ask yourself what documents do we have that it would be helpful to explain our mission by providing?  Also what questions do we frequently get and providing information could reduce the number of questions?

The key with transparency is balance. It is not about dumping more and more documents onto your website – if is about providing timely, accessible and understandable information to explain to stakeholders how your charity works and the good works of your charity.

I hope these suggestions are helpful.  The public is increasingly expecting that charities will provide information on their organizations and charities are moving quickly to provide that information.  

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.