The CBC recently wrote an article entitled “Iris Kirby House fundraising foundation refiles public charity disclosure documents to fix errors”.  The article covered a registered charity and the mistakes in its T3010 Registered Charity Information Return filings.   It is not often that such a lengthy article is written on a charity and inaccurate financial statements/T3010 filings that I thought I should blog about it. I am only focusing here on the T3010 problems and the response of the charity to the T3010 problems, and not any of the other substantive allegations by supporters or detractors of the charity.

This article highlights the importance of the T3010 for registered charities and the public.  You don’t want a media organization looking at your T3010 filings and arguing that the charity has been deliberately deceptive or carelessly filing the T3010.  The T3010 is a mandatory filing, along with the financial statements of a charity every year.  The T3010 and financial statements are the minimum transparency required and most charities provide more information to the public on websites, newsletters, social media, donor reports, etc.

Here are some quick lessons that can be learned from the article:

1) be careful when filing your T3010 to ensure that it is as accurate as possible;

2) an inaccurate T3010 may be viewed by the media as being deceptive to donors and the public;

3) “While the foundation sent the form listing its T3010 changes to CBC News, it declined to provide audited financial statements it also sent to the feds.” If your regisered charity has financial statements and refuses to disclose them then the public/media will probably consider your refusal to provide them as some sort of indication that the charity is hiding something.   Yes they can be obtained by the public/media from the CRA but with any substantial charity they should not force them to contact the CRA.  In most cases organizations that have a website should seriously considering placing 3-5 years financial statements on their website so that the media do not have to even ask for the documents. As one reporter once told me – if there are  major issues with a charity and they are disclosed in a public way such as the charity's website then it usually will suck the oxygen out of any story. The charity has disclosed it.  Perhaps there will still be a story but it is not going to be as much of a story as if the problems were discovered by an investigative journalist through skill and a long process of putting things together. The article also quotes Greg Thomson who states “”In the case of this charity, they don't post their financial statements online, so anybody wanting to take a look at the financials of this charity would have to go to the T3010 filing,” Thomson said.”  I think this is fair – if you don't post your financials online which may be correct and your T3010s on the CRA website is inaccurate then it is more likely that the public will rely on the inaccurate T3010 and think the charity is not being transparent. 

4) The CBC noted that “IKH Foundation sent revisions to its T3010 on July 4 — more than 15 months after the end of the fiscal year, and nine months after they were originally submitted”.  If you have problems with your T3010 it is best to consider quickly whether they will be rectified.   Our law firm has recently launched a website ( that will help charities and journalists to see year over year financial and other information on registered charities.

5) “In total, there were 32 lines changed between the two documents. Among the more significant revisions were an increase of more than $100,000 in total revenues for the year, and about a $60,000 change in the expenses that had previously been classified as “other.””  When something changes on the T3010 it often causes many other changes – back to the earlier point – try to file accurately the first time.

6) Be mindful of what you put in your T3010 and your financial statements.  The article notes “Our client's audited financials contain information such as donor identity which is confidential,” noted … the lawyer who replied to follow-up questions on behalf of the foundation. “It also contains information as to the beneficiaries of funding which is a matter of privacy. Moreover all information is contained online that members of the public are entitled to. These statements have also been refused by our client in response to requests from government.” – this argument is confusing to me.  Why provide CRA with audited financial statements that have private donor and beneficiary information when anyone can request such document from CRA and it will be provided. If there is such private information and it is not redacted when filed with the CRA then is not the charity breaching its obligations to protect that information.  It is best not to have private information such as that in a financial statement.  The comment “ all information is contained online that members of the public are entitled to.” may be accurate from a legal point of view – however, it misses the point that when it comes to registered charities that wish to avail themselves of public funds or donations from the public that the public has an expectation of more information than what is just legally required to be provided in a form given to the CRA.  

7)”It was given to the auditors to file as has been the practice for many years,” Smith noted. “Our client was unaware that the replacement return had not been filed until sometime in June when it tried to replicate and reconcile a series of tables produced by government.'  If you are expecting something to be filed that will become public in a month or two on the CRA website it is a good idea to check whether the information is up on the CRA website.   Furthermore, and especially for larger organizations it is a good idea to check the accuracy of regular filings in case CRA has made an inputting mistake.  From my experience the vast majority of mistakes come from the charity end and a much smaller number from CRA.  

8) Asked about the 32 lines of changes to the form sent to the charity regulator, Smith said “staff errors and staff inattention to detail was the root cause along with the time to fastidiously perform a detailed review of all transactions and making the necessary correction of the errors thereby creating an accurate picture of the true financials of the foundation.”  I am not sure I need to add too much to this.

9) Best not to be provocative with the media. “He added: “Bottom line is that there are no concerns with the audit neither from the CRA nor the auditors themselves. What qualifications do you possess to question the audited statements?””  A charity in the heat of a PR crisis may want to publicly or privately chastize a reporter – this strategy is dangerous for the reputation of the charity as it makes the charity appear to be extremely defensive and trying to hide something.  Financial statements, even audited financial statements are not infallible, they are subject to interpretation and often subject to mistakes.   When you have just noted that “staff errors and staff inattention to detail was the root cause” of various problems it is not unfair for a reporter to question revised financial statements.

The T3010 used to be the domain of a few people who were policy wonks or investigative journalists.  They are now commonly used by the public to understand more about charities.  The T3010 is being revised by CRA and a new online form will be used in a couple of years.  The T3010 is not comprehensive and charities need to provide the public with far more information than that which is on the T3010. Furthermore, charities need to ensure that they are filing the T3010 accurately – not just because it is legally required but because the public, including donors and funders, expect that.  

We have spent considerable time working with clients to help them understand the T3010.  In some cases we suggest they fix historic problems with their filings before they are audited by CRA or a journalist writes a long story on the failures of the charity to file an accurate T3010.  A media expose can be far more stressful and damaging to the charity than a CRA audit.