The Canadian Charity Law Podcast

This episode provides a guide to essential legal documents for churches in Ontario. It details the importance and preparation of Articles of Incorporation, bylaws, volunteer policies, and a statement of faith.

Furthermore, it highlights the necessity of additional policies covering finances, discipline, and facility use, along with maintaining crucial records like meeting minutes and member databases.

This episode is jointly sponsored by B.I.G. Charity Law Group Professional Corporation, a Charity Law Firm exclusively serving charity and not-for-profit clients in Toronto, Ontario and across Canada with registration and governance, and B&H Charity Accounts Group, a bookkeeping firm serving Canadian charities in Ontario with all their financial and tax filing needs.

https://www.charitylawgroup.ca/
P: 416-488-5888

https://www.charityaccountingfirm.ca/
P: 289-301-8883

Creators and Guests

DJ
Producer
Dov Goldberg, J.D.
Dov Goldberg is a manager partner at B.I.G. Charity Law Group Professional Corporation, a Charity Law Firm Providing Services Exclusively to Charities Across Canada

What is The Canadian Charity Law Podcast ?

Exploring the ins-and-outs of Canadian Charity Law in a way that can be understood by the layperson, including Charity Registration, Not-for-Profit Incorporation, Charity Governance, Charity Fundraising, Tax Receipting, and much more!

David:

Alright. Let's, let's jump right in.

Sara:

Okay.

David:

Today, we're doing a deep dive into something that, might not sound super exciting, but trust me, it's crucial. Yeah. Legal documents for churches in Canada. Right. Imagine this.

David:

You're pouring your heart into building a community, spreading a message of hope, but then, bam.

Sara:

Oh, yeah.

David:

Legal trouble hits.

Sara:

Not fun.

David:

Not fun.

Sara:

Right.

David:

We're here to help you avoid that headache.

Sara:

That's right. We're gonna break down the must have paperwork that keeps your church running smoothly and legally sound.

David:

Okay.

Sara:

Think of this as your legal toolkit for, worry free ministry.

David:

Okay. So first things first, we've got these articles of incorporation. I've heard them described as a church birth certificate Yeah. Which makes sense. Right?

David:

They make things official.

Sara:

Exactly. It's like registering your church with the government saying, hey. We're here. We're a legit organization, and we're ready to do some good. Mhmm.

Sara:

Without them, you're not really recognized as a legal entity.

David:

So it's not just about paperwork. It's about having the legal standing to operate open bank accounts, all that jazz.

Sara:

Absolutely. And this is where it gets practical. Say you're a new church in Ontario wanting to apply for a grant. Okay. A lot of grantmakers will require your articles of incorporation as proof that you're a properly established organization.

David:

Makes sense. Yeah. So walk me through this. Mhmm. What actually goes into these articles?

David:

What do you need to have ready to go?

Sara:

Well, you'll need the basics, like your church's official name Uh-huh. And address. But here's where it gets interesting. You also need a clear purpose statement.

David:

Okay.

Sara:

This is your chance to articulate your church's mission, what you stand for

David:

Right.

Sara:

What you're hoping to achieve.

David:

So it's not just bureaucratic. It's kind of a mission statement moment too.

Sara:

Precisely. And don't forget about listing your initial board of directors.

David:

Okay.

Sara:

This establishes leadership from the get go. Then in Ontario, you'd file these articles with the Ministry of Public and Business Service Delivery under the Ontario Not for Profit Corporations Act.

David:

Wow.

Sara:

You might hear lawyers call it ONCA for short.

David:

ONCA. Got it. Yeah. Now once you're incorporated, what's next on the legal checklist? Yeah.

David:

Is it time for the rule book?

Sara:

You bet. Next up are the bylaws, and these are crucial.

David:

Right.

Sara:

Imagine a church without a clear structure for making decisions. Oh. It could easily lead to confusion, disagreements, even legal battles.

David:

No. Wow.

Sara:

Bylaws prevent that by outlining how things run.

David:

Okay. So bylaws equal structure and clarity. Yeah. But give me some specifics. What kind of rules are we talking about here?

Sara:

Think of it like this bylaws determine how your board of directors is structured.

David:

Okay.

Sara:

How often they meet, how long they serve, and even how to remove someone if needed.

David:

Right.

Sara:

These are the nuts and bolts of governance ensuring decisions are made fairly and transparently.

David:

That makes sense. Yeah. You know, I was part of a church once where things got messy because the bylaws weren't clear about board terms.

Sara:

Oh.

David:

It caused a lot of tension and slowed down important decisions.

Sara:

That's a perfect example of why bylaws matter.

David:

Yeah.

Sara:

Having clear guidelines helps prevent conflicts and ensures the church runs smoothly.

David:

Right.

Sara:

And if a disagreement does arise, you can always refer back to the bylaws to see what was previously agreed upon.

David:

So it's like having a neutral referee on hand to settle disputes before they escalate.

Sara:

Exactly. And when it comes to creating these bylaws, don't try to wing it.

David:

Oh, no.

Sara:

I always recommend churches consult a lawyer who specializes in charities to make sure everything is legally sound and tailored to your specific needs.

David:

Great advice. Okay. Moving on. We've got volunteer policies and agreements.

Sara:

Yeah.

David:

And this might surprise some folks.

Sara:

Yeah.

David:

I think many churches rely heavily on volunteers, but don't always think about the legal side of things.

Sara:

That's so true. Volunteers are incredible, but it's essential to have clear policies to protect both them and the church, especially in sensitive areas like childcare.

David:

Yeah.

Sara:

Think background checks, supervision guidelines, codes of conduct. It all needs to be in writing.

David:

Yeah. It's about creating a safe and transparent environment for everyone involved.

Sara:

Right.

David:

And I bet having clear policies also helps avoid misunderstandings and manage expectations right. Policies also helps avoid misunderstandings and manage expectations. Right?

Sara:

Absolutely. Written agreements outline responsibilities, boundaries, even things like dress code. Oh, wow. It might feel formal, but it actually helps build trust and clarity within the volunteer team.

David:

Okay. So we've covered incorporating your church. Yeah. Setting up bylaws and creating volunteer agreements.

Sara:

Yeah.

David:

Now I'm curious about something that feels a little less legal and a bit more about a church's identity.

Sara:

Right.

David:

The statement of faith.

Sara:

You're right. The statement of faith is more about articulating your core beliefs and values.

David:

Mhmm.

Sara:

It's not legally required in Canada, but it's still incredibly valuable.

David:

I can see how it helps potential members understand what your church stands for. Oh. Like a window into your theological heart. Right?

Sara:

Exactly. And it goes beyond just attracting members. A clear statement of faith can also be crucial for things like grant applications. Oh. Some foundations require it to ensure your values align with their funding priorities.

David:

So it's about internal clarity, n e d, how you present yourself to the outside world.

Sara:

Precisely. And when it comes to crafting your statement, avoid generic language. Take the time to express your unique perspective and make it easily accessible on your website and welcome materials.

David:

Okay. So far, we've talked about articles of incorporation Yeah. Bylaws, volunteer policies, and the statement of faith. Is there anything else churches absolutely need to have in place legally speaking?

Sara:

Oh, yes. There are a few more essential policies that are crucial for smooth operations and risk management.

David:

Okay.

Sara:

We're talking about financial policies, disciplinary procedures, and guidelines for using church facilities.

David:

Alright. Let's break those down 1 by 1. First up, financial policies.

Sara:

Okay.

David:

What are some key things to consider here?

Sara:

This is all about transparency and accountability. Your financial policy should cover everything from handling donations to who has the authority to sign checks.

David:

Mhmm.

Sara:

You wanna prevent any potential for mismanagement and ensure every dollar is used wisely.

David:

It's like having a financial rule book that safeguards the church's resources and builds trust with the congregation.

Sara:

Exactly. And don't forget about things like conflict of interest policies and whistleblower protections. These demonstrate a commitment to ethical practices and protect everyone involved.

David:

Good points. Yeah. Now this next one might feel a bit uncomfortable to talk about, but it's important. Yeah. Disciplinary procedures.

David:

What happens when someone violates the church's code of conduct?

Sara:

It's not an easy topic, but it's crucial to have clear procedures in place. These outline the steps for investigating misconduct, ensuring due process Right. And determining appropriate consequences. The goal is to be fair, transparent, and protect both the individual and the church.

David:

So it's not about punishment. It's about having a clear and just process to address difficult situations.

Sara:

Exactly. It's about creating a safe and accountable environment for everyone. Yeah. And don't forget about having a clear appeals process as well. Okay.

Sara:

This ensures fairness and allows for different perspectives to be heard.

David:

Okay. That makes sense. And finally, what about guidelines for using church facilities? I imagine this is especially relevant for churches that rent out their spaces to community groups or other organizations.

Sara:

Absolutely. You need clear policies outlining who can use your space for what purpose and under what conditions. This helps manage liability, ensure appropriate use aligned with your church's values, and avoid potential conflicts.

David:

So for example, if a church rents out its gymnasium, they'd have a clear agreement outlining the rules, responsibilities, and expectations for both parties.

Sara:

Exactly. Yeah. It's about protecting your property, your values, and ensuring that everything runs smoothly.

David:

Okay. We've covered a lot of ground already.

Sara:

We have.

David:

Articles of incorporation bylaws, volunteer policies, a statement of faith Yeah. Plus these additional essential policies. But before we move on, is there anything else churches should keep in mind in terms of documents and record keeping?

Sara:

You know, there are a few more that might not be legally binding but are still super important for good governance and smooth sailing.

David:

Alright. Let's hear it. What are these additional documents churches should be mindful of?

Sara:

1st, if your church is registered as a charity, which, by the way, has huge benefits like tax exemptions

David:

Oh, yeah.

Sara:

You'll need to keep those Canada Revenue Agency registration documents handy.

David:

Okay.

Sara:

They're like your official charity ID proving you're in good standing.

David:

Right. Because it's not just about doing good deeds. It's about doing them within the legal framework of being a registered charity. There are specific rules to follow.

Sara:

Exactly. And one area that can be tricky for churches is the issue of political activity.

David:

Oh, okay.

Sara:

The CRA is very strict about charities, including churches not using their resources to support political parties or candidates.

David:

So it's about maintaining a clear separation between religious activities and partisan politics. Yeah. That makes sense, especially in today's climate where things can get pretty heated.

Sara:

You got it. And it's not always black and white. There can be gray areas, so churches need to be careful about what they endorse or promote publicly. For instance, a church could run the food bank as a charitable activity, but might cross a line by explicitly telling members to vote for a specific candidate who promises to fund food banks.

David:

That's a great example. Yeah. So it's not about silencing churches. It's about making sure charitable work stays focused on its mission and doesn't become a tool for partisan politics. And this is where having good legal counsel can be really helpful.

David:

Right?

Sara:

Absolutely. If a church is ever unsure about an activity or statement, it's always best to consult a lawyer who understands charity law. It's better to be safe than sorry, especially when your charitable status is at stake.

David:

Okay. That makes a lot of sense. Yeah. Now besides those CRA documents, what other nonlegal but still important documents did you have in mind?

Sara:

Well, good record keeping is a sign of good governance, and that includes detailed minutes from your board meetings.

David:

Uh-huh.

Sara:

Think of them as a historical record of every decision made, every discussion had, and every action taken. If questions ever arise, you can refer back to those minutes for clarity.

David:

It's like having a paper trail for all the important decisions, which can be really helpful if there's ever a dispute or confusion about how something was handled.

Sara:

Exactly. It also demonstrates transparency to your congregation and stakeholders. And speaking of transparency, it's also wise to maintain an updated member database. It doesn't have to be fancy, just a system for tracking basic information about your members.

David:

So we're talking names, contact info Mhmm. Maybe some demographic data. Yeah. Basically, a central hub for member information. Yeah.

David:

I can see how that would be useful for communication planning events and even just getting a better understanding of your congregation.

Sara:

You hit the nail on the head. It's a practical tool that helps with organization outreach. Now we've talked a lot about the nuts and bolts of these legal documents.

David:

Yeah.

Sara:

But I'm curious what are some of the rewards of getting this legal side of things right? I mean, it's more than just avoiding headaches. Right?

David:

That's a great question. What comes to mind for you? How does having these documents in place actually benefit a church beyond just the legal stuff?

Sara:

Well, for starters, it creates a sense of stability and security.

David:

Mhmm.

Sara:

When a church has clear policies and procedures, everyone knows what's expected of them. Mhmm. It eliminates ambiguity and allows the leadership to focus on ministry and outreach knowing the operational side is well managed.

David:

It's like having a solid foundation that allows you to build something amazing. Yeah. You're not constantly worrying about the ground crumbling beneath you.

Sara:

Precisely. And beyond the practical benefits, there's also a sense of peace of mind that comes with knowing you're doing things the right way. It protects the church, its leaders, and its members from potential legal issues, which allows everyone to operate with confidence and integrity.

David:

And that peace of mind can be so valuable.

Sara:

Right. It

David:

allows you to focus on your mission and build trust with your community knowing you're operating ethically and responsibly. It's like taking care of the business side of things so you can get back to the responsibly. It's like taking care of the business side of things so you can get back to the heart of what church is all about.

Sara:

That's exactly it. And, you know, as we talk about this, I'm reminded of something a pastor once told me. He said, good governance isn't just about rules. It's about stewardship. It's about being responsible for the resources entrusted to us, whether those are finances, property, or the well-being of our members.

Sara:

It's about honoring those resources by managing them wisely and ethically.

David:

I love that. Yeah. It reframes the whole legal aspect as an act of service, of caring for the church, and ensuring its long term health and vitality.

Sara:

That's a beautiful way to put it. It's not about bureaucracy. It's about stewardship.

David:

Now before we move into our final thoughts, I do wanna touch on something we mentioned earlier, the importance of seeking expert legal advice. I know it could feel like an added expense, but could you talk a bit more about why it's so crucial for churches to have good legal counsel?

Sara:

You know, I understand the hesitation, especially for smaller churches with limited budgets. But honestly, investing in good legal counsel is one of the smartest things a church can do. It's not just about drafting documents. It's about having someone who understands charity law, can answer your questions, review agreements, and guide you through any legal challenges that might arise. It's like having a trusted adviser in your corner.

David:

And it's not just about avoiding problems. It's about maximizing opportunities. Right? Yeah. Like, knowing how to structure a fundraising campaign in a way that complies with charity law or navigating the complexities of property ownership?

Sara:

Absolutely. A good lawyer can help you navigate those complexities and ensure you're operating in a way that benefits the church and protects its mission. It's about proactive planning, not just reactive damage control.

David:

So it's not just to break glass in case of emergency situation. It's about having an ongoing relationship with a lawyer who understands your church and can provide guidance as you grow and evolve.

Sara:

Exactly. And that brings us to our final thought. We've covered a lot of ground today from articles of incorporation to bylaws to those less formal but still important documents. As we wrap up this part of our deep dive, I wanna leave you with this question to ponder a list. What is one step you can take this week to ensure your church is on solid legal ground?

Sara:

Maybe it's reviewing your bylaws, updating your volunteer agreements, or simply making a list of the documents you need to gather.

David:

That's a great challenge. Remember, even small steps can make a big difference. And sometimes the hardest part is just getting started. And speaking of getting started, I know this can all feel overwhelming.

Sara:

Yeah. I

David:

remember when I first joined the church board, I felt like I was drowning in legal jargon and paperwork.

Sara:

Yeah. It's a lot.

David:

So I have to ask, what advice would you give to church leaders who might be feeling intimidated by all this legal stuff? Where do they even begin?

Sara:

It's totally understandable to feel that way. My advice would be to take a deep breath Okay. And approach it step by step. Alright. Start by taking inventory of what documents you already have.

Sara:

Okay. Then make a list of the missing pieces. Don't try to tackle everything at once. That's a recipe for burnout.

David:

Right. Break it down into manageable chunks. It's like cleaning out a cluttered closet. Yeah. You don't have to do it all in one day.

Sara:

Exactly. And remember, you don't have to go it alone. Reach out to other churches in your area, maybe ones with more experience in this area. Yeah. Connect with denominational resources or even consider joining a peer group for church leaders.

David:

K.

Sara:

Sharing experiences and best practices can be incredibly helpful.

David:

It's about building a network, tapping into collective wisdom. Now on the flip side, are there any common mistakes you see churches making when it comes to legal matters? Things to watch out for?

Sara:

One of the biggest mistakes is simply not having these documents in place at all.

David:

Okay.

Sara:

Some churches operate informally for years relying on goodwill and verbal agreements. But as a church grows, that can lead to misunderstandings, disputes, and even legal liabilities, like building a house without a blueprint, eventually, things start to crack.

David:

I've seen that happen firsthand, and it's not pretty. It could really damage trust and create unnecessary conflict. Yeah. So having those documents is about being proactive, not just reactive.

Sara:

Absolutely. Another common mistake is not keeping documents up to date. Oh. Laws change. Best practices evolve.

David:

Yeah.

Sara:

And a church's needs shift over time. It's crucial to review and update your governing documents regularly, maybe every few years or so, to ensure they're still relevant and effective.

David:

So it's not a set it and forget it kinda thing.

Sara:

Yeah.

David:

It requires ongoing attention and maintenance, like tending a garden. Yeah. You have to prune and adjust to keep things flourishing.

Sara:

Such a good analogy. And finally, I often see churches struggling with a lack of clarity around roles and responsibilities. Yeah. Who has the authority to make decisions?

David:

Right.

Sara:

What are the procedures for financial transactions? These are all things that should be clearly outlined in your governing documents to prevent confusion and potential power struggles.

David:

It's about creating a culture of transparency and accountability where everyone understands the rules of the game. That prevents a lot of headaches down the line.

Sara:

You got it. And when you have those structures in place, it allows the church to function smoothly and effectively focusing on its mission rather than getting bogged down in internal conflicts or legal battles. Ultimately, these legal documents aren't about burdening churches with bureaucracy. They're about empowering them to thrive.

David:

That's a perfect point to emphasize. Yeah. It's about protection, sustainability, and ultimately freedom to focus on what matters most.

Sara:

Right.

David:

So as we wrap up this deep dive into the world of legal documents for Canadian churches, What's the one thing you hope our listeners will take away from this conversation?

Sara:

I hope they'll walk away feeling empowered and equipped, not intimidated. Mhmm. Having clear legal structures isn't about stifling a church's spirit. It's about providing a solid foundation on which to build a thriving and impactful community. It's about protecting their mission, ensuring their longevity, and allowing them to focus on what truly matters, serving their communities, and spreading their message.

David:

Beautifully said. It's about seeing these legal documents not as obstacles, but as enablers. They're tools that can help churches operate with integrity, transparency, and confidence.

Sara:

And remember, if you're ever in doubt, don't hesitate to reach out to those experts we talked about earlier. Whether it's a lawyer, a denominational resource, or a fellow church leader

David:

Yeah.

Sara:

There are people who can help you navigate this journey and set your church up for success.

David:

Absolutely. And to our listeners, thank you for joining us on this deep dive.

Sara:

Thanks, everyone.

David:

We hope you found it informative and, dare I say, even a little bit exciting.

Sara:

Exciting in a secure future kind of way.

David:

Exactly. Remember, knowledge is power. And by understanding these legal aspects, you're taking a big step toward ensuring your church can focus on what it does best, making a positive difference in the world.

Sara:

Well said.

David:

Thanks again for joining us. Until next time. Keep diving deep and keep building something amazing.