The Canadian Charity Law Podcast

This episode outlines the key responsibilities for Canadian charity board directors. 
‍These responsibilities include monitoring the executive director's performance, making organizational decisions, maintaining accurate records, filing returns with the Canada Revenue Agency, and approving financial statements. 
‍The outline also covers budget development, ensuring sufficient and well-trained board members, preparing an annual report, convening an annual general meeting, and regularly evaluating risks.

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.I.G. 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. So you wanna be, like, the best charity board member you could be. Right?

Sara:

Obviously.

David:

And, you know, there's a lot to know. Yeah. So you found this annual checklist for a charity board of directors, and we're gonna kinda dig into it and see what we can pull out of it.

Sara:

Sounds good.

David:

The first section is overseeing the executive director.

Sara:

Oh, yeah. That's a big one.

David:

So how do we how do we keep the executive director accountable without, you know, micromanaging?

Sara:

Well, I mean, that's the thing. Right? It's all about accountability, but not, you know, breathing down their neck all the time. The checklist mentions, like, regular performance reviews and giving updates during the meetings.

David:

Right.

Sara:

But, you know, it's almost like how they interact day to day.

David:

Yeah.

Sara:

You know, how do they communicate challenges, and are they proactively, like, keeping the board informed?

David:

So it's less about the formal reviews and more about just, like, that open communication and that relationship.

Sara:

Yeah. Exactly. And that's where you can really kinda tell if things are on track or not.

David:

Mhmm.

Sara:

Like, a really good executive director is gonna gonna be transparent about the tough stuff, you know, and passionate about the cause and inspire the team, that kinda thing.

David:

So what are some red flags then? What should we look for?

Sara:

Oh, you know, if reports are constantly late or if there's, like, no clear vision, you know, or even, like, low staff morale, that kind of thing Yeah. That might be a sign that something's up.

David:

That's a good point. Okay. So moving on to making key decisions.

Sara:

Oh, decisions.

David:

That's where the board really, you know, holds the power. Yeah. We're talking selecting officers, hiring or firing the executive director, approving major purchases. Yeah. The really big important stuff.

Sara:

Yeah. The big bucks.

David:

Yeah. So how can a board member make sure they're making, like, an informed decision, especially when you're talking about financial matters that can get complicated?

Sara:

Yeah. Well, the checklist actually says that you should probably consult a CPA Canada guy

David:

Oh, interesting.

Sara:

To help understand the financial statements, which, you know, sounds like

David:

that exciting.

Sara:

Not thrilling, but it's crucial.

David:

It is important. Yeah. Because Yeah. You need to understand that stuff before you approve the budget or, you know

Sara:

Absolutely. It's about protecting the charity's assets but also building trust with donors. You know? Right. Showing that their money's being managed responsibly.

David:

Makes sense. Alright. Let's talk about record keeping.

Sara:

Oh, yeah.

David:

Record keeping the unsung hero, as they say.

Sara:

It is kind of the unsung hero, isn't it?

David:

Because it's not the most glamorous topic.

Sara:

No. But super important.

David:

But it is really important. Yeah. So this is all about transparency and accountability. Right?

Sara:

Yeah. And they list a whole bunch of key documents in the checklist. It's like your letters, patent bylaws, meeting minutes

David:

Okay.

Sara:

Registers for directors and members contracts and supporting documentation, like

David:

A lot.

Sara:

All that good stuff.

David:

So, basically, what they're saying is you need a clear auditable trail of basically everything that's happening at the charity.

Sara:

Well, yeah. Because imagine you're getting audited, and there's a question about, like, a specific decision or something. Good records are your best defense. They show that you were doing everything above board and transparently.

David:

So it's not just about checking a box. It's actually about protecting the charity.

Sara:

Yeah. For the long term.

David:

Okay. So let's talk about financial stewardship. The checklist emphasizes the board's role in approving financial statements and developing that annual budget.

Sara:

Right.

David:

I'm guessing this all ties back to that fiduciary responsibility we were talking about.

Sara:

Oh, for sure. It does. But it's more than just, like, signing off on the numbers. Yeah. You really need to understand what that story is behind the numbers.

David:

Yeah.

Sara:

You know, what are the biggest expenses? Are there any red flags? You know? Are you actually on track to meet your fundraising goals?

David:

So it's about asking the right questions.

Sara:

Yeah. Exactly.

David:

Making sure everything aligns with the mission and the goals.

Sara:

Yeah. And you have to be able to explain that to the charity's members too.

David:

Oh, yeah.

Sara:

They need to see that their money is being used wisely.

David:

Transparency is key.

Sara:

Always is.

David:

Alright. Last one for this section. We're gonna talk about building a strong board.

Sara:

Okay. Team building.

David:

So this is all about, you know, assembling that perfect team Yeah. And making sure that everybody is, you know, up to speed.

Sara:

Yeah. And, you know, a lot of people just focus on the fundraising Right. Which is important, of course. But building a strong board is, like, the foundation for everything else.

David:

It is.

Sara:

You need the right mix of skills, experience, passion, that kind of thing.

David:

So the checklist mentions having enough directors to share the workload effectively.

Sara:

Right.

David:

But it's not just about numbers. Right?

Sara:

No. It's about having people with the right expertise.

David:

Yeah.

Sara:

You need people who understand finances, legal matters, fundraising marketing, and the actual area of work the charity does. You know, the more diverse the board, the better the decisions.

David:

And they also talk about training, which I think is a good point

Sara:

Yes.

David:

For new directors, and then ongoing training as well.

Sara:

Keeping everybody up to date.

David:

Yeah. Because things change. Right? Mhmm. You know, laws change.

David:

Best practices change.

Sara:

Oh, yeah.

David:

So it's important to keep learning. So it's not just about finding passionate people. It's about finding people who are willing to put in the time and the work to really understand how this all works.

Sara:

Couldn't have said it better myself.

David:

Alright. So before we move on to the next section, I wanna ask you, the listener, something to think about.

Sara:

Oh, good.

David:

If you were putting together a charity board, what skills or expertise would you prioritize, and what kind of training would you consider absolutely essential?

Sara:

Think about that for a second. We'll be right back to dive into some more of these checklist essentials.

David:

Welcome back. We're still working our way through this annual checklist for Cherry board of directors, and I'm starting to see how it all kinda fits together.

Sara:

It's all connected.

David:

Like you were saying earlier, it's about building a culture of, like, you know, everybody knows what their role is. Everybody feels empowered.

Sara:

Exactly.

David:

And it's all for the greater good of the charity. Yeah. Working together as a team. Okay. So let's talk about communication.

David:

Alright.

Sara:

This as

David:

a team. Okay. So let's talk about communication. Alright. This section is called communication is key.

Sara:

Love that title.

David:

And it talks about the annual report, which I always thought was kind of like a, you know, just a formality.

Sara:

Oh, no. It's a big deal.

David:

But it's actually like a really powerful tool.

Sara:

Think of it as your chance to shine. You know, highlight your accomplishments. Explain how you used all those donations update members on the impact the charity is making.

David:

Okay.

Sara:

It's all about building trust.

David:

Yeah. That makes sense. And they also talk about the annual general meeting

Sara:

Oh, yeah.

David:

Where the board reports to the members. They hold elections. They kinda set the direction for the year ahead.

Sara:

That's where everybody gets together. And it's really important to make sure the members feel like they're part of the process.

David:

Yeah. Like, they're engaged.

Sara:

Yeah. They can ask questions, give feedback, that kinda thing.

David:

Makes them feel involved. Okay. This next section is called risk management, thinking ahead. And I gotta say this one makes me a little nervous.

Sara:

I know nobody wants to think about bad stuff happening.

David:

Right.

Sara:

But it's important to be prepared. You know?

David:

Okay. So the checklist talks about regularly reviewing financial records, which makes sense. You know, gotta watch out for those red flags.

Sara:

Of course, gotta keep an eye on the money.

David:

But what else can a board do to, like, you you know, prevent bad stuff from happening?

Sara:

Well, I mean, a formal risk management policy is a really good place to start.

David:

Okay.

Sara:

You know, it basically outlines the types of risks the charity might face, how you assess them, and what steps you can take to minimize the damage.

David:

So it's like a plan?

Sara:

Yeah. Like a road map for dealing with potential problems.

David:

Okay. And, of course, you gotta have good insurance too. Right?

Sara:

Oh, yeah. Absolutely. You gotta have that safety net just in case.

David:

Just in case. Yeah. Alright. So this is all about being proactive and anticipating challenges and having a plan in place.

Sara:

You got it.

David:

Okay. So we've talked about overseeing the executive director, making decisions, managing risks. But what about fundraising?

Sara:

Yes. The

David:

The lifeblood of any charity. It is. So what's the board's role in all that?

Sara:

Well, they play a really important role even if they're not out there shaking the donation bucket themselves.

David:

So what should they be focused on?

Sara:

It's all about strategy and oversight. You know, they need to figure out the funding priorities, identify potential sources, set realistic goals, and make sure that all the fundraising activities are aligned with the charity's mission.

David:

That makes sense.

Sara:

And, of course, they need to make sure all the money is being used responsibly.

David:

Right. Build that trust with the donors.

Sara:

Exactly.

David:

Now the checklist specifically mentioned special events

Sara:

Oh, the parties.

David:

Which can be fun.

Sara:

They are fun.

David:

But are they always, like, an effective way to raise money?

Sara:

Well, they can be a great way to raise awareness, you know, engage the community, generate some excitement.

David:

Yeah.

Sara:

But they can also be very time consuming and expensive. Yeah. So you gotta be strategic about it.

David:

So you can't just throw a party and hope for the best.

Sara:

Well, you can, but you probably shouldn't.

David:

So the board needs to, like, really weigh the pros and cons.

Sara:

Yeah. Think about the return on investment, you know, both financially and in terms of other benefits.

David:

So, like, did we meet our fundraising goals? Did we reach new people? Did we strengthen relationships with existing donors?

Sara:

Those are all great questions.

David:

So it's like with everything else we've talked about. You need a plan. You need goals. You need to track your progress.

Sara:

Measurement is key.

David:

Alright. Before we move on, I wanna ask you, the listener, a question.

Sara:

Hit me.

David:

Have you ever been involved in fundraising for a charity? What are your thoughts on special events?

Sara:

Give that some thought. We're gonna tackle a topic that's a little bit intimidating next. Yeah. It's legal compliance.

David:

We're back. And I'm telling you, this annual checklist for charity board of directors has been a real eye opener.

Sara:

It's amazing how much goes into being on a board. Yeah.

David:

I mean, we've talked about finances and risk and leadership and even, you know, parties. Parties are important. They are important. But now we gotta get serious for a second.

Sara:

Okay. Getting down to business.

David:

Yeah. And talk about legal compliance.

Sara:

Oh, the scary stuff.

David:

Which I know can be intimidating.

Sara:

That can be.

David:

So the checklist mentions things like charitable registration and tax filings and fundraising regulations and privacy laws. Right. So a lot to keep track of.

Sara:

It is a lot, especially if you're not a lawyer.

David:

Exactly. So how can a board make sure they're doing everything right, you know, legally speaking?

Sara:

Well, the first step is recognizing that legal compliance is everyone's responsibility.

David:

Okay.

Sara:

It's not just for the lawyer on the board if there even is 1.

David:

Right.

Sara:

So the checklist recommends having, like, a designated compliance officer or maybe a whole committee

David:

Okay.

Sara:

Whose job is to stay informed about all the relevant laws and regulations.

David:

So like a point person?

Sara:

Yeah. Exactly. Someone who keeps an eye on things and make sure the board is up to date.

David:

Makes sense.

Sara:

Okay.

David:

And it's also about having good policies in place.

Sara:

Right. Oh, yeah. For sure. Like, a conflict of interest policy can help prevent situations where, you know, someone's personal interest could influence their decisions.

David:

Right. You gotta keep everything above board.

Sara:

Transparency is key.

David:

So all this legal stuff can get pretty confusing, though.

Sara:

Oh, yeah. For sure.

David:

Are there resources that can help boards navigate all this complexity?

Sara:

Oh, absolutely. There are lots of legal experts who specialize in charity law. They can provide guidance and training to boards. Mhmm. And there are tons of online resources and publications from, like, government agencies and charity watchdog organizations.

David:

Okay. So don't be afraid to ask for help.

Sara:

Never be afraid to ask for help.

David:

Alright. So we've got the legal stuff figured out. Mhmm. But there's one more thing we need to talk about, and that's evaluation.

Sara:

Ah, yes. Checking in with yourself.

David:

Exactly. It's about continuous improvement.

Sara:

Always striving to be better.

David:

So how does a charity board actually go about evaluating its own performance?

Sara:

Well, it's about taking a step back and asking some tough questions.

David:

Like what?

Sara:

Like, are we actually achieving our goals? Are we making a real difference? Are we fulfilling our responsibilities? You know, all that good stuff.

David:

So it's about holding ourselves accountable.

Sara:

Yeah. And not just assuming that we're doing a good job because we have good intentions.

David:

Right. Good intentions aren't enough.

Sara:

Not always. The checklist recommends conducting regular self assessments, maybe even bringing in an outside facilitator to get a fresh perspective.

David:

Interesting.

Sara:

And it's not just about the board itself. It's about getting feedback from stakeholders too.

David:

Oh, yeah. Like the staff and the volunteers.

Sara:

Exactly. Okay. Even the people the charity serves.

David:

Right. Because they're the ones who are actually experiencing the impact.

Sara:

Exactly. So

David:

it's about being open to feedback and using it to grow and improve.

Sara:

And that's what sets a truly great board apart, that commitment to always getting better.

David:

Well, I have to say this has been a really insightful conversation.

Sara:

It has been fun.

David:

It has been fun. We've covered so much ground today.

Sara:

So much.

David:

And I think this checklist has really given us a better understanding of what it takes to be an effective charity board member.

Sara:

Absolutely.

David:

It's a big responsibility, but it's also incredibly rewarding.

Sara:

You're making a difference in the world.

David:

And I hope our listeners feel inspired to step up and take on that challenge.

Sara:

I hope so too.

David:

So that's a wrap on this episode of the deep dive. We We hope you enjoyed our exploration of the annual checklist for Charity Board of Directors.

Sara:

Thanks for listening.

David:

Until next time. Stay curious.