Treasurers Training Day April 27 2019 Matters to

Treasurers’ Training Day April 27, 2019

Matters to Discuss � Parish Assessment and Appeals � Parish Audit Guidelines � Receipting Practices � Gifts of Services, In-kind, Securities and Insurance � Gifts/Grants from Other Charities � Reporting Requirements � Guidelines for Completing T 3010 � Questions

Parish Operating Receipts ASSESSABLE INCOME Ø Operating Income a. b. c. d. e. Ø Donations and gifts Investment Income (if used or transferred in operations) Gross church and parish hall rental income Net Rectory and land rental income Fundraising and miscellaneous income Deficit funded by Restricted Funds (previously un-assessed funds)

Parish Operating Receipts NON-ASSESSABLE INCOME � Onwards/Flow-through Donations (PWRDF, Care+Share, etc) � Donations for Capital Purposes � Grants under Parish Development Programme � Bequests for capital and investments � Funds from Sale of Capital Assets (rectory, organ)

Fair Share Assessment Rate Portion of 3 -Year Average Parish Operating Receipts (POR) Assessment Rate First $35, 000 $1, 200 $35, 001 - $150, 000 15. 50% Over $150, 000 17. 75%

Diocesan Fair Share Fund (formerly Diocesan Growth Fund) Threshold: If the 3 -Year Ave POR is equal or more than the median POR of all parishes (applies to top 50% of all parishes) Diocesan Fair Share Fund Assessment Rate 3 -Year Average POR x Variable Rate (not to exceed 1. 75%)

Dramatic Revenue Drop Appeal Parish may appeal for relief on grounds of a hardship created by a dramatic drop in revenue if each of the following circumstances are true: � 1) Prior year’s assessment expressed as a percentage of the Parish’s prior year’s POR exceeded: a) 16. 65% if the Parish was not a Supporting Parish in that year b) 19. 35% if the Parish was a Supporting Parish in that year;

Dramatic Revenue Drop Appeal Parish may appeal for relief on grounds of a hardship created by a dramatic drop in revenue if each of the following circumstances are true: � 2) The Parish is financially unable to pay the full amount of the said Assessment � 3) The Parish has submitted a written request to appeal under this Section 7. 4 no later than April 15 of the year following the year for which retroactive relief is requested or such later date as Diocesan Council may permit.

Parish Audit Guidelines Level of Revenue Diocesan Requirement $750, 000 or more Full Audit $250, 000 - $750, 000 Review Engagement Below $250, 000 If requested by: the Diocesan Treasurer and Director of Finance & Property plus Legal Officer; or any two of the Bishop, Diocesan Treasurer, or Chancellor Audit or Review Engagement not required Audit

Receipting Practices � � � Establish a donation receipting policy (ie. , only donation over $20 will be receipted) One tax receipt can be issued for all donations received during the year, or tax receipt can be issued as donation is received. Gifts-in-kind over $1, 000 requires professional valuation documentation to determine the fair market value of donation Tax receipts are best issued to donors by the last day of February of the following year Updated CRA website: www. cra-arc. gc. ca/charities

Gift of Labour � CRA’s Position: Such donations are not property and cannot be tax-receipted � Option: Cheque exchange The donor shall invoice the parish the fair market value of the labour and be paid for the service. And then, the donor shall donate to the parish using his/her personal cheque

Gifts-in-Kind � Donor buys items and donates it to the parish with sales receipt to prove Fair Market Value (FMV) e. g. , flowers for the Altar Guild � Misconception: Total value per sales receipt equals FMV � Amount on Donation Receipt: FMV before GST/PST

Gifts-in-Kind � GST/PST paid by the donor is not part of the FMV & cannot be tax-receipted � No GST rebate allowed, as the parish did not pay the GST Option: Cheque exchange

Gifts of Appreciated Securities Donate Shares Directly to Parish Sell Shares & Donate Cash Fair Market Value $50, 000 Less: Cost base (30, 000) 20, 000 Capital Gain tax rate 0% 50% Taxable Capital Gain 0 10, 000 45% 0 $4, 500 Capital Gain Assumed Tax Rate Tax Payable Conclusion: Donating shares directly to the parish is better than selling shares and donating the cash proceeds to the parish.

Securities Donation Form (Appendix 3. 1)

Gift Certificates and Gift Cards Holder (ie. , John) owns a gift card & donates it to the parish Eligible for tax receipt? Yes Issuer (ie. , Tim Hortons) donates a gift card to the parish No, at the time of transfer. Yes, if the parish redeems the certificate. No, if the parish transfers to another, ie. , at an auction

Ways to Give a Gift of Life Insurance Policy to the Parish Insurance Policy is gifted through a Will Donor-Owned Policy that names the Parish as a Beneficiary Donor Transfers Policy Ownership to the Parish. Fair Market Value of Donation Amount received. Requires actuarial Valuation. Considerations Cheque from the donor’s estate. insurance company. A very technical transaction requiring professional advice as to tax donation receipts. Tax receipt issued to The Donor’s Estate

Receipting Gifts from Other Registered Canadian Charities � Charities are not to issue official receipts for money (grants or gifts) received from other charities (ie. , the Diocese) � Report the gift as Donations Received from Other Charities in Line 4510 in T 3010

T 3010: Gifts from Charities

Data Back-up � Develop written policy on how to perform data back-up � Perform (ie. , save in USB or backup drive, online drive) minimum twice a month � Back-ups � Regularly should be kept offsite (ie. , monthly) test the backup to ensure the data is retrievable

Reporting Requirements For Canada Revenue Agency � T 4/T 4 A slips (last day of February) � T 4 A slips for honorarium, $500 or more (last day of February) � Tax Receipts (last day of February) (not submitted to CRA, but file copies must be retained) � Annual Charity Return Package (June 30 th) � GST 66 E, Application for GST Public Services Bodies’ Rebate – filed two times a year (one month after June 30 and after Dec 31 st)

Accounting of GST Rebate (50% of GST paid) � GST Refund should be reported in the financial statements as reduction of expenses, not an income

Reporting Requirements For Work. Safe BC (ie. , payroll done by the parish) � Payroll and Contract Labour Report (either quarterly or annually)

Reporting Requirements For the Diocese of New Westminster � PAD Updates (12 th day of the month) � Monthly Remittance (14 th day of the month) � Vestry Report (mid-March) � Parish Operating Receipts (mid-March) � Financial statements (mid-March) � Preliminary Assessment Form (Sep 30 th) � Final Assessment Form (Oct 31 st) Planning Schedule – p 5 of Treasurer’s Manual

Purposes of T 3010 � To maintain charitable licence status � To provide information to the public � To serve as a compliance tool for CRA: a) assess whether the charity meets its annual spending requirement b) assess whether a charity transferred any money to non-qualified donees

T 3010: Use the Correct version � T 3010 version changes every year. (page 1 of T 3010) Use of wrong version (ie. , last year’s) constitutes failure to file T 3010

T 3010: Rental Income � Rental Income Rental income or donation for hall/sanctuary usage should be reported under Gross Rental Income in Line 4610 (page 8 of T 3010)

T 3010: Compensation – Sch 3 (pg 7 of T 3010) Compensation includes all monetary amount to attract & retain staff (salaries + taxable & nontaxable benefits) plus CPP, EI, WCB.

T 3010: Diocesan Assessment/ Onward Transmissions (pg 9 of T 3010) � Report the Diocesan assessment and flowthrough donations in T 1236, Qualified Donees Worksheet and in Line 5050, Total amount of gifts made to Qualified Donees.

T 1236: Qualified Donees (Appendix 4. 3) The Diocese is NOT an associated charity.

T 3010: Expense Allocation (pg 9 of T 3010) � Allocation of Expenses: Lines 5000 -5040 should agree with Lines 4950 and 5031

T 3010: Expense Allocation (pg 9 of T 3010) � Charitable Activities (Line 5000) all expenses that will directly further your charitable purposes (i. e. , ministries/programs, priest’s salaries & benefits/organist’ honorarium, rent portion of the sanctuary or fellowship hall, prayer books, flowers for sanctuary)

T 3010: Expense Allocation (pg 9 of T 3010) � Management & Administration (Line 5010): include bookkeeping and admin personnel, Council meeting, office supplies, rent portion for the admin office) Other building expenses should be allocated b/w charitable and admin consistently.

T 3010: Expense Allocation (pg 9 of T 3010) � Fundraising (Line 5020): include expenses incurred to solicit donations.

T 3010: Financials � Include a copy of the financial statements duly signed by the treasurer. Failure to include is now a revocable offence.

Complete Charity Return Package T 3010, Charity Information Return TF 725, Basic Information Sheet Duly signed copy of the parish’ financials (balance sheet and income statement) Form T 1235, List of Directors and Officials Form T 1236, Qualified Donees (Donations made to Other Charities, Diocesan Assessments, PWRDF, Care+Share)

Registered Charity Information Return Summary If the Registered Charity Return Summary is materially incorrect, file T 1240, Registered Charity Adjustment Request.

Shailene Caparas scaparas@vancouver. anglican. ca (604) 684 -6306 x 214 Robert Dickson rdickson@vancouver. anglican. ca (604) 684 -6306 ext 215