Duties of Charity & Not-For-Profit Board Members During the Pandemic
By Adam Aronson, CPA, CA
Senior Manager, Assurance & Advisory Services
While we all grapple with the challenges of the pandemic at home and at work, boards members of charity and not-for-profits have the added responsibility of fulfilling their duties as directors.
Key issues for charity and not-for-profit board members to consider are:
Cash Flow & Tax Obligations
Your cash flows need to be carefully monitored during the pandemic. Despite the slowdown, your GST, HST, and payroll deductions need to continue to be remitted based on CRA’s revised guidelines. Your organization is considered to be holding the funds in trust and Directors can be held personally liable for amounts owing.
Some organizations may benefit from revisiting the amount of business insurance required if operations are being streamlined. We recommend maintaining your Directors liability insurance to mitigate the risk of Directors being exposed to liability.
Honour the restrictions on donations
You must continue to honour any restrictions on funding you have received even if the organization needs cash. If necessary, consider contacting funders to discuss changing or easing the restrictions so that the funds can be used for urgent needs.
Remember your mandate
Some organizations are finding new ways to bring in money, but it is important these activities remain within the scope of the organization. The consequences to a charity for operating outside of its charitable objectives can lead to fines, loss of receipting privileges, or even revocation of charitable status.
Organizations will have to make decisions quickly as our new reality continues to evolve so Directors need to stay up-to-date. Directors should be proactively asking questions of those running the day-to-day operations and seek out professional advice when necessary.
Be up front about your ability to serve on the board
Everyone is facing new and unexpected challenges and, in some circumstances, Directors may not be able to continue serving on the board. If the COVID-19 pandemic has affected your ability to serve, it is important to inform the organization that you no longer have the capacity to fulfill your duties as a Director.
Charities and not-for-profits are amongst those hardest hit by this crisis. The role of the Board of Directors in guiding the organization through it has perhaps never been more critical. For more insights on the impact of COVID-19 on the charitable and not-for-profit sectors and the aid programs being offered by the government, see Jeffrey Miller’s COVID-19 Commentary.