The Income Tax Act requires a charity to keep books and records that show it continues to qualify for registration as a charity.

• This means that a charity must keep books and records that demonstrate that any political activities it carries out comply with the Act.

• A charity’s books and records can include, but are not limited to, invoices, ledgers, records of volunteer hours worked, contracts, and minutes of board meetings.

The Canada Revenue Agency recognizes that charities may use different methods to track the use of their resources, but a charity must always be able to show which resources are used, how they have been used, and for what activity. For example, a charity might examine and track the following types of resources devoted to political activities:

• Financial resources – All financial expenditures, including salary and other human resource costs

• Capital assets – The percentage of use of building and office space, the percentage or amount of proceeds or withdrawals from the charity’s investments that are spent on political activities

• Volunteer time and donated resources – The percentage of volunteer hours or number of volunteers, and the percentage or amount of donated resources that are devoted to carrying out the charity’s political activities

The onus is always on the charity to account for its use of resources.

A charity should use a reasonable and consistent method to calculate its expenditures on, or use of resources devoted to, political activities.

For more information on what kinds of records a charity needs to keep, and for how long, go to Keeping records.