A non-profit’s board of directors has many responsibilities throughout the year. If you’re on the board of a non-profit, here’s a checklist to help you remember some of your key responsibilities!
This article is for non-profits incorporated under Quebec law.
Other rules may apply to federally incorporated non-profits. To learn more, check out our article Non-profits: Incorporate With the Quebec Government or the Federal Government? or Corporation Canada’s website.
Review and keep track of the executive director’s work
If your non-profit has an executive director, the board must review and keep track of this person’s work.
To do so, you can ask the executive director to update you on the organization’s activities during a board meeting. You can also choose to do a performance review.
For more information on executive directors, check out our article Quebec Non-profits: The Role of the Executive Director.
Make decisions for the non-profit
Throughout the year, you have to make decisions for the non-profit. Examples include
- choosing the organization’s president, vice-president, secretary, and treasurer,
- hiring the executive director,
- buying or selling things, or
- signing contracts.
Keep records for the non-profit
Your non-profit must usually keep its records at its head office in Quebec. These records include things like
- your organization’s letters patent and by-laws, and any changes you make to these documents over time,
- the members’ meeting minutes,
- the directors register,
- the members register.
The non-profit’s records should also include documents keeping track of its activities. For example, if the board decides to sign a contract, the records must include the contract and the meeting minutes detailing the decision to sign the contract.
File declarations with the Registraire des entreprises
It’s the board’s responsibility to make sure the Registraire des entreprises (Quebec business registrar) always has up to date information about the non-profit. Whenever something changes, you must file a current updating declaration within 30 days. For example, you have to file this declaration if your organization changes its head office’s location or if a director leaves and someone else replaces them.
You also have to file an annual updating declaration, even if nothing changes within your organization.
File information returns with the provincial and federal governments
Non-profits usually don’t pay income tax. But you still need to send a few documents to Revenu Québec (Quebec’s revenue agency) and the Canada Revenue Agency.
Filing returns with Revenu Québec
Your non-profit must file an information return at the end of each fiscal year. The fiscal year is the 12-month period covered by your organization’s financial statements
In most cases, non-profits need to file the Information and Income Tax Return for Non-Profit Corporations (CO-17.SP) within six months of the end of their fiscal year.
In some cases, a non-profit may need to file another type of return. For more information, check out Revenu Québec’s website.
Filing returns with the Canada Revenue Agency
You must generally file a T2 – Corporation Income Tax Return, or a T2 Short Return.
In some cases, you also need to file a Non-Profit Organization Information Return (T1044) with the Canada Revenue Agency. For example, if your non-profit’s total assets are worth over $200,000 at the end of a fiscal year, you must file an information return within six months.
For more information, check out the Canada Revenue Agency’s Income Tax Guide to the Non-Profit Organization (NPO) Information Return.
If your organization is a registered charity, you have to file the Registered Charity Information Return (T3010) instead.
Approve the non-profit’s financial statements
The board must approve the organization’s financial statements and present them to the non-profit’s members, usually during the annual general meeting. These statements are important, so make sure you understand them well before presenting them.
There are many guides to help you understand financial statements. For example, CPA Canada offers a free one on their website.
Prepare the non-profit’s budget
At the end of each fiscal year, your non-profit must prepare a budget for the upcoming year. This might be one of the executive director’s duties, if your organization has one. Even so, the board can review the budget the executive director prepared and make changes if necessary.
Make sure the board has enough directors and that they’re well-trained
You must make sure the board has enough directors. All directors also have to be well-trained so they can properly fulfill their role.
If a director doesn’t plan on seeking re-election, you can start looking for someone to fill their spot after the term ends. Some non-profits follow a specific procedure to choose new directors and may even have a nominating committee.
New directors have to be trained. For example, you can ask them to read your non-profit’s letters patent, by-laws, and policies.
As long as you’re on the board, you and the other directors can attend training that’s relevant to your role and your non-profit’s activities. Training can help you develop your skills as a director and stay up to date.
For more information on your role and duties, check out our article Quebec Non-profits: The Role of the Board of Directors.
Prepare an annual report
At the end of each fiscal year, you usually have to prepare an annual report documenting the non-profit’s activities and finances over the last year. The annual report also gives updates on the organization’s ongoing projects.
Annual reports can be very different depending on the non-profit. But, most of them include information about things like
- the people who work for the organization,
- where the organization’s funding comes from, and
- its completed and ongoing activities.
You can present this report to the members of the organization during the annual general meeting.
Hold an annual general meeting
Your non-profit needs to hold an annual general meeting with its members. Your by-laws may cover the details of how and when this meeting should take place. If not, the law says that your members need at least ten-days notice.
Your organization’s annual report and financial statements for the last fiscal year are usually the main topics of this meeting, but you can also discuss other points that the board considers relevant.
The annual general meeting can also be an opportunity to elect or re-elect certain people, like directors. Members can also choose your organization’s auditor for the upcoming year.
Assess risks on a regular basis
Risk assessment is an important part of running a non-profit. By being proactive and anticipating what can go wrong, you may have a better chance of preventing certain risks (or at least reducing their impact on your organization).
For example, you can do this by
- going over your organization’s financial statements, receipts, and bank statements to make sure your finances are in order,
- setting up a risk management policy, and
- reading your insurance policies to see if they cover certain events like property damage and lawsuits against the non-profit or its board.
For more information on risk management, check out Imagine Canada’s website.
Update the non-profit’s by-laws and policies
It can be a good idea to review and update your by-laws from time to time. This allows you to make sure they still meet the law’s requirements and your organization’s needs.
You can do the same with your policies. Most organizations have internal policies on things like
- sexual harrassment,
- conflicts of interest,
- security measures in the workplace,
- using information technology within the organization, and
- intellectual property.