Nonprofit organizations and registered charities need the same bookkeeping basics as any business: reconciliations, receipts and monthly statements. On top of that, they answer to donors, funders and boards, and registered charities report publicly to the Canada Revenue Agency (CRA). Money given for a specific purpose has to be tracked separately. Charities file an annual T3010 Registered Charity Information Return. And many organizations can recover part of the GST/HST they pay through the public service bodies' (PSB) rebate.
This guide covers bookkeeping basics for Canadian nonprofits and charities: the difference between a registered charity and a nonprofit organization, fund accounting, restricted grants and donations, official donation receipts, the T3010, the PSB rebate and practical month-end routines. Tax facts are drawn from CRA sources, including the CRA's charities guidance on the T3010 and books and records, and Guide RC4034 GST/HST Public Service Bodies' Rebate, as of October 2026. This is general information; your accountant, auditor or legal adviser can confirm the rules that apply to your organization.
| Registered charity | Nonprofit organization (NPO) | |
|---|---|---|
| Registered with CRA | Yes, with a charity registration number | No charity registration |
| Can issue official donation receipts | Yes | No |
| Annual CRA return | T3010 | Possibly the T1044 NPO information return, depending on size and income (confirm with CRA) |
| Income tax | Generally exempt | Generally exempt if it meets the Income Tax Act conditions |
| Disbursement quota | Yes | No |
| PSB rebate | Yes (charities qualify) | Only if a "qualifying NPO" under the GST/HST rules |
Both may also have provincial obligations, such as annual returns under provincial corporations or charities legislation. These vary by province.
Fund accounting tracks money by purpose. Typical funds:
In practice, small organizations often use classes, locations or tags in their accounting software rather than separate ledgers, so every revenue and expense line carries a fund.
Example numbers for illustration only. A community food bank receives a $50,000 grant restricted to a youth nutrition program.
| Item | Restricted fund: youth nutrition |
|---|---|
| Grant received | $50,000 |
| Food purchases | ($22,000) |
| Program coordinator wages | ($15,500) |
| Supplies | ($3,200) |
| Unspent balance | $9,300 |
At year-end, the $9,300 is reported as unspent restricted money (or deferred, depending on the accounting framework). It isn't available for general operations. Many funders want a report like this, so tag every program transaction to the right fund as you go.
| Revenue type | Bookkeeping considerations |
|---|---|
| Unrestricted donations | Record with donor and receipt details |
| Restricted donations and grants | Tag to the fund; follow agreement terms |
| Multi-year grants | Track received versus spent; the accounting treatment depends on your framework |
| Fundraising events | Record gross revenue and costs separately |
| Membership fees | Note any GST/HST status (some are exempt, others taxable) |
| Program fees | May be exempt or taxable depending on the supply |
| Government funding | Track by program; matters for qualifying-NPO status (see Step 5) |
Your accounting framework (for many organizations in Canada, accounting standards for not-for-profit organizations, as decided with your accountant) determines how restricted contributions are recognized. Your bookkeeping just needs to tag them consistently.
Only registered charities (and other qualified donees) can issue official donation receipts. CRA guidance sets out what a receipt must contain, including the charity's name, address and registration number, a serial number, the date, the donor's name and address, the eligible amount, and other required details.
For bookkeeping:
Example numbers for illustration only.
| Item | Amount |
|---|---|
| Ticket price | $250 |
| Fair market value of dinner (advantage) | ($80) |
| Eligible amount for receipt | $170 |
The full $250 is revenue in the books. The receipt shows the eligible amount of $170.
According to the CRA:
The T3010 groups revenue and expenses in particular ways, for example receipted gifts, gifts from other charities, government funding, charitable program spending, management and administration, and fundraising. Map your chart of accounts to the T3010 lines so the return can be filled out directly from the books.
| Your accounts | T3010 grouping (simplified) |
|---|---|
| Donations – receipted | Receipted gifts |
| Grants – federal, provincial, municipal | Government revenue |
| Gifts from other charities | Gifts from qualified donees |
| Program wages, program supplies | Charitable programs |
| Office rent, accounting, admin wages | Management and administration |
| Event costs, campaign mailings | Fundraising |
Shared costs (for example, a director who runs programs and handles administration) should be allocated on a reasonable, documented basis.
Registered charities must meet an annual disbursement quota, as calculated under CRA rules, generally based on property not used in charitable activities. Your accountant can calculate it, but the books need to identify investments and assets clearly.
Many supplies made by charities, and some made by NPOs, are exempt under the Excise Tax Act. Exempt supplies mean no GST/HST charged and no ITCs on related costs. Some activities, such as certain sales of goods, can be taxable.
According to Guide RC4034:
Example numbers for illustration only. A registered charity in New Brunswick (HST 15%: 5% federal part and 10% provincial part) has $40,000 of eligible purchases in a claim period on which it paid HST and can't claim ITCs.
| Item | Amount |
|---|---|
| Federal part of HST (5%) | $2,000 |
| Rebate of federal part (50%) | $1,000 |
| Provincial part of HST (10%) | $4,000 |
| Provincial-part rebate | Per RC4034 table for charities in NB |
Example numbers for illustration only.
| Item | Amount |
|---|---|
| Gross donations | $5,000 |
| Platform fees | ($175) |
| Deposit to bank | $4,825 |
Recording only the $4,825 understates both donation revenue and fundraising costs, and it makes the receipt register impossible to reconcile.
The CRA's charities guidance requires registered charities to keep adequate books and records in Canada, including financial records, copies of donation receipts and governing documents. Most records must be kept for at least six years, and some, like governing documents and minutes, for longer. Keep board minutes that approve budgets, major spending and fund transfers.
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Within six months of the charity's fiscal period end, according to the CRA.
The CRA doesn't require audited statements for the T3010, although provincial law, your bylaws or funders may.
Only registered charities and other qualified donees can issue official donation receipts.
According to RC4034, 50% of the GST and of the federal part of the HST. The provincial-part rebate depends on the province and type of organization.
A method of tracking money by purpose, such as unrestricted, restricted, endowment and capital funds, so you can show funders and boards how each fund was used.
Nonprofit bookkeeping rests on fund tracking, accurate donation receipting, a chart of accounts mapped to the T3010 and consistent recording of GST/HST paid for the PSB rebate. With those in place, funder reports, board meetings and CRA filings come straight from the books.