Should our theatre company skip our financial statements this year?
August 31, 2020 6:54 AM Subscribe
We are a small non-profit Canadian theatre company. We are solvent and we have decided to go on a hiatus until things get better. (We are suspending our classes and terminating our lease). Up unti now we've had a professional accountant prepare our financial statements. Given our hiatus, should we ask them to prepare the financial statements for the year just ended (July 2020)?
We would end up saving a couple of thousand dollars. But we're not sure if there are any downsides. When we resume our business, are we going to have to end up doing them anyway?
We would end up saving a couple of thousand dollars. But we're not sure if there are any downsides. When we resume our business, are we going to have to end up doing them anyway?
Hi,
I work for a non profit theatre in US so rules may be different. In the us our financial filings are public record and can be seen by anyone.
I would absolutely do the financials this year, even if not required, especially if you are solvent. If I am considering any kind of relationship with a company (donating to, foundation grant approval, or taking a job there) I will check the financials. If I don’t see them or they are filed late it is a big red flag. I’ll make my donation or commit my life-work hours somewhere else.
Also many companies will have poor financials given the pandemic. If your organization is solvent it will make you look better compared to others in the field.
posted by sol at 7:00 AM on August 31, 2020 [7 favorites]
I work for a non profit theatre in US so rules may be different. In the us our financial filings are public record and can be seen by anyone.
I would absolutely do the financials this year, even if not required, especially if you are solvent. If I am considering any kind of relationship with a company (donating to, foundation grant approval, or taking a job there) I will check the financials. If I don’t see them or they are filed late it is a big red flag. I’ll make my donation or commit my life-work hours somewhere else.
Also many companies will have poor financials given the pandemic. If your organization is solvent it will make you look better compared to others in the field.
posted by sol at 7:00 AM on August 31, 2020 [7 favorites]
I would think the financial statements are especially important this year, given all the upheaval!
posted by mekily at 7:13 AM on August 31, 2020 [1 favorite]
posted by mekily at 7:13 AM on August 31, 2020 [1 favorite]
Yes you should do them! You may need them in the future for all kinds of things including grant applications.
posted by warriorqueen at 7:34 AM on August 31, 2020 [1 favorite]
posted by warriorqueen at 7:34 AM on August 31, 2020 [1 favorite]
I don't know if grant money is part of your current or future plans, but the Canada Council For The Arts includes a paragraph in their page describing their decision making processes that goes:
"A Major Warning is normally issued as part of the peer assessment process, but may also be issued by Council over the course of a funding cycle based on serious concerns about the organization’s health or viability. This may include situations where an organization has failed to maintain financial stability or comply with its legal obligations, including a failure to provide a working environment free from discrimination, harassment and sexual misconduct."
As a non-profit you're going to need to do the books eventually regardless - it's a legal obligation - and there are enough people competing for arts funding in Canada that even the appearance of financial irresponsibility or the implication of insolvency is a competitive disadvantage.
posted by mhoye at 8:07 AM on August 31, 2020 [1 favorite]
"A Major Warning is normally issued as part of the peer assessment process, but may also be issued by Council over the course of a funding cycle based on serious concerns about the organization’s health or viability. This may include situations where an organization has failed to maintain financial stability or comply with its legal obligations, including a failure to provide a working environment free from discrimination, harassment and sexual misconduct."
As a non-profit you're going to need to do the books eventually regardless - it's a legal obligation - and there are enough people competing for arts funding in Canada that even the appearance of financial irresponsibility or the implication of insolvency is a competitive disadvantage.
posted by mhoye at 8:07 AM on August 31, 2020 [1 favorite]
Among other reasons to do it, the organization still needs to be able to demonstrate to CRA that its activities and operations still qualify for the various tax exemptions, etc., that it is allowed as a non-profit organization.
posted by mandolin conspiracy at 9:33 AM on August 31, 2020 [1 favorite]
posted by mandolin conspiracy at 9:33 AM on August 31, 2020 [1 favorite]
This thread is closed to new comments.
posted by MattD at 6:58 AM on August 31, 2020 [2 favorites]