Focus Testing of the Re-Designed Annual Information Return for Registered Charities (Form T3010B)

Qualitative Research

Prepared for the:
Public Affairs Branch
Canada Revenue Agency
FINAL REPORT
January 2008
POR# 220-07
Contract #46558-084791

Prepared by:
Corporate Research Associates Inc.

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Executive Summary

Corporate Research Associates Inc.
Contract Number: 46558-084791/001/CY
Date: 2007-10-17

Registered charities are required to file a return each year in order to comply with the Income Tax Act (ITA) using form T3010A. However, the Canada Revenue Agency has noted that each year, 50% of all charities file their return late while 95% of returns are erroneous or incomplete. Based on these findings, and following informal stakeholder consultations, the Canada Revenue Agency (CRA) Charities Directorate has revised the current form T3010A to be more meaningful and user-friendly. The CRA commissioned Corporate Research Associates to conduct focus groups with end users to test reactions to a mock-up of the redesigned return (identified as form T3010B). The research aimed at identifying areas of the form considered problematic, assessing comprehension, and gathering suggestions on required amendments.

The study consisted of a total of 8 focus group discussions with representatives of registered charities and professionals, primarily accountants, having filed at least one return on behalf of charities within the past year. Two, 2-hour groups were conducted in each of Toronto, Halifax, Montreal, and Vancouver from November 13 to 20, 2007. The analysis from the focus group discussions can be found in the Key Findings section of the report.

Findings from the Focus Testing of the Redesigned Annual Information Return for Registered Charity (Form T3010B) suggest the proposed revised form T3010B is not considered a significant improvement over the current one for medium and large organizations although it is viewed as greatly facilitating the reporting requirements for smaller charities. Overall reactions were generally more positive among representatives of charities than among professionals, which primarily consisted of accountants, who are more likely to complete multiple returns every year, for larger charities. Nonetheless, the proposed revised form T3010B appeared to address most areas of the current form T3010A considered problematic by users, although participants provided specific suggestions to further improve its clarity and usability.

Dividing the information on the T3010B between a simple core form and topic-related appendices clearly contributes to the form's ease of usage. That being said, clarity could be further improved through the use of simpler language, more detailed instructions and examples provided in the guide. Specific comments and relevant recommendations are detailed under the Key Findings section of the full report. Although no specific comments on the visual layout were discussed, it was generally felt that the revised version of the core form is more visually pleasing and de-cluttered than the current one.

Prior to finalizing the revised form, care should be taken to ensure consistent language and terminology is used throughout the core form and the appendices, that adequate detail is given with respect to the use and dissemination of information collected (especially in section B/Form T1235), and that where appropriate, a rationale is given to explain the need to report selected information (e.g. directors/trustees' date of birth; ongoing programs).

The CRA should also explore the possibility of an electronic form that could be filed online, further simplifying the reporting process for professionals and volunteers that complete more than one return on a yearly basis. Another common criticism was the lack of consistency and relevance between the required detailed financial information and charities' financial statements. The revisions made to the financial section were deemed insufficient to simplify the reporting process for medium and large size organizations, while they appeared to simplify the process for smaller charities.

Date modified:

2008-04-04