Feb 2024 Charity & NFP Law Update
The Disbursement Quota (“DQ”) is the minimum amount that a charity must spend on its charitable activities or qualifying disbursements (including gifts to qualified donees and grants to non-qualified donees). The DQ only applies to the average value of property that is not used directly in charitable activities or administration held by charities that exceeds $25,000 for charitable foundations or $100,000 for charitable organizations. Before January 1, 2023, the DQ obligation was set at 3.5% on the said property. Effective January 1, 2023, the DQ obligation was increased to 5% for assets in excess of $1 million. There are new reporting requirements in version 24 of T3010, Registered Charity Information Return released by Canada Revenue Agency and applies to charities with fiscal periods ending on or after December 31, 2023.
The presentation given by Theresa Man on February 13, 2024, at the Carters/ Fasken Healthcare Philanthropy Webinar explains the ins and outs of DQ and related issues, including how the DQ obligation is calculated, what disbursements would meet the DQ obligation, new reporting requirements on DQ in version 24 of T3010, and other challenging issues in meeting the increased DQ rate. The PowerPoint presentation can be viewed on the Carters website here.