Budgeting for greater disbursements in 2023

Mark PetersenDisbursement Quota

Changes to the Disbursement Quota (DQ) will impact private foundations as they budget for their giving in 2023. Imagine Canada advises private foundations to consider new legislation coming into effect next year. They state:

As per the Federal Budget released in April 2022, the disbursement quota – the percentage that registered charities such as foundations are required to disburse each year toward charitable activities – is increasing from 3.5% to 5% on assets over $1 million dollars in January 2023. This is the first such adjustment in over 10 years, and its purpose is to ensure charitable donations are being actively invested into our communities. While Imagine Canada would prefer to see a scaled disbursement quota, the planned shift will most likely unlock a significant amount of grant money. Our research shows that if the disbursement quota had been 5% instead of 3.5% in 2019, approximately $500 million additional dollars would have been available to the sector – mostly from the assets of private foundations. With increases in foundation assets since then, that figure could be even greater in 2023 and beyond.