Canada Revenue Agency
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What is the disbursement quota?
The disbursement quota (DQ) is the minimum calculated amount that a registered charity is required to spend each year on its own charitable programs, or on gifts to qualified donees, such as other registered charities. The purpose of the DQ is:
- to ensure that most of a charity's funds are used to further its charitable purposes and activities;
- to discourage charities from accumulating excessive funds; and
- to keep other expenses at a reasonable level.
The DQ is largely based on what happened in the previous fiscal period. Generally, at the end of the year, a registered charity should have a fair estimate of its DQ for the following year.
Calculating the disbursement quota
The Capital Gains and Disbursement Quota Worksheet can be used to help the charity to:
- calculate its capital gains pool and capital gains reduction (if applicable);
- calculate its disbursement quota requirement for the fiscal period covered by the return;
- calculate whether the charity has met its disbursement quota;
- estimate its disbursement quota for the next fiscal period; and
- track its disbursement excesses and shortfalls.
The worksheet is for the charity's use only and should not be filed with the return.
For more information, see Disbursement quota calculation.
The Canada Revenue Agency (CRA) issues a Registered Charity Information Return Summary (formerly the Notice of Confirmation) to acknowledge receipt of charity's information return. The summary includes the following:
- declared or recalculated financial totals such as assets;
- calculation of the charity's DQ for the fiscal period and whether or not it has been met;
- an estimate of the charity's DQ for the next fiscal period; and
- the charity's capital gains pool balance and reduction allowed (if applicable).
The summary does not track a charity's DQ excesses and shortfalls.
