In this article “Should the disbursement quota for registered charities in Canada change or be left alone?”, Mark Blumberg and Jessie Lang discuss the disbursement quota (DQ) and the Department of Finance’s consultation on whether the Income Tax Act should be amended to increase the DQ.

The article discusses the excuses made by some to leave the DQ at 3.5% and why those excuses are not convincing.  It also discusses a number of compelling reasons that the DQ should be increased.  Furthermore, it situates the DQ decision in the context of the significant tax benefits provided to registered charities and the harm that having $95 billion in private foundation assets sitting idle while charities are dealing with very significant challenges.   Failure to increase the DQ could result in further damage to the reputation of the charitable sector, especially private foundations.

The article encourages those who care about the financial capacity of charities to respond to COVID-19 and other challenges to write to the Department of Finance as part of their consultation.