Government launches consultations on boosting charitable spending in our communities
August 6, 2021 - Ottawa, Ontario - Department of Finance Canada
Canada’s charities, non-profits, social enterprises, and other organizations work constantly to address hunger, improve socioeconomic outcomes for diverse Canadians, and keep communities connected and informed.
To make this work possible, every year, charities are required to spend a minimum amount on their charitable programs or on gifts to qualified donees. This is known as the “disbursement quota” and it ensures that charitable donations are being invested into our communities.
While most charities meet or exceed their disbursement quotas, a gap of at least $1 billion in charitable expenditures in our communities exists today. Despite significant growth in investment assets of foundations in recent years, grant-making and other charitable activities of many foundations have not kept pace.
As announced in the recent budget, an increase to the disbursement quota could significantly boost support for the charitable sector, benefitting those that rely on its services, including the most vulnerable members of Canadian society.
To this end, today, the Government of Canada, through the Department of Finance, is launching consultations with stakeholders on potentially increasing the disbursement quota and updating the tools at the Canada Revenue Agency’s disposal to enforce the disbursement quota rules, beginning in 2022.
Full details can be found in the related background paper. Stakeholders are invited to provide their comments by September 30, 2021. Details on how to participate can be found in the consultation notice linked in the related products below.
The government will also be consulting with representatives from the charitable sector through the Advisory Committee on the Charitable Sector, which provides advice to the government on important and emerging issues facing registered charities.
There are more than 86,000 registered charities in Canada, each carrying out activities in support of one or more of the four recognized categories of charity—the relief of poverty, advancement of education, advancement of religion, and other purposes beneficial to the community.
The Government of Canada understands that registered charities are an important part of Canadian society, and it encourages Canadians to donate generously through the Charitable Donation Tax Credit for individuals and deduction for charitable donations for corporations.
In 2019, Canadians claimed charitable donation tax receipts for more than $11 billion, and corporations claimed gifts of approximately $4 billion.
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Department of Finance Canada
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