Summary Policy

Date
September 3, 2003 (Revised September 13, 2005)

Reference Number
CSP - D14

Key Words
Disbursement quota (excess, shortfall)

Policy Statement

The disbursement quota is a specific amount that a registered charity must spend each year on its charitable activities or as gifts to qualified donees. This amount varies according to a charity's designation.

A disbursement excess is created when a charity spends more on charitable activities or by way of gifts to qualified donees, than it is required to by its disbursement quota for that year. An excess can be carried back one year to offset a shortfall in that period. A charity can also draw on an excess for up to five of its following fiscal periods to help it meet its disbursement quota.

A disbursement shortfall is created when a charity spends less on charitable activities or by way of gifts to qualified donees, than its disbursement quota for that year. A charity can draw on previous years' excesses to cover a shortfall. If no excesses are available to draw on, a charity can try to spend enough the following year to create an excess that will make up for the shortfall. However, continuous shortfalls can lead to revocation of the charity's registration.

References

• Disbursement Quota Reduction, CSP - D03.
• Disbursements, CSP - D04.
• Qualified Donee, CSP - Q01.
• Revocation, CSP - R12.
• Disbursement of Funds to a Qualified Donee, CPC - O14.
• Portion of 10-year Gift of Shares Disposed of Included in Disbursement Quota Calculation, CPC - O21.
• Disbursement Quota, CIL-1994-003, CIL-1996-002, CIL-1998-018, CIL-1999-014, CIL-2000-012, CIL-2000-020, CIL-2001-008, CIL-2001-015, CIL-2002-001.
• Completing the Registered Charity Information Return, T4033A.
• Capital Gains and Disbursement Quota Worksheet, T1259.
• Registered Charities and the Income Tax Act, RC4108.
• Registered Charities: Application to Reduce Disbursement Quota, T2094.
• Income Tax Act, R.S.C. 1985 (5^th supp.) c. 1, ss. 149.1(1), (20) and (21).
• Income Tax Regulations, C.R.C. 1978, c. 945, ss. 3701 and 3702.