As a registered charity, it's essential to understand and meet the disbursement quota—the minimum amount your organization must spend annually on charitable activities or qualifying disbursements.

This ensures your charity fulfills its obligations and maintains compliance with regulatory requirements.

Here's a straightforward guide to help your charity navigate and meet the disbursement quota.

What is the Disbursement Quota?

The disbursement quota is the least amount your charity needs to spend each fiscal year on:

1. Charitable activities your organization directly carries out.
2. Qualifying disbursements include gifts to qualified donees (other registered charities) or grants to non-qualified donees.

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The quota is calculated based on the value of your charity's assets that are not actively used for charitable work or administration.

Steps to Meet Your Disbursement Quota

1.Calculate Your Spending Requirement

• At the start of your fiscal year, determine the spending amount your charity needs to meet.
• Use the figure on line 5910 of Schedule 6 from the last fiscal period's Registered Charity Information Return (Form T3010).

2.Address Shortfalls or Excesses

• Check for any shortfalls from the previous fiscal year that need compensation.
• If your charity exceeded its quota in prior years, you may apply that excess to the current fiscal period's requirement.

3.Track Your Spending Throughout the Year

Separate your charitable expenditures from other costs, such as:

• Management and administration expenses
• Political activities
• Fundraising costs

Keep detailed records of amounts gifted to qualified and non-qualified donees during the fiscal year.

Completing Form T3010

When filing your annual return, ensure accurate reporting on these key lines:

• Line 5000: Expenditures on charitable programs
• Line 5045: Grants to non-qualified donees
• Line 5050: Gifts to qualified donees

Have You Met Your Disbursement Quota?

Your charity meets its quota if the total spending equals or exceeds the calculated requirement.

Calculate this by summing up:

1. Expenditures on charitable activities (line 5000)
2. Qualifying disbursements, including:

• Gifts to qualified donees (line 5050)

• Grants to non-qualified donees (line 5045)

Subtract any:

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• Designated gifts
• CRA-approved special reductions for the fiscal period (line 5750)

Checklist for Success

☐ Calculate your spending requirement at the start of the fiscal year.

☐ Review any prior shortfalls or excesses to adjust the current year's plan.

☐ Keep detailed records of charitable and qualifying disbursement expenditures.

☐ Accurately complete Form T3010 with proper line allocations.

Fulfilling the disbursement quota helps your charity comply with the Canada Revenue Agency (CRA) and effectively pursue its mission.

Proper planning and record-keeping can help your charity stay on track and focus on making a positive impact. Need help completing your T3010 form? Don't Wait—Reserve Your Spot!

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