Spotlight

Disbursement Quota Increase Made Law

Our unprecedented engagement, advocacy, and leadership efforts in 2021 and 2022 culminated with a historic regulatory change for the sector: the disbursement quota increase from 3.5% to 5% for assets over $1M starting January 2023, was made law in December 2022, thanks to our instrumental mobilization.

Following the largest network consultation in PFC’s history – engaging over 70% of our membership – we stepped up to take an elevated leadership role in advocating for our sector’s needs, bringing expertise, and negotiating a diversity of perspectives towards a balanced approach.

With the disbursement quota at 3.5% since 2004, and with increasing and compounded demands on the charitable sector, our most involved network consultation and research experts’ empirical analysis landed us at a 5% increase recommendation, with periodic reviews – a position that balances concerns about increasing charitable spending and avoiding capital erosion. We are proud to have helped shepherd this change, bringing our community together towards a common cause, and were pleased to see several of our key priorities included in the new regulations.

Another key finding of our consultations was that raising the disbursement quota would be an inadequate measure to equalize community access to funding, as it does nothing to remedy the existing funding inequities in the sector. In addition to an increase in funding, we also advocated for mechanisms to encourage greater diversity of distribution, through three enabling conditions.

Some estimates suggest that the new DQ could unlock $300-$500M in funding for the charitable sector, helping to alleviate the chronic underfunding to the 86,000+ registered charities, and many other non-profits and social purpose initiatives across Canada. This shift will have a significant impact in helping causes that advance the common good – from the climate crisis, Reconciliation, and funding equity-seeking communities, to health, education, the arts, and beyond. We will be tracking responses to these changes.

  • Funding non-qualified donees

    We advocated for improving more equitable access to charitable funding by removing direction and control mechanisms in the regulatory system for partnerships with non-qualified donees, which was legislated in 2022 through the new qualifying disbursement regime

  • Data strategy roadmap

    We are also working hard on advocating for increasing impact and mission-related investment and fixing the sector’s data deficit

70%

70% of PFC network engaged in consultation around disbursement quota

  • PFC is a key partner when it comes to ensuring that our regulatory frameworks support and empower the sector’s work. We collaborate on initiatives regularly, because we value their expertise, commitment, and leadership on some of the most important issues facing the nonprofit sector.

    Cathy Taylor
    Executive Director - Ontario Non-profit Network

Learn more about our work on the DQ: