Increase The Grants

What DQ policies is GIV3 advocating for?

GIV3 is advocating for a DQ set at 10% as a fair and responsible tax policy

GIV3 believes Canada’s current rules allow too much tax-assisted charitable capital to remain on the sidelines instead of being deployed for current charitable needs. The current DQ rate is not meeting the intended purpose to prevent the accumulation of assets in foundations. The purpose of foundations is not to exist in perpetuity nor to outperform the financial markets.

Furthermore, GIV3 believes a low DQ is not a valid justification to preserve the longevity of some foundations since all foundations are allowed to fundraise to enhance their future endowments (which public foundations do so well).

GIV3 has three proposed reforms:

  1. 01

    Raise the annual Disbursement Quota to 10% as a fair and responsible tax policy

    • GIV3 calculates that a 10% DQ would trigger an incremental $6.5 Billion, annually. – This is based on a foundation-by-foundation review of their recent T3010 filings for their recent distribution ratio (in 2024), and the incremental gain if each below 10% was obliged to disburse 10%.
    • Approximately 40% of current foundations (reporting Lines 4140 and/or 5900) already equal or exceed the 10% level and would not be affected by this proposed increase.
  2. 02

    Apply a minimum DQ to each DAF account

    Require each individual DAF account to distribute at least a minimum amount rather than relying only on an organization-wide calculation at the hosting foundation level.

    • “WellFunded” reports there are about 75,000 individual DAF accounts, giving about $2 Billion, representing a payout rate of 11.5%.
    • Looking at publicly available data (including WellFunded, The Philanthropist Journal) Gemini estimates an incremental $300 Million each year, if each DAF account had a minimum 10% DQ applied to it.
  3. 03

    Limit the use of prior “excess” disbursements to reduce future obligations

    Preserve reasonable flexibility while preventing large historical excesses from substantially neutralizing a future increase in the statutory minimum.

    • For the first year of the revised 5% DQ, in 2023, GIV3 estimates (based on T3010 analysis) that approximately $1.1 Billion of carry-forwards was used to reduce 2023 granting obligations. (See the impact of the 2023 increase.)

GIV3 argues that these reforms would redirect billions of dollars more to current social and environmental needs with zero cost to the federal Budget. This is a policy to better reallocate taxpayer-assisted charitable assets, in a timelier and more meaningful manner, within the lifetime of taxpayers.