Permanent Endowed Funds
An endowment fund is a permanent, self-sustaining source of funding in support of a particular community need or social cause. Endowment assets are invested and professionally managed, and each year a portion of the fund’s earned income is distributed in support of the Fund’s cause or purpose. In this way, an endowment fund can grow and provide support for its designated purpose in perpetuity. When you establish an endowment fund, you create a permanent legacy for your cause, your loved one, and your community.
An endowment fund with a Community Foundation means that all the administration, legal, accounting, investment, and governance responsibilities that come with an endowment are taken care of, and you can focus on what matters most to you – your giving.
CFPEI staff make setting up an endowment fund, that you can make ongoing charitable receipted donations to, a simple process. We have a ‘user-friendly’ approach which strives to makes it easy for donors to meet their philanthropic goals in those areas that most matter to them. The CFPEI recognizes that for many people their charitable and philanthropic goals can be highly personal, reflecting one’s values, hopes and traditions.
Anyone can create an endowment fund with the CFPEI. We work with donors to establish endowment funds that support Island people and communities now and into the future. The process is ‘donor focused’; individual donors are provided with a range of endowment giving and granting options. You can be directly involved in decisions about grants or, with your goals in mind, your CFPEI team can determine how your gift will be granted.
When a prospective donor wishes to establish an endowment or make a donation to a community cause or project, CFPEI staff will help you:
- Explore and define your philanthropic causes and goals
- Create an endowment according to your interests (i.e. education, arts, sports, environment)
- Specify the intended beneficiaries of your gift (i.e. individual, organization or community, youth, seniors)
- Choose the most appropriate fund option for you – Community, Designated, Field of Interest, Donor-Advised, Scholarship, Legacy Society (Estate) or combination thereof
- Determine your intended contribution schedule (specific period, during lifetime, through estate planning, etc.)
- Understand the various tax implications (trusts, securities, life insurance)
- Name your fund (donor or family name, individual memorial, anonymous)
Once all the above details are discussed and fully agreed upon, CFPEI staff will prepare a written agreement containing all important details and instructions for final donor review and signature. Fund holders will receive annual fund updates to help donors track the progress of the fund and the grants made from it.
Funds that are provided by donors to charitable organizations directly, rather than being deposited into the pooled funds set up at the CFPEI as endowed funds, are processed through a Flow-through Fund account.
Non-Permanent Endowed Funds
Hosted Organization Fund
The CFPEI provides a Fund Hosting service to CRA qualified organizations wanting to relieved of the responsibilities of investing their own reserve funds. Although the CFPEI informs the Host Organization annually of the amount which would be available by the CFPEI granting policy, the fund remains the property of the Host Organization and may be drawn down in part or in whole at any time.
Donors make donations throughout the year to specified CRA qualified charities via the CFPEI’s Flow-through account. Charitable tax receipts are issued in the year in which they are given.
A Flow-through Fund allows a donor to see their charitable donation have an immediate impact in terms of helping a community cause or concern. A donor may not be ready to make a decision to establish an endowment fund, but may wish to help a variety of community causes.
By working with the CFPEI to ‘flow through’ their donations to organizations who are CRA eligible to receive donations, they can have an immediate impact, while receiving a tax receipt. In some instances, donors make their charitable gifts through security bonds; again, they can receive a tax receipt for the value of the securities, and have the proceeds from the securities distributed among a number of charitable organizations. In short, a Flow-through Fund enables the donor to provide immediate support, while minimizing their tax exposure, and maximizing the impact of their giving in the community.