Professional Advisors 2017-11-19T11:04:38+00:00

Professional Advisors

The Community Foundation relies on the donated expertise of allied professionals such as lawyers, accountants and financial planners in developing complex gifts and providing donors with maximum tax relief. They serve as a resource for and champion of local philanthropy.

Here is some information on how we can provide support:

  • Several charitable organizations or causes can be provided for with a single gift
  • The donor can specify a cause without having to name a particular organization
  • During the donor’s lifetime, he/she can alter the charitable purposes of the gift
  • The donor can rest assured that the fund will be professionally managed even if the designated beneficiary may not have financial expertise
  • The donor can be confident that after his/her lifetime, his/her specified cause or organization will be appropriately varied if it ceases to be viable or to serve a useful purpose
  • The donor can rest assured that the fund will remain intact in perpetuity
  • The donor can remain anonymous.

The Community Foundation is not the object of donors’ philanthropy but provides the vehicle to fulfill their charitable objectives. Thus, the Community Foundation is not competitive but develops its assets for, and in cooperation with, all the charitable causes that go to make up the community’s quality of life. The Community Foundation’s role is as a neutral broker in support of other charities.

The Community Foundation allows donors to make a deferred gift to a cause such as children or the arts or even the community in general. This obviates the requirement to specify particular organizations which, over time, may not be viable or well managed. Some may not even be around by the time the gift is realized, after the donor’s lifetime.

Donations are retained, pooled with other funds for investment purposes, protected from inflationary erosion, and the net earnings disbursed annually in support of the organization(s) and/or cause(s) specified by the donor. Should the organization or cause close or become defunct, the Community Foundation Board ensures the earnings are diverted to a current need, as close as possible to the original purpose.

The Community Foundation can also make arrangements should donors wish to support a particular organization but only for a specific period of time. For example, the XYZ Family Fund earnings can be directed to support the ABC organization for 25 years. After that time, the fund becomes unrestricted, allowing the Board of Governors to make grants to new and emerging causes.

Starting up a private foundation requires the donor to create a new organization, establish a board of trustees, obtain registered charitable status from Revenue Canada and report regularly. A donor advised fund at the Community Foundation is far easier and faster to establish and entails no start-up costs. Click here to compare the two options. This advantage often becomes apparent at year-end, when people want to enjoy the tax saving advantages of charitable contributions, but are not certain which charities they would like to support. They can establish a fund at the Community Foundation quickly, often in the course of a single, brief meeting and take the tax deduction for the amount contributed to the fund. These donors can then take their time deciding where they wish to focus their giving from the fund. The knowledge and experience of community foundation staff can be tapped to help with these decisions, which can be made over the course of months or years.

Maintaining a donor-advised fund at the Community Foundation is usually more cost effective than running a private foundation and the problem of intergenerational succession is resolved. In addition, donors are free of the responsibility of monitoring grants made and for fulfilling national and provincial reporting requirements on grants. The Community Foundation staff handles all those tasks.

Recent legislative trends in Canada have tended to discourage contributions to private foundations. Some gifts, such as private company shares, while not acceptable for a private foundation, are welcomed by the Community Foundation and can be used to establish an advised fund in the donor’s name.

As a service, the Community Foundation can manage the endowment funds of other charitable organizations. This is a benefit to the charity in that it provides for professional investment management, guarantees permanence, pools the funds with others for cost efficiency and participation in a broad portfolio with improved prospects for investment performance. In addition, it removes the endowment as an asset in the organization’s books and protects it from potential creditors.

Donors who are considering making a gift to endow their favourite charity like the idea that the funds will be held within the Community Foundation for the perpetual benefit of the charity. This gives them confidence in the fund’s permanence (future Boards will not be able to succumb to the temptation to “borrow” from it), flexibility and sound management. They know their fund can live beyond the organization or the cause and that it relieves the charity of an administrative burden. People who support the local ballet company may be reluctant to give it a large sum of money when solid financial management is not one of its ongoing strengths.

Maintaining a donor-advised fund at the Community Foundation is usually more cost effective than running a private foundation and the problem of intergenerational succession is resolved. In addition, donors are free of the responsibility of monitoring grants made and for fulfilling national and provincial reporting requirements on grants. The Community Foundation staff handles all those tasks.

Recent legislative trends in Canada have tended to discourage contributions to private foundations. Some gifts, such as private company shares, while not acceptable for a private foundation, are welcomed by the Community Foundation and can be used to establish an advised fund in the donor’s name.

In what may be a particularly Canadian phenomenon, many donors, especially those who give large amounts, prefer to have no public acknowledgement, especially during their lifetime. By giving through the community foundation, they are anonymous to the public and, if requested, to the ultimate recipients of their philanthropy.

A Resource Guide for Professional Advisors

The Professional Advisors eResource: a toolkit for helping clients achieve their philanthropic goals, is designed to provide professional advisors with a sampling of planning ideas for consideration in the context of effective estate, tax and financial planning. The Professional Advisors eResource is the property of Community Foundations of Canada and is used with permission.