Your Foundation Choices
Highly Valued. Long-term Funders.
Family foundations are growing in Canada, and Donor Advised Funds (DAFs) are increasingly becoming a popular option.
Setting up a foundation gives you and your family much more control over how your gifts are managed and disbursed. Charities may change over time, and so may your interests or priorities. With a family foundation, you can manage how your gifts are spent, and can create a legacy of charitable giving for many generations.
A Canada Gives Foundation is unique and gives you the easy administration and flexibility of a donor advised fund, but also allows you all of the philanthropic and financial choices you would experience with a traditional private foundation.
Establishing a Canadian Foundation
Professional advisors often comment that their clients have been thinking about setting up a charitable foundation, but find the complexity of the set-up and the on-going governance and reporting duties too onerous. By using a Canada Gives Donor Advised Fund to set up a family foundation, a donor benefits from the ease and simplicity of a DAF structure, while maintaining control over how the charitable funding is managed and disbursed.
Rather than hiring a lawyer, drafting by-laws or trust deeds, all you need to do to set up a Canada Gives Foundation is complete the Foundation account application, and we do the rest. There are no costs to set it up and your Foundation is active immediately.
If you opt for the traditional private foundation that is registered directly with CRA, you must establish a trust or a not-for-profit corporation and then apply to be registered as a charity. In addition to the legal costs, this process may take 6 months or more to complete. A separate Board of Directors must be established and the meeting minutes, board resolutions, policies established and recorded.
Once the Foundation account at Canada Gives is opened, all a donor has to do is fund it with donations and select charities to receive gifts from the foundation. There is no direct relationship with CRA, so there are no liabilities or responsibilities that burden or worry a donor. All financial information is held by Canada Gives, and is not available to the public.
By contrast, if a donor opens a traditional private foundation, all of the records are publicly available through the CRA Charities Directorate. Many private and public organizations also list foundations in directories, and the financial activity and holdings are available to everyone who purchases a directory or looks up the foundation on the CRA website.
Administering Your Foundation
Once a private foundation is active, the operational duties and administration begin. If you set up a Canada Gives Foundation, all of the administration and reporting is done by Canada Gives. You have more time to engage with the charities and programs that interest you, and not on the business of processing and recording each transaction.
Here are just a few of the administrative tasks required to operate a foundation:
- Processing Donations
- Issuing Tax Receipts
- Processing Grants to Charities
- Tracking Grant Receipts
By using a donor advised fund and creating a Canada Gives Foundation, we take care of all the administrative tasks on your behalf.
Annual Reporting to CRA
Canadian foundations are required to complete an Annual Information Return and (audited) financial statements to Canada Revenue Agency (CRA) every year.
With a Canada Gives Donor Advised Fund, your Foundation is registered under Canada Gives, so all of the Annual Audit and Reporting requirements become our responsibility. We take care of these obligations and bear full responsibility with CRA.
Making Grants to Charities
Canada Gives will calculate the minimum amount that your foundation is required to disburse to charities each year to meet CRA Requirements. We place no restrictions on the maximum granting activity each year, so you decide how much to give away from your Foundation if you wish to exceed the minimum level.
You can select any registered charity to receive a gift (called a “grant”) from your Foundation at anytime throughout the year. We are here to facilitate your charitable giving goals and strategies, and do not have any conflicting charitable program of our own that will interfere or override with your personal philanthropic choices. Canada Gives does provide due diligence to ensure that the charity(s) you select is a qualifying donee according to CRA rules, and is in good standing.
Full Disclosure or Complete Anonymity
Unlike a private foundation, whose information is fully disclosed publicly, with a Canada Gives Foundation you have the option to have your contact name and address fully disclosed to each charity, or completely withheld, should you prefer to remain anonymous. It’s Your Choice!
Contact Us Anytime.
If you are interested in starting a Canadian foundation, or simply want to know what is a foundation, contact us and we would be pleased to answer all of your questions.