New Rules for Long-Term Funding

New Possibilities

Foundation funders are highly valued in the not for profit sector as they provide long term funding support and can make a considerable impact on charitable programs. A Canada Gives DAF Foundation account enables more donors to participate in this type of charitable giving. 

Most long-term funding is directed as an endowment gift, and is invested so that the annual income from these investments can provide year-over-year financial support (grants) to charities. 

Changes in Regulations bring more Flexibility

Prior to the Federal Budget 2010, these endowment gifts were considered “enduring property” and had to be held for at least 10 years, with tight restrictions that resulted in limited or no access to the original capital. Annual gifts to charities were required to be fully spent before the end of the following year.

The amendment to the Disbursement Quota in the Federal Budget of 2010 brought more flexibility for donors who wanted to provide long-term support. 

• Donations can now be held for longer than a year, and disbursed over any period of time. Donors are now able to adopt a short, medium-term or long-term funding strategy with the assets donated into a DAF account. 
• Donors can still direct their endowments gifts to be invested indefinitely and thereby provide “forever funding”, but they can now disburse more of  the capital if they wish