Endowment Policy
The purpose of this policy is to establish certain internal controls to govern the establishment, administration, and management of general and named endowments of the CFGR.
The acceptance and receipt of donations which are applied to endowment funds within the CFGR shall be governed in accordance with this policy.
- Endowment Fund Definition
An investment fund established in which annual disbursements from the invested capital and/or income are used for ongoing operations or other specified purposes.
- Administration and Investment of the Endowment Fund
Endowment funds of the CFGR are administered and managed in accordance with the CFGR’s Investment Policy.
The investment objectives of the endowment shall be governed by the CFGR’s Investment Policy.
Endowment expenditures shall be limited and governed in accordance with Section 6 of this policy. Excesses shall be reinvested and applied to the endowment capital.
- Endowment Fund Contributions
A letter of intent, donation pledge form, terms of bequest, or other confirmation of the donor’s intent in respect of a donation to a CFGR endowment fund shall be provided for all endowment donations. Such documentation shall be held and maintained by CFGR. In the event of a fundraising campaign, a donation form shall be created disclosing relevant information required to issue an official donation receipt.
Confirmation of the designated purpose of the endowment fund for which the donation is to be applied shall be provided to all donors by the CFGR.
Donations may be made in cash or other eligible form and official donation receipts will be issued for all eligible donations in accordance with the Income Tax Act (Canada).
- Designated, Named Endowments
A designated, named endowment may be established subject to the approval of the CFGR Board of Directors. The amount required for an individual endowment will depend on the objectives to be accomplished, and will be negotiated between the donor and the Executive Director of the Foundation.
Any amount may be contributed for any previously-established designated, named endowment subject to the ability of the CFGR Board of Directors to cease accepting contributions for any designated, named endowment at its full discretion.
- Endowment Agreements
An executed endowment agreement setting out the terms of the gift will be required to establish any designated, named endowment.
Any endowment agreement should include but is not limited to the following terms:
- Definition of the purpose of the endowment;
- Donor and funding information;
- The conditions and treatment of capital and income from the endowment and the distribution of funds;
- A provision allowing the CFGR Board of Directors to vary the terms or the purpose of the endowment if it becomes impossible or impractical to carry out the stated purposes or to operate under the terms;
- A provision allowing the CFGR Board of Directors to encroach on the capital of the endowment in order to meet the charitable purposes of the designated purposes of the fund and/or in furtherance of the mission of the CFGR; and
- A provision allowing the donor and the CFGR to amend any executed agreement by mutual consent;
- References to the appropriate provisions of this policy.
Where such named endowments with non-established designations are established by bequest and without a supporting endowment agreement, the CFGR Board of Directors will determine the best use and designation of the endowment funds in accordance with charitable purposes of the CFGR, provided it can do so without a request for direction from the Court.
- Endowment Spending
The objective of endowment spending is to satisfy the charitable purposes and administrative requirements associated with the endowment and to meet the CFGR’s disbursement requirements under the Income Tax Act.
The spending or pay-out rate available to the endowment fund shall be established each year by the CFGR Board of Directors.
Pay-out from the endowment shall be distributed to the CFGR not less often than annually, and such income shall be used for the charitable purposes designated by the donors or, if undesignated, at the discretion of the CFGR Board of Directors, and for administrative expenditures associated with the endowment.
The CFGR’s Board of Directors shall have the power to encroach on endowment capital on an “as needed” basis, in order to meet the charitable and/or administrative expenditures of the CFGR in furtherance of its objects.
In the event that it becomes impossible or impractical to continue the endowment for the designated purpose or under the stated terms, the CFGR Board of Directors may at its full discretion modify the terms or re-designate the purpose of the endowment and apply the endowment income and capital to such other purposes as deemed appropriate by the CFGR Board of Directors in furtherance of its objects.
The CFGR shall use a total return on investment approach that does not distinguish between capital and income. Capital gains may be included in income for the purposes of distribution and endowment spending. Unrealized capital appreciation shall not be treated as income because it may not represent actual income available for distribution.
- Documentation
Decisions of the CFGR in respect of this Endowment Policy shall be appropriately documented in the minutes of the meeting.
