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A community foundation is a collection
of endowed funds established by individuals and corporations
– a community of donors – to enhance the quality
of life in a particular area. These funds are pooled and their
investment is supervised by a board of directors made up of
community leaders. The resulting investment returns become
funds available for distribution to support charitable activities
in the community.
The first Canadian community foundation was
created in 1921 in Winnipeg. By 2003 Canada had approximately
120 community foundations holding aggregated assets of $1.8
billion. The grants from the investment income are affecting
millions of Canadian lives. Community foundations are the
fastest growing form of philanthropy in North America.
In 1975, members of the Vernon Rotary Club
saw a need for an organization which would allow individuals
and organizations to work cooperatively to enhance the quality
of life for the people of the North Okanagan Regional District.
Between 1975 and 1993, the funds held by the
Foundation grew modestly from the initial donation of $1,000
to $529,000. In 1994 a single donation of $503,000 by Robert
D. McLean allowed the Foundation to quickly surpass the $1
Million plateau. Since then growth has been steady and the
Foundation finished 2002 at $5.1 Million in capital.
As a result of the investment returns, the
endowment funds of the Foundation have provided over $1.3
million in grants to charitable organizations in the community
– in support of arts, culture, heritage, education,
health, recreation, community celebrations, social services
and sports. It is important to note that the original pool
of gifted funds is never spent, only the returns earned on
the gifts.
Enhancing the quality of life in the communities
of the North Okanagan.
The Community Foundation of the North Okanagan
is dedicated to improving the quality of life in the region
by distributing the returns from a permanent, ever-growing
pool of funds.
- Exercises philanthropic leadership in identifying
and addressing community needs and opportunities;
- Attracts and manages charitable gifts of
cash, bonds, shares, real estate, pledges, bequests, memorials
and life insurance policies in the form of permanent endowments;
- Invests these pooled funds prudently, and
uses the returns to make creative grants to deserving charitable
organizations for the benefit of all types of activities:
community services, arts and culture, education, health,
and seniors and youth.
The Foundation is a catalyst and resource for
philanthropy throughout the region. It is a vehicle for caring
citizens who want to give something back to their community
in perpetuity, both during and after their own lifetime.
The Foundation is governed by a volunteer
Board of Directors consisting of 15 directors. Directors serve
a two year term.
The Board governs the Foundation within the
regulations of the Society Act of British Columbia and those
of the Canada Customs and Revenue Agency (CCRA) relating to
public foundations.
Investment management services are provided
by professional managers within the policy guidelines established
by the Board. Approximately 40% of pooled assets are invested
in equities and 60% in bonds. Performance is monitored quarterly
by the Foundation’s Investment Committee.
The Foundation is administered by professional
staff. Operating expenses are paid from administrative fees,
and from gifts designated by donors.
Donations are welcomed for the Community
Endowment Fund, as well as for Designated, Field of Interest,
Donor Advised and Scholarship Funds. Descriptions of these
types of foundation funds are included in Section D of this
handbook and a listing of all the funds (January 2003) is
included in Section L.
You or your client normally initiates the
process by advising the Foundation of your wish to establish
a fund. The information required includes the name of the
proposed fund, its purpose, and whether it is intended to
be open to other donors, or closed.
We discuss the many options available with you
and then assist with the preparation of a Fund Agreement Form,
tailored to your client’s interest and needs, which
requires the donor’s signature and our Board approval.
Any desired restrictions of the fund’s
distributions must be placed on the fund at the time of its
creation. The fund can be added to at any time, but the initial
purpose or purposes must remain consistent with the stipulations
in the original agreement.
Should the donor’s interests change over
time, additional funds can be created to achieve alternative
charitable purposes. A Fund Agreement Form will be created
for each new fund.
Certain minimum contributions apply due to the
fact that an endowment fund is created as a permanent entity.
The minimum can be achieved over an agreed-upon period of
time. At present, the Foundation’s Board has established
a minimum of $5,000 for the following types of endowment funds:
- Scholarship Fund
- Field Of Interest Fund
- Designated Fund
- Donor Advised Fund.
Non-endowment funds (flow through funds where
the gift is distributed in the year it is donated) are considered
on a case by case basis.
Contributions to funds can be made using
cash, securities, real estate or life insurance. Donation
receipts will be issued for all gifts which may be used for
income tax purposes.
No fees are charged to establish a fund
in the Foundation.
Investment management and custodial fees
are funded through the returns earned on investments.. Foundation
operating costs are funded by an annual charge of 1% of market
value of capital and are paid from investment returns.
Donors will receive our Annual Report which
provides a review of the Foundation’s activities over
the last year. This report is published in the Morning Star
Newspaper annually and can be found on our website (download
our Financial Statements). Donors can also request a copy
of our audited financial statements. The donor will also receive
periodic reports on grants made from their fund.
The donor’s name will be added to
our mailing list to receive newsletters and other information
about the Foundation that may be provided from time to time.
They are also welcome to meet with the Executive Director
or members of the Board to discuss any aspect of their charitable
giving.
(Some donors prefer to either remain anonymous.
The Foundation respects their wishes at all times.)
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