- What is a Legacy?
- What is Philanthropy?
- The Lac du Bonnet & District Charitable Foundation – What Is It?
- How did the Lac du Bonnet & District Charitable Foundation get started?
- What is the role of the Lac du Bonnet & District Charitable Foundation?
- How Does the Lac du Bonnet & District Charitable Foundation Work?
- What is a Fund in the Lac du Bonnet & District Charitable Foundation?
- How is a fund Established?
- What Fees are Charged?
- Can donors combine their gifts?
- How are Grants Made?
- What are the Advantages of using a Community Foundation?
A legacy is a gift or bequest usually given through a will and is money or other personal property that can be of value to the receiver. A legacy can also be something transmitted by or received from an ancestor or predecessor or from the past. The ideas and work of the ancient philosophers can be considered as a legacy in that still guides us today. For many people their children are for them a legacy that is passed to the future.
Philanthropy is the act of donating or giving private money, goods, services, time and/or effort to support a socially beneficial cause, with a defined objective and with no financial or material reward to the donor. Philanthropy may encompass any altruistic activity intended to promote good or improve human quality of life. Philanthropy is usually the act of giving while one is still alive while a legacy or bequest is giving through ones will.
A community or charitable foundation is a registered public charity that is non-political, non-religious and it is self-governed. There is a Board of Directors, which is comprised of up to 12 local citizens. Usually, these board members are already recognised as leaders and are frequently involved with community activities.
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 a board of directors supervises the resulting investment portfolio. The income from the portfolio is made available for distribution to support charitable activities in the local community.
The Lac du Bonnet & District Charitable Foundation is such a local charity, which is focused on the creation of a group of permanent endowment funds. These funds are invested and the investment proceeds are then available for distribution to the community of Lac du Bonnet for the good of the community. The Foundation will become a general provider for several types of charitable funding in the Lac du Bonnet trading area.
The Lac du Bonnet & District Charitable Foundation will attempt to create a better community today, tomorrow and forever by:
- Providing donors with choices through a wide range of giving options, appropriate recognition and a full range of charitable causes they may wish to support.
- Helping professional advisors provide added value to their clients as far as charitable giving is concerned.
- Making responsible grants with a commitment to funding and supporting all facets of our community. With our broad view of community needs and opportunities we are uniquely placed to make grants to a wide range of charities throughout the general Lac du Bonnet area.
- Participating as knowledgeable partners in community life, the Foundation contributes a level of broad yet local and regional charitable expertise.
The original idea for the Lac du Bonnet & District Charitable Foundation came from a local resident, Dr. Bob Rutherford, who in his later years spoke of the need for creating a charitable foundation in the Lac Du Bonnet area. Dr. Rutherford had been a long time resident in Lac du Bonnet having been either a seasonal resident or permanent resident since the 1930’s. Dr. Rutherford had maintained a farming operation as a hobby since the early 1950’s. He had been very active in the Lac du Bonnet area in the health field and enjoyed curling, golf and many other community activities. Dr .Rutherford passed away before his dream became a reality.
Dr. Rutherford’s son, Mauri, a lawyer, promised his father that he would assist to get a community foundation established. A name had been applied for and reserved for the foundation. The basic framework for the incorporation of the Foundation and the charitable status application had been prepared. The formation of a foundation still did not occur as it was still only a dream that a few individuals had for the community.
More recently, in about the year 2000, local resident Cliff Zarecki began working with Gerald Hawranik, Member of Legislative Assembly for Lac du Bonnet, on the concept of starting a foundation in Lac du Bonnet. Gerald Hawranik was instrumental in starting the foundation in the Beausejour area.
Cliff met with several Lac du Bonnet volunteer organizations including the Lions and the Knights of Columbus and organized presentations about a foundation. These presentations were given by Mr. Hawranik and the executive director of the Thomas Sill Foundation. At that time a critical mass of interested people could not be established to enable the idea to proceed. The matter was delayed for some time for various reasons. More recently, it became known that another group was also interested in getting a foundation established in Lac du Bonnet.
In 2006 Rural Municipality of Lac du Bonnet Councillor Gus Wruck contacted Cliff Zarecki to discuss trying once again to get a foundation established in Lac du Bonnet. Mr. Wruck and Mr. Zarecki organized meetings. Mauri Rutherford became aware of the renewed effort to establish a local foundation, contacted Cliff and Gus, and offered his support. Contact was made with that group and both groups joined forces and utilized the reserved name, the corporate vehicle and the earlier work done to establish the Lac du Bonnet & District Charitable Foundation.
During this time many other people had also recognised the need for a community foundation and had discussed the possibility on numerous occasions. The result was that the renewed impetus of the joined forces expedited the creation of the Foundation. This time the required critical mass of interested people was established which included the initial 10 members of the Lac du Bonnet and District Charitable Foundation Board of Directors. The foundation became a reality in 2008 when it was legally incorporated and charitable status with Revenue Canada was obtained.
The Foundation has three main roles:
- The Foundation will offer a wide range of giving options, professional management of the donated funds and protection of the integrity of the donors’ gifts into perpetuity.
- The Foundation will make grants to community and other organizations for the good of the community. The Foundation will have a very diverse, broad reach mandate. The Foundation will offer a variety of donor directed options for specific grant making. In addition, through the undesignated funds, the Foundation, will with a broad view of community needs and opportunities, make grants to a wide range of charities throughout the general Lac du Bonnet trading area.
- As knowledgeable partners in community life, the Board of the Foundation is in a position to help our citizens fulfill their charitable goals of providing a legacy to the community.
- The Board will be a catalyst for leadership to the community on issues of charitable nature during the grant making process.
These roles allow the Community Foundation to be a catalyst and resource for philanthropy throughout the Lac du Bonnet area. It is a vehicle for generous citizens who want to give something back to the community both during and after their own lifetime.
The Foundation is governed by a volunteer Board appointed by a Nominating Committee which is a sub-committee of the Board of the Foundation. The President of the Board will always serve on the Nominating committee.
Directors will typically serve a three-year term to a maximum of two terms. The Board governs the Foundation within the By-Laws of the Foundation, regulations of the Community Foundation Acts and those of Canada Revenue Agency relating to public foundations.
Although the Investment management services will be professionally provided, the exact provider is not yet known. It is anticipated that these services will be provided by the Winnipeg Foundation.
The Winnipeg Foundation is administered by professional staff. Operating expenses are paid from their administrative fees,
A fund is the term used to describe a donor’s contribution. That contribution will, in the majority of cases, be held in perpetuity in a permanent endowment fund. This means that the capital will not be touched but will be held permanently and only the income made available for distribution.
For investment purposes, all funds are pooled together. However, as part of the overall stewardship of the donations placed in the Foundation’s care all funds are accounted for separately. Investment income is calculated quarterly and allocated proportionately to each fund. A fund begins to benefit from pooled income from the first full quarter but a distribution is not made until the donation has been invested for a full year.
Certain minimum fund levels apply due to the fact that an endowment fund is created as a permanent entity and the degree of complexity inherent in certain fund types. The minimum can be achieved over an agreed period of time. The Board has established the minimum fund levels for each fund. More details about each of the funds are shown on the Donor Info page.
A donor may establish a Pledged Fund with a minimum of $500 with a pledge to increase the required value of the minimum for the type of fund over an agreed period of time. Funds can be created with tax-exempt donations made in any appropriate form, including cash, securities, real estate or life insurance.
This is quite simple. The process is initiated 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 to be open to other donors, or closed.
We discuss the many options available and then assist with the preparation of a fund agreement. This agreement is like a contract tailored to your interests and needs, and after Board approval, it is signed by all parties. Any desired restrictions must be placed on the fund at the time of its creation. The fund can be added to at any time, but the purpose or purposes must remain consistent with the stipulations in the original agreement.
Should the donor’s interests change over time, one or more additional funds can be created to achieve alternative charitable purposes. A gift agreement will be created for each fund. However it must also be remembered that the long passage of time can outdate a funds purpose in the rapidly changing times in which we live. A fund for a disease now conquered, or for an organization that has ceased to exist are but 2 examples. The Board of Directors has the authority to change the purpose of a fund so as to carry on the donor’s intent if, through a change in circumstances, the donor’s original instructions cannot be carried out.
Gifts may be combined into a single fund. Donations are welcomed for the Community Fund (the general endowment fund), as well as for some existing Field of Interest Funds and Designated Funds.
There is no charge to set up a fund in the Community Foundation. The Foundation will have its own Administrative Endowment Fund. The income from this fund will help to offset administration costs.
The annual administrative fee charged to all funds has not yet been set but could be in the order of 1 or 2 % of the balance. This fee, some of which will go to the Administrative Endowment Fund, is designed to cover most of the Foundation’s administration costs – the investment management fee and custodial fee are direct charges to investment income.
The Foundation may have up to two granting cycles each year. All potential applicants complete a standard application form. The grants committee is made up of Board Members and possibly a group of community volunteers. This committee reviews all the applications and makes their own individual decisions basing their judgments on both objective and subjective criteria. They grade each application on a points system and then meet to jointly agree upon those applications that have the greatest priority for the community and how they are to be funded. The process may include presentations from applicants or site visits by committee members.
All grants are accompanied by an agreement that details the conditions under which the funds are being awarded. All grant recipients are required to provide details of their evaluation process, present final reports and to include impact statements. This allows the Foundation to have some sense of the overall effect these grants are making for the entire community.
A gift to the Community Foundation simplifies charitable giving. Several charitable organizations or causes can be provided for with a single gift. For example, a life insurance policy could establish a permanent capital fund in the name of the donors) and the annual earnings divided into thirds between a school or college, Big Brothers/Big Sisters, and disadvantaged children.
Almost any charitable intent can be realized, by choosing from among the endowment fund types offered by the Foundation. Furthermore, the range of charitable possibilities is very broad, encompassing: arts, culture, heritage, community festivals, social services, healthcare, education, nature, recreation and sports.
- Permanence and Continuity
The donor is assured that the fund will remain intact in perpetuity. The Foundation has a Preservation of Capital Policy, which ensures that the original gift is protected. Only the annual earnings can be spent.
All donors receive recognition in our Annual Report and other publications. In addition, all grants from a fund established by the donor are identified to the recipients by the name given to the fund. Of course, if a donor requests anonymity, the Foundation will give assurance that such wishes are respected.
- Investment Expertise
The Foundation sets a conservative investment guideline and contracts with a professional investment management service, requiring and expecting an excellent return on investment at the lowest cost.
- Tax Benefits
The Foundation qualifies as a registered charity under the Income Tax Act. Thus, gifts made at any time will result in important income tax advantages. Gifts of capital property qualify for a reduced capital gains inclusion rate. Your financial advisor can provide you with information on this aspect of charitable giving.
- Cost Effective
With an overall low administrative fee, the Foundation provides an attractive alternative to those considering the establishment of a private foundation.
- Community Effectiveness
In Canada and in Manitoba, Foundations through their active role in their communities, and through their rigorous grant process, have proven to make significant differences in their communities with the grants made.