Philosophy
The constitutional purposes of the Abbotsford Community Foundation ("ACF") include providing for charitable purposes by contributing to the mental, moral, cultural and physical improvement of the inhabitants primarily of the City of Abbotsford. This authority permits the ACF to handle what are known as "Flow-Through Funds".
Flow-Through Funds are non-permanent funds destined to be passed directly through to a qualified charitable enterprise. Such funds may be intended for a specific recipient or may be regarded as discretionary funds that are to be distributed by the Foundation to serve objectives set out by the donor.
The defining characteristic of a Community Foundation is that it is committed to, and structured to achieve, the development of a collection of permanent funds.
Flow-Through Funds do not help in a direct way to grow the endowment base and the question may be asked as to whether the provision of this service could divert attention from the Foundation's primary goal.
One of the determining factors in the future growth of ACF's endowment base will be the recognition of what it does for the communities it serves. One of the best ways to gain such recognition is through the grant-making program.
For ACF, with its limited capital base, Flow-Through Funds could provide, if only on an irregular basis, the capacity to respond to needs beyond those that can be served by the distributions available from the permanent endowment funds, thereby raising the ACF profile and strengthening its leadership role in addressing community needs.
Typically, the grants program of a Foundation grows year by year in an orderly progression as the collection of permanent funds is expanded. The sudden increase in annual program granting through the appearance of Flow-Through Funds could generate community expectations that cannot continue to be met over the long term. This issue would have to be addressed through carefully planned communications and, when appropriate, by managing the Flow-Through Funds as a separate granting program.
Increased community awareness of ACF's role and potential contribution to the future quality of life in Abbotsford is essential to ACF's further development. In this situation, the potential benefits of a flow-through grants program are attractive.
These benefits will remain positive, only if the program is managed under clear and definitive policy guidelines.
Policy Statement
The Abbotsford Community Foundation ("ACF") will consider flow-through fund services under the following terms and conditions:
General Conditions
Upon establishment of a Flow-Through Fund the donor must either (a) designate a specific recipient organization or (b) provide a clear statement of the goals/objectives to guide the ACF in the distribution of discretionary funds.
The objects of any designated recipient organization(s) must be compatible with the mission of the ACF and such organization(s) must be a Qualified Donee within the requirements of the Income Tax Act.
The goals/objectives for the distribution of discretionary funds must be compatible with the mission of the ACF and must also indicate that the final approval for all grant decisions rests with the Board of Directors of the ACF.
Subject to Clauses 1.2 and 1.3, the ACF will meet the conditions of the donor in the disbursement of funds.
Flow-Through Funds will come into effect upon the signing of the fund agreement and the receipt of the funds by the ACF.
Depending on the timing of the execution of the fund agreement and the transfer of funds, and on the objectives of the donor, Flow-Through Fund distributions may be managed in concert with ACF's normal granting cycle or may be managed as a separate granting program.
Fund Minimums
The minimum donation for funds intended to flow-through to a designated organization(s) will be Five Thousand Dollars ($5,000).
The minimum donation for funds which are to be distributed at the discretion of the ACF will be Twenty Five Thousand Dollars ($25,000).
Fund Management
On receipt, all funds will become the assets of the ACF.
The ACF will assume responsibility for the preservation of the value of the assets donated and may, at its discretion pool such funds with the ACF funds managed by its investment managers or deposit the funds to ACF's local accounts.
Any interest earned by the investment of Flow-Through Funds, net of investment or custodial fees, will accrue to the benefit of the ACF.
A separate ledger account will be maintained for any Flow-Through Funds held by ACF.
Fees for Service
The ACF will charge a fee to offset the expenses incurred in the administration of the fund. Such charge shall be one (1%) percent of the value of the fund with minimums of $250 for funds intended to be passed through to a designated beneficiary and $500 for funds which are to be distributed at the discretion of the ACF.
Administration
In accordance with applicable legislation, 80% of the donation must be distributed by the end of the year following the one in which the donation was receipted.
Where necessary, the ACF will issue receipts valid for income tax purposes.
Except when otherwise directed, the ACF will appropriately memorialize the fund and identify distributions as coming from the fund and the ACF.
In the case of funds intended for a designated beneficiary, the distributions will be made within 45 days of the date the fund agreement was signed and the funds were received by the ACF.
In the case of funds which are to be distributed by the ACF on a discretionary basis, distributions will be made in accordance with the terms and conditions of the fund agreement.
The ACF will provide donors with a statement of the distributions made and the dates the cheques were issued.
All fund agreements relating to flow through donations will clearly set forth the terms of this policy.
Policy Review
This policy will be reviewed as required and may be either amended or withdrawn subject to respect for any fund agreements which may be in effect at the time of such review.