Gifting to The Community Foundation of Prince Edward Island requires the
donor to consider two things.
First, the donor must consider the best manner in which to make their
contribution - (the GIFT), taking into account their personal
circumstances.
Secondly, donors must give consideration as to how
they want to put their charitable contribution to work for their community
- (the FUND).
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What is a Gift?
The term "gift" applies to many different types of donations to
community foundations. There are various means to provide a gift to The
Community Foundation of Prince Edward Island regardless of your income or
accumulated wealth.
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What are the gifting options available for prospective donors to the
Community Foundation?
There are many ways and means to provide a gift to The Community
Foundation of Prince Edward Island. As previously mentioned, one of the
key benefits of The Community Foundation is the flexibility
to meet a community's or a donor's needs.
While cash and cash equivalents, and bequests are some of the more common
methods of gifting to the Community Foundation, they are not the only
means available. Most people find that their circumstances necessitate a
different means of meeting their philanthropic needs.
For example, a great many of Canadians participate in planned giving,
which is simply a prepared and organized means of a person donating to
charitable causes. Often however, families make decisions on gifting when
dealing with estates following the death of a loved one.
The decision to contribute to a charitable cause remains a personal one,
however and there is no correct way of making that decision. It is a
decision which respects upon the wishes of the donor.
For more information on gifting options available, see our
Index of Donor Options.
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What is a Fund?
The term "fund" is used to describe the type of "accounts" the Community
Foundation has available to donors. Examples include a community fund,
field-of-interest funds, and donor advised funds.
Endowment Funds - Where the gifts are kept in perpetuity to generate
income for grant making or other distributions; these endowments may be
given for general community purposes (unrestricted funds), for particular
purposes (restricted funds), for support of named agencies (designated
funds), or in support
of an area of interest (field-of-interest funds).
Flow-Through/Temporary Funds - Where the gifts are not held permanently,
but rather used (flowed through the foundation) over a period of time to
provide for grant making or other special purposes.
For investment purposes, all funds are pooled together. For record
tracking purposes, however, each
fund is accounted separately from all others. Investment earnings are
calculated and allocated
proportionally to each fund on an annual, quarterly or monthly basis.
Grant disbursements are tracked
on a fund-by-fund basis.
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What is an Endowment Fund?
Simply put, "to endow" means "to create an income" for someone or
something. In community
foundation terms, an endowment, then, is a fund which is kept in
perpetuity to provide income for the benefit of a charitable cause.
Generally, principal or capital is not spent except to fulfil the intent
of the donor.
Endowment funds offer many advantages. They are attractive for donors who
want their gifts to have an impact in perpetuity. They ensure a flow of
grant funding year to year. Endowment income - the
interest or dividends from principal or capital, or realized capital gains
- enable longterm planning for
grant making, financial stability and successful functioning.
Community foundations offer donors many types of endowment funds. There
are designated funds
for specific purposes, donor advised funds that give donors a chance to
play an active role in choosing those who will receive grant income, and
field-of-interest funds that allow a donor to choose a
particular area of interest like education, health or children.
The most important endowment that donors can provide for the long term
benefit of your community, however, is the discretionary or undesignated
fund, often called the "community fund". This is the
fund with which the community foundation Board of Directors has the
freedom, flexibility and
responsibility to meet the most pressing needs of your community. Grants
may be made for any charitable purpose.
For more information on types of funds available, see our
Index of Fund Options.
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Any other advice or recommendations?
Yes, while we have taken the utmost in care to ensure that the information
provided at this site is
accurate, mistakes can and do occur. We strongly recommend persons
considering making a
commitment to a charitable cause consult with their legal and financial
advisors.
There are many factors which have to be taken into account when
considering charitable gifting.
Depending on the circumstances of the donor, tax and estate considerations
can be important and
determining factors on the gift. Your financial and legal resources can
advise you of the current situation
and help you plan what is best for you.
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Want to make a gift to the Community Foundation of Prince Edward
Island?
Please read the below information regarding Revenue Canada's Disbursement
Quota. You may then
print off our form, fill it out and mail it along with your donation to
our Foundation at the address shown.
The following is for your information and does not need to be mailed in
with the donation form.
Disbursement Quota (DQ)
The disbursement quota is set by the Income Tax Act and is a method of
ensuring that donated funds
are eventually used as they were intended - to carry out charitable
activities. When a Gift is made to a charity/foundation and is intended to
be a part of an endowment, it is necessary to designate the gift so
as to avoid the basic requirement to disburse 80% of the receipted gift in
the following year.
The designation takes the form of a "direction" that the Gift given is
held in charity for a period of not less than ten years. It is necessary
that a direction be obtained for each Gift. The written direction must be
held for the ten years, which is beyond the normal 2+ year receipt
retention requirement.
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A Request for Direction Regarding Your Gift to the Foundation
As you may know, a primary goal of The Community Foundation of Prince
Edward Island is to
create and manage Permanent Endowment Funds, which generate income in
perpetuity. The income is
then used year by year to fund projects, agencies, and community needs.
However under Revenue Canada regulations we are not permitted to retain
your funds in perpetuity
unless we receive written direction from you that your Gift is to be held
for a period of not less than (10) ten years. This direction enables The
Community Foundation of Prince Edward Island to invest
your Gift on a long term basis and to distribute only the income to help
meet community needs. If we do not receive this direction, then we are
obliged to spend 80% of the Gift within two years of
the date of the Gift.
Based on this information and if you agree, may we request that you sign
the following
declaration
and forward it with your gift. Thank you for your assistance with this
matter.
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