Community Foundation News
Donor Advised Funds at CFPEI: An Alternative to a Private
Foundation
Donor advised funds at a community foundation are an alternative, and are
likely to be a more flexible and less expensive one, than a private
foundation. Community foundation funds allow a donor to remain involved
without having the administrative, financial and legal responsibilities
associated with having a private foundation. Briefly stated, a donor
advised fund within the Community Foundation of Prince Edward Island:
- Leaves the fund in the hands of a local charitable organization focused on improving the quality of life in the local community
- Carries a name designated by the donor or may even be anonymous
- Provides for grants that reflect donor advice and wishes
- Can be set up in a day and does not require separate application to the Canada Revenue Agency
- May result in tax advantages to the donor above those to other charitable organizations or to a private foundation
- Can accommodate grants for charitable activities outside Prince Edward island
- Is included in CFPEI reports to CRA by the Foundation and does not require a separate filing by the donor
- Is administered by CFPEI including investment, general administration, legal, accounting and an annual independent audit.
- Results in an immediate CCRA or IRS tax receipt to the donor
- Allows donors or their nominees to participate in the grant-making process
- Comes under the general liability insurance carried by the Foundation.
- Carries lower administrative costs than many other alternatives
- Depending upon the size, may be separately invested to reflect donor directions
- Provides for administrative continuity beyond the life span of the current donor
- Is customized to reflect donor interests
- Takes advantage of granting expertise and experience of the Foundation
- Avoids the time consuming and costly step of incorporation and registration with CRA
- Allows for succeeding generations to participate in the granting process
- Removes donors from liability in the granting process
The Foundation News is an informal newsletter edited and published
electronically by, and at the whim of, Don Glendenning. Think of it as a
letter from a friend. Feel free to send it to a friend or otherwise let
me know that you want to be on the mailing list. Address:
dglende@auracom.com the foundation
email address is foundation@cfpei.ca.
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