Securing and managing financial support can be an ongoing challenge for many non-profits and charitable organizations in Nova Scotia, especially those with limited staff and resources. If you are one such organization, you may want to consider starting a Charitable Endowment Fund with the Community Foundation of Nova Scotia. Not only will it provide you with better financial stability, but will also provide you with more time to focus on what matters most to your organization!
What is a Charitable Endowment Fund?
An endowment fund that a local non-profit or charity establishes with the Community Foundation of Nova Scotia as a permanent fund to ensure an ongoing source of support for its programs and operations.
How does it work?
A charitable organization creates a designated fund at the Community Foundation of Nova Scotia. The fund is owned by the Community Foundation, however, the income is directed to the charitable organization. Donors can make contributions to the fund through the charitable organization or directly through the Community Foundation. All gifts to the fund are pooled and permanently invested to provide a stable, annual revenue stream for the organization.
What are the benefits?
By placing an endowment fund into the Community Foundation investment pool, the charitable organization increases its opportunities for maximizing income while reducing investment cost. The charitable organization is relieved of the internal accounting and reporting required as periodic statements on principal and income status are provided by the Foundation. In addition, an annual audit is performed by independent auditors as part of the Foundation’s regular audit procedure.
By transferring ownership to the Community Foundation, the fund is protected from encroachment by future boards. Community Foundation ownership also provides added reassurance to donors that their gifts will be held in perpetuity for exclusive use by the charitable organization or for a similar purpose should the charitable organization cease to exist.
Transfer of capital funds also removes the fund from the charitable organization’s financial statement, which may eliminate misunderstanding about the actual funds available to the agency for immediate use.
Since it is a permanent fund, it is non-encroachable by the charitable organization, even during times of extreme financial need.