Establishing my donor-advised fund

What is a donor-advised fund and how do we set one up?

View the overview page here.

May I name my donor-advised fund a “Foundation”?

Absolutely. You many name your donor-advised fund a “Fund” or a “Foundation”—it’s up to you.  You can choose to call it The {Your Name} Foundation if you like.

Is there a minimum amount of funds needed to set up a donor-advised fund?

There is no minimum figure for setting up a fund although typically a donor-advised fund will hold a minimum of $500K and/or make grants of a minimum of $35,000 per year. We are happy to work with you to see whether it makes good economic sense for you to use the services of The Foundation Office.  Some families or individuals choose to establish their foundation with minimal granting in anticipation of increased giving in the future.  Others don’t keep a balance in their donor-advised fund and instead make single donations and then, in the following months, make grants to multiple charities.

Do I have to choose which charities will receive grants from my donor-advised fund when I establish the fund?

No.  There is no rush to decide which Canadian charities you wish to support. Whenever you are ready to make the recommendations, simply advise The Foundation Office and we will then begin the process.

What are the costs to have a donor-advised fund at The Foundation Office?

Operating costs for The Foundation Office are not the same for every fund.  Costs are determined by your annual granting activity and not on the asset value of your fund. Our fees are based on the level of service you require. We provide a customized quote for services after we meet with you to understand your specific needs. We establish a personalized annual cap to the fees assessed to your foundation fund. Fees are structured as an annual base amount of $3,000 plus a sliding-scale percentage (2-5%) of your grants awarded each year.  The cap ensures that the cost of running your foundation fund is known in advance and will always be less than it would cost donors to run a private foundation at a similar style and volume.

Grants from my donor-advised fund

Why are my grant-making directions to The Foundation Office called “recommendations”?

The Foundation Office is a Canadian charity regulated by and held accountable to the Canada Revenue Agency (CRA). CRA requires any Canadian charity donors to relinquish control over the funds so that they may be given for completely charitable purposes; CRA also requires The Foundation Office to take full responsibility and independent ownership for the funds to ensure they are used for charitable purposes. Your directions are considered as “recommendations” to The Foundation Office. In practice, your recommendations are followed as long as they name a valid registered Canadian charity as the grant recipient.

How much of my donor-advised fund do I need to grant to charities each year?

Canada Revenue Agency requires granting of at least 3.5% of the balance of your donor-advised fund as of the previous year-end.  But because The Foundation Office calculates its disbursement quota on all donor-advised funds together, there may be opportunity for you to grant less than 3.5% in a given year if desired.

How and how often may I make recommendations for grants to be made from my donor-advised fund?

Recommendations for grants are made quarterly, but can be arranged at any time with The Foundation Office.

May I recommend a grant to an individual or an organization that is not registered as a Canadian charity?

Unfortunately, not. This is determined by the Canada Revenue Agency and the restrictions it places on The Foundation Office.

Who is eligible to make recommendations for grants from my donor-advised fund?

When you sign an agreement to form a donor-advised fund with The Foundation Office, you identify the person(s) who will be the Advisor(s) of the donor-advised fund and who are therefore eligible to make recommendations for grants.  Advisors may be changed at any time with written instructions from the current Advisors of the donor-advised fund.

The future of your donor-advised fund

Who ‘owns’ the donations that I make to my donor-advised fund?

When you donate funds to a donor-advised fund, you receive a charitable tax receipt for the funds. After that, The Foundation Office is the legal owner of the funds and disburses them according to your recommendation. (See why “recommendations” question above.)

Is it possible to split my donor-advised fund into multiple donor-advised funds at The Foundation Office at a future date?

Yes. This is a great benefit to forming a donor-advised fund rather than a private foundation. New donor-advised funds may be formed typically within a week and at zero cost. Funds may be transferred to the new donor-advised fund(s) at the fund Advisor(s)’ recommendation.

Can we change our minds about where we want to donate?

Yes. At any time before your recommendation is approved by the Foundation Office, you may make your decisions about which charities you would like to support.   Most donors make their granting recommendations to The Foundation Office on a quarterly basis.

Can more funds be added to our donor-advised fund in the future? Do they have to be from us directly?

Yes, and no. Additional donations may be made to your donor-advised fund at any time. And, anyone may make donations to your foundation by simply designating that the donation(s) be allocated to your named donor-advised fund. Receipts for income tax purposes will be provided to the donor who makes the donation to your donor-advised fund.

What happens to my donor-advised fund when I die or no longer want to recommend grants?

Your wishes continue to direct your fund. You may appoint new Advisors for your fund or you may direct The Foundation Office to continue funding a specific charity or a specific type of charitable work, for a specific time into the future or indefinitely.

What are the benefits to our children and heirs of working with The Foundation Office? What if our kids don’t want to be involved? What if we want to set the direction for how funds will be spent, past our lifetime?

By working with The Foundation Office, you have the opportunity to pass along the privilege and joy of giving without requiring your heirs to assume the administrative and fiduciary responsibilities of running a private foundation. Your foundation at The Foundation Office will be professionally managed for you, for your heirs, and their heirs. Just as you have the joy of giving without the responsibility of running your foundation, this joy can be passed along by simply naming your successors as the next Advisors to your donor-advised fund.

You may set the general or specific direction for your foundation by naming the types of charitable work you would like your donor-advised fund to support into the future. Future Advisors to your foundation would be free to recommend the support of charities that satisfy your named direction. Or, you may choose to allow future Advisors to develop their own granting agenda for the foundation.

If your children or heirs do not wish to be involved as a future Advisor to your foundation, you may simply direct The Foundation Office to support specific charities or charities performing a certain type of work. Your direction will be followed as long as your donor-advised fund exists.

The Foundation Office, at your service

Can The Foundation Office introduce me to good charities working in areas that interest me?

We believe this is one of the best reasons for working with The Foundation Office. Our networks and history of engagement with charities are extensive. We listen to your grant-making priorities and can help you find charities that effectively address those issues or areas of interest and concern.

How can I determine the effectiveness of grants I have made?

We help our clients monitor the charities they support. We provide regular investment statements and activity reports to donors. Reports from charities that receive grants can be requested on your behalf and can be sent to you directly or to The Foundation Office if you prefer. We provide a secure online access for you to view reports that are received in response to your grant recommendations.

We already have a financial advisor(s) we’re happy with. Can you work with our advisor? What do you bring to the table that we aren’t already getting from our advisor?

If requested, and subject to a minimum investment, The Foundation Office will be pleased to work in partnership with your financial advisor(s) to establish a segregated investment account and, thereafter, to develop an individualized investment strategy for assets within your foundation fund.

My Personal Information and The Foundation Office

Is my personal information secure at The Foundation Office?

Yes. The Foundation Office abides by strict privacy policies which ensure that information about donors and the charities they support is kept confidential.

Will my name, or my family’s name, or my corporation’s name ever be made public as a donor to my donor-advised fund?

Donations to The Foundation Office are private, and donors’ names are never made public. However, if you wish, the grants made to charities from your donor-advised fund can identify you (your family, or your corporation) as the source of the funds behind the grant. Your grants to charities may also be made anonymously if that is your preference.

Will the names of charities I support from my donor-advised fund ever be made public?

Canada Revenue Agency requires The Foundation Office to list all charities receiving grants through The Foundation Office in our annual filing. However, we do not report which donor-advised fund made which grants—therefore, the grant recipient charities from your particular donor-advised fund will never be made public.

May I remain anonymous in a grant that is made from my donor-advised fund?

Yes. Any or all grants from your donor-advised fund may be made anonymously. This is entirely your choice and can vary between your different grants. This is one key difference between a donor-advised fund and a private foundation: no private foundation grant can be made anonymously.