Charitable Agency Funds

Many registered charitable organizations have established Charitable Agency Funds or Managed Funds at The WindsorEssex Community Foundation.

In reading about these fund options below, please contact our executive director with any questions or to set up a meeting to discuss this opportunity.

What it is

Funds established by charitable organizations as permanent funds to ensure an ongoing source of support for their programs and operations. The fund is established under agreement by the community foundation and the charity and the annual income is distributed to the charitable organization in perpetuity.

How it works

• The charity determines how much to invest long-term and makes a gift to the foundation.
• The charity and the foundation create a fund agreement.
• The foundation sets up a special fund in the name of the charity.
• The foundation handles the administrative investment details and your organization receives regular statements on the fund.
• The charity can add to the fund at any time and their donors can make gifts to the community foundation restricted for their fund. Charitable receipts are issued to the donor upon receipt of the donation.
• The fund is invested over time and annually the charity receives earnings from their fund to be used for their operating and/or program expenses.

Advantages

• A charitable agency fund is a safe and simple way for charities to establish their own endowment. Their donors can be sure that the endowed fund's principal will not be spent and can grow over time, providing a source of lasting support. The charities regular donors can leave a bequest through The WindsorEssex Community Foundation to create a personal legacy and benefit the charity. The WindsorEssex Community Foundation can assist donors and their professional advisors with planned gifts or gifts of appreciated stock or real estate.
• The WindsorEssex Community Foundation's economies of scale provide charities with the benefits of a diverse investment portfolio and low investment fees that typically come only with very large funds.
• We handle investment management and the administrative responsibilities related to the endowment so the charity's staff and volunteer hours are concentrated on fulfilling its mission.
• As a permanent fund with the 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.

Disadvantages

• The fund is non-encroachable by the charitable organization, even during times of extreme financial need.

Managed Funds

What is it?

Funds established by charitable organizations and held in trust by the foundation for investment management purposes only. The foundation provides an investment and administrative function only and the ownership of the funds remains with the charity.

How it works

The fund is set up in the same way as a Charitable Agency Fund, except:

• The charity and their donors can not receive a charitable receipt from the community foundation for gifts made to the managed fund.
• Income is returned to the charity as set out in the written fund agreement.

Advantages

• Provides better investment return and lower cost to the charity through pooling of assets.
• The charity can receive money from the fund as outlined in the written fund agreement allowing the charity to cover unforeseen expenses.

Disadvantages

• Being able to withdraw the fund not only exposes the agency to loss of protected capital but also may counter the intentions of the donors, volunteer solicitors and board members who assisted the organization to accumulate the funds.