Question #1

Can a financial service provider offer a Charitable Gift Fund on its own?

Answer:

No. A Charitable Gift Fund must be established in partnership with an independent, recipient charitable organization (e.g., The Charitable Gift Funds Canada Foundation) that is registered with the Canada Revenue Agency (CRA). When a financial service provider establishes a relationship with a recipient charitable organization, only then can the financial service company offer a Charitable Gift Fund product to its clients.

Question #2

Who holds the money that is contributed to a Charitable Gift Fund -- the financial service provider or the registered charity that owns the Charitable Gift Fund?

Answer:

The financial service provider is the custodian of the Charitable Gift Fund assets, managing them on behalf of the registered charity which owns the assets.

Question #3

When a donor opens a Charitable Gift Fund account, what are the actual steps to be followed?

Answer:

• A donor completes an agreement form to open a Charitable Gift Fund account through your firm. Contributions can then be made to the Charitable Gift Funds Canada Foundation (CGFCF).
• This donor will receive a donation receipt from the CGFCF for the full value of contributions made.
• The assets donated will then be liquidated by the CGFCF for reinvestment in the donor's Charitable Gift Fund account. 
• Your Charitable Gift Fund program will offer the donor a range of investment options to consider for use with a CGF account.
• The donor will select an investment strategy from among those offered by your firm, and that have been pre-approved by the CGFCF for use with the Charitable Gift Fund plan.

Question #5

What types of assets can be contributed to a Charitable Gift Fund?

Answer:

Contributions of cash, publicly-traded stocks, mutual fund units, bonds and appreciated property are all eligible for contribution to a Charitable Gift Fund.

Question #6

Can privately-held company stock be donated to a Charitable Gift Fund?

Answer:

Yes; a Charitable Gift Fund can accept gifts of privately-owned shares as long as they can be monetized as outlined by CRA. Proceeds would then be invested in a Charitable Gift Fund.

Question #7

What are the contribution and balance requirements of a Charitable Gift Fund?

Answer:

It depends. Product definitions are set by the financial service provider offering the Charitable Gift Fund plan. The firm will establish minimum contribution amounts required to open an account and any subsequent contributions. The minimum initial contribution will not be less than $25,000 in any case.

Question #8

Can an individual donor name a grant advisor or successor on his/her Charitable Gift Fund account?

Answer:

Yes. Donors should view their account as a means to leave a lasting legacy of giving. The primary donor establishing the account has the right to name one or more individuals to serve as grant advisors and/or successors. An individual can be named as successor of the account or a specified charity can be named as the beneficiary.

Question #9

Can an individual receive income from the Charitable Gift Fund?

Answer:

No. Contributions are irrevocable. Assets held in a Charitable Gift Fund account are owned by the recipient charitable organization. All account earnings will be credited to the Charitable Gift Fund account tax-free. The amount that is recommended for grants to qualified donees (ie. other registered charities and qualifying not-for-profits in Canada) will be drawn from these earnings.

Question #10

How are grant decisions made?

Answer:

The recipient charitable organization (e.g., Charitable Gift Funds Canada Foundation) will make grants to qualified donees (ie.other registered charities and groups in Canada) according to its granting policies. The donor can recommend which qualifying charitable organizations should receive a grant from their charitable gift fund.

Question #11

Does a Charitable Gift Fund require a minimum grant amount?

Answer:

On an annual basis, the minimum grant requirements will vary from program to program. The minimum grant amount that will be expected to be paid out each year is equivalent to at least 3.5% of the value of assets under management in the Charitable Gift Fund account, as calculated each year on the valuation date established for the fund.

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