Do you Need an Endowment Policy? As part our work, we are often asked by clients to review their Endowment Policy.  Occasionally, we are even asked to develop a brand-new Policy. But these requests have got me thinking.  Do charities need a separate Endowment Policy?  Do they need an Endowment Policy at all?  In the past, I’ve written several articles about Endowments, including questioning the use of the term itself.  In Canada, I would suggest that an endowment has come to mean any gift that is not spent in the short to medium term.  For example, if a donor and ..read more

As mentioned in a previous article, the meaning of endowment in Canada is a fleeting one, largely because the word lacks a formal legal definition.  As a result, endowment has been subject to a myriad of conflicting definitions, resulting in considerable confusion for fundraisers and other charity personnel. As a result of this confusion, it’s probably easier to either scrap the word entirely or understand that it is open to significant interpretation.  Rather than debate the term’s meaning, it’s probably easier to think of endowments in terms of spending restrictions that a donor pl ..read more

Endowment is one of the most misunderstood terms in our charitable sector.   Given the fact that “endowment” lacks a formal legal definition, this should hardly come as a surprise.    There are many who still hold on to the traditional definition of an endowment – that is, funds that are held permanently by a charity where the annual income derived from those funds is used to support the charitable activities/programs of the organization.  While this definition is not necessarily an incorrect one, it is rather limited and isn’t overly helpful as we try to navigate the ..read more

Endowment funds have the opportunity to make a difference in how charities fulfill their missions. The oversight of a charity’s investments can involve considerable fiduciary risk.  How charities manage and mitigate this risk is probably the more important aspect of the investment management process. The term “fiduciary” is a bit of a mouthful but the concept of fiduciary is a straightforward one. What is a Fiduciary? Fiduciary is a legal term.  It typically refers to a person who has a responsibility to act for another’s benefit.  While there are many different types of fiducia ..read more

Let’s stop comparing ourselves to Americans when it comes to charitable giving. It is true that on a per capita basis, Americans are more far generous than we are but the truth is that they are miles ahead of every nationality when it comes to giving back. Let’s focus instead on our own philanthropy and how we can keep raising the bar. Times are tough. If you can’t give, try and find the time to volunteer. You have no idea how much charities value your time. Some people in the gift planning community think that a more favourable tax treatment of charitable remainder trusts will result in their ..read more

In the past, I have attempted to dispel some of the basic tenets of corporate philanthropy – namely, that the notion of “corporate philanthropy” is a misguided one because all corporate giving must be driven by building shareholder value and that the values associated with philanthropy (empathy, love and other decidedly human emotions) cannot be expressed by corporations (in that article, I also underscored that I was not rendering any judgment on the moral validity of corporations). In this article, I want to talk more about the decision-making process at corporations when it comes to allocat ..read more

There are many myths and erroneous assumptions about how corporations manage their community investments. The first myth (and probably the most important one to dispel) is the notion of corporate philanthropy – that corporations are entities that share human goals and ideals and are thus somehow capable of philanthropy. The faster we dispel this myth, the sooner we will understand the true essence of corporate community investment. Corporations are not truly philanthropic. They are not looking to make a difference in the world through their community investments (I am using the word “philanthr ..read more

It’s time to have a frank discussion about charities and their administrative and fundraising costs. Over the past decade, the increasing focus on a charity’s cost of doing business – and yes, charities are in the business of societal betterment – has forced the entire charitable sector to defend itself against a rash of naïve accusations. While there is no doubt that a few bad apples have found their way into the sector, the fact remains that over 85,000 other charities are doing precisely the work that most of us admire: feeding the needy, housing the homeless, nursing the sick and educating ..read more

Over the last few years, both donors and fundraisers have had the opportunity to consider the notion of endowments and how they might fit into an overall donor development model. Over this time, I have discussed endowments with many people in the charitable sector. What I first realized was that “endowment” still remains a loosely described term whose formal definition is often a fleeting one. First, let us remember that “endowment” lacks a formal legal definition. Even the notion of “enduring property”, which was traditionally viewed as synonymous with endowment, died with the changes to the ..read more

The endowment is a bit of lost soul. It’s a term with no true legal meaning but a whole bunch of different interpretations. It’s a word embraced by some fundraising organizations yet frowned upon by others. Endowments are like perennial flowers – we don’t necessarily want to spend much time cultivating them but heck, we sure do love them when they sprout each and every year. Endowment is a term with no recognized legal definition. For most of us, an endowment is simply a fund which is kept aside in perpetuity to provide earnings for the long-term benefit of the organization. It’s the charitabl ..read more