What is a Charitable Gift Fund?
A charitable gift fund (CGF) is a charitable giving vehicle created for the purpose of managing charitable donations on behalf of an individual, family or organization. Also known generically as a "donor-advised" fund, CGFs offer the opportunity to create an easy-to-establish, low cost, flexible instrument for charitable giving as an alternative to direct giving and/or creating a private foundation. Donors enjoy administrative convenience, cost savings and tax advantages by conducting their grantmaking through the fund.
A donor makes an irrevocable contribution (minimum $25,000) to the Charitable Gift Funds Canada Foundation to create a charitable gift fund.
The donor may recommend an investment strategy from among the approved, prudent investment options available through their professional advisor, financial service provider, wealth management firm or the CGFCF. The Foundation invests the donation into investment funds using the donor’s professional advisor, financial service provider, wealth management firm or the Foundation's generic investment fund. In most cases, the funds become family endowments that carry on for generations with successive family member advisors.
The donor may make grant recommendations to their preferred charitable organizations through the Foundation. CGFCF is an organization that promotes grants to the widest possible variety of charities across Canada as long as these charities are registered as "qualified donees" with the Canada Revenue Agency (CRA).
When a charitable gift fund is established with CGFCF, a donor:
- Receives a donation receipt for the full fair market value of their contribution
- Recommends an investment strategy for their Charitable Gift Fund
- Recommends grants from the fund to charities of their choice at their convenience
- Turns over all administrative paperwork to the CGFCF.
CGFCF works with donors and their wealth management, legal and financial advisors to balance their philanthropic goals with their estate planning and financial needs.