Spend-down Funds

The Foundation Perpetuity Myth

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The philanthropic community has a perpetuity obsession.  Critics of perpetuity believe that preserving capital, restricting payout, and existing forever is the pernicious norm.  Admittedly, for some foundations, perpetuity a sacred ideal, an aspiration that is sometimes unquestioned.  Foundations that “spend-down” are valorized as rare entities that value community impact over capital.  But the reality is more complex.  There is a long history of foundations that aren’t perpetual, and in Canada….

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Philanthropy/Charitable Giving, Uncategorized

Spend-down Charitable Funds

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[caption id="attachment_5888" align="aligncenter" width="364"] The middle ground at Indian Battle Park, Lethbridge, Alberta[/caption] Until 2010, the disbursement quota provisions in the Income Tax Act mandated that charities handle donations in one of two ways: for immediate use or held as long-term endowments through the “10-year gift” capital hold mechanism.  These binary rules drove donor and charity behaviour.  The 2010 reforms provided charities with greater flexibility regarding the acceptance and use….

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Estate Planning, Philanthropy/Charitable Giving
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