“I hear a lot about foundations and wonder who can start a foundation. What about it? » — Christiane Baril
Excellent question, because we know very little about the complex functioning of these organisms.
Let’s start at the beginning. In Quebec, there are “charities” and two types of foundations, public and private – with different structures.
To the question “Who can start a foundation?” ”, the answer is… everyone! As long as you have a little money and, ideally, a vision or a project. Depending on the amounts and the goal, the path is not the same.
First, you should know that private foundations are not quickly set up on the corner of a table, with a good idea in mind.
This requires work at the start, and well beyond since private foundations are managed by more or less independent directors – at least half of them must have a link to the foundation, often a family or even a single donor .
Deciding to launch a foundation therefore requires a lot of resources, in every sense of the word.
“It always requires a board of directors, which is accountable to the community,” explains Caroline Bergeron, head of philanthropic management studies at the faculty of continuing education at the University of Montreal.
People must be accountable for their activities, make appropriate reports, and comply with charitable laws.
“It’s a lot of administration, a lot of paperwork,” says Caroline Bergeron. It can be profitable for someone who has a lot of money and who wants to capitalize their funds and use a portion of the capital. »
Several private family foundations do this.
However, you should know that when you give your money to create a private foundation, you give it to a structure. We have a tax receipt for that, but the money belongs to the community.
Caroline Bergeron, head of philanthropic management studies at the faculty of continuing education at the University of Montreal
And it is for this reason that the board of directors, even if it is linked to the founder-donor, is accountable.
As for the mandate, it can be very varied, as long as it respects the law on charities.
“It must be a non-profit organization that falls within the major sectors established by Revenue Canada,” specifies Caroline Bergeron.
There is another avenue for potential donors who have a project, but not necessarily the means that would justify the effort of creating a private foundation: endowment funds.
It’s an interesting way to support a particular objective, explains Caroline Bergeron.
“We could create a fund at the Foundation of Greater Montreal, for example,” she said, “in a community foundation. »
The process is much simpler and does not include the training of a CA
Another advantage, points out Caroline Bergeron, is that it allows people to carry out a project that is close to their heart, over a defined period of time. “And they’re going to see it in their lifetime,” she said.
This process makes it possible to carry out projects with smaller amounts, even if it means giving back money by renewing the fund. This could be linked to the founding of a hospital or a university, for example, where we could create a personalized scholarship or study fund.
In all cases, the person who wants to get started must make a good assessment of their objectives and the time they want to devote to their project, which can truly become a life project. Other avenues are possible, including going it alone, accompanied by your financial planner, rather than partnering with community and public foundations.
Namely: public foundations have charitable mandates and independent directors, unlike private foundations.
Where does the suspicion that we may have regarding these organizations come from?
“Organizations ask us for money, it’s normal that we ask ourselves what it’s for! », replies Caroline Bergeron, head of philanthropic management studies at the faculty of continuing education at the University of Montreal.
Fortunately, as they are accountable to the community, the activity reports of these foundations are all available. A potential donor can view them and choose where they want to contribute – the sectors of activity are very varied.
On the other hand, many people are surprised by the administration costs of these philanthropic enterprises, notes Caroline Bergeron. However, to launch visibility and fundraising campaigns, a foundation must inevitably have competent staff.
“We sometimes think that everyone should be a volunteer, but it takes great expertise to work in certain charities. »
“The public sometimes wants the money paid to be used solely for the cause, but that is utopian,” she continues. There are people who are taking care of this cause. »
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