TD launches pooled charitable foundation

(October 6, 2004) No longer the exclusive domain of the ultra-wealthy, charitable foundations are increasingly popular among high net-worth Canadians seeking to direct a portion of their estate to a favourite charity, rather than to the taxman.

Now TD Waterhouse Canada is getting in on the trend, establishing the Private Giving Foundation, which it calls “the first program of its kind offered by a Canadian financial institution.”

“It’s different than just writing a cheque to charity; this is for clients who want to leave an enduring legacy to charity,” says Jo-Anne Ryan, executive director of the Private Giving Foundation and head of Philanthropic Strategies at TD Waterhouse. “Endowment funds are important today because government funding has been significantly cut. In order for charities to survive, they need additional sources of funding.”

Private charitable foundations can be complex, expensive and time-consuming, which is why they have traditionally been the domain of the ultra-rich, since they were the only people capable of devoting the time and resources required by the foundation.

The program works as one large foundation, with individual accounts held within it in the name of the donors. TD Bank will provide an initial contribution of $250,000 to get the Foundation off the ground, and pay the costs associated with setting up the foundation.

“It’s really one public foundation which is registered with CRA,” says Ryan. “Clients can donate to it and TD does the record keeping on each donor-advised account and reports to that donor on a quarterly basis. It really gives them a structure that acts like a private foundation, but without the hassle.”

Individual participants must make an initial minimum donation of $10,000 in cash or securities, with optional subsequent minimum contributions of $1,000. The funds will be invested in the TD Balanced Income Fund, advised by Jarislowsky Fraser Ltd. TD is also reducing the MER on the fund from 2.13% to 1% for the foundation.

“The advisor is not selling a mutual fund, because the Private Giving Foundation has selected TD Balanced Income fund,” she says. “So the advisors are technically fund-raisers, talking to the donor and helping them to meet their philanthropic needs. If the Private Gifting Foundation is what makes sense for the client, they will help them get into it.”

In accordance with Canada Revenue Agency rules, investment proceeds and a portion of the principal must be disbursed to charities on an annual basis. Donors are allowed to designate any legally registered Canadian charity as the beneficiary of their contribution.

The board of directors of the Private Giving Foundation includes: Marcia Lewis Brown, managing director at TD Asset Management Inc.; Rudyard Griffiths, founder and executive director of the Dominion Institute; Michael Sherman, senior manager, government and community relations, TD Bank Financial Group; David J. Thomson, former president of Great West Life Properties; and Julie Toskan-Casale, founder and president of The Toskan Foundation.

Filed by Steven Lamb, Advisor.ca, steven.lamb@advisor.rogers.com