Donor-Advised Funds
Private Giving Through The Hemisphere Foundation
At Hemisphere, our philanthropic efforts reach a diverse set of causes driven by our employees, clients, and the communities in which we live. In a reflection of this commitment, we also administer our own foundation, The Hemisphere Foundation.
We administer this foundation as an added service for our existing clients. We allow our clients to setup Donor-Advised Funds (DAFs) under the umbrella of the Hemisphere Foundation to support the causes they care about on an ongoing basis.
Through this initiative, we demonstrate our commitment to philanthropy, ensuring that charitable giving remains a cornerstone of our values and services.
WHAT IS a Donor-Advised Fund
A Donor-Advised Fund is a tax-preferred charitable investing account created under the umbrella of a private foundation. You make an initial contribution and can allow that contribution to grow while also making charitable donations over time. Once the account is setup, you are able to contribute as much as you want, whenever you want.
CHARITABLE GIVING Benefits
Establishing a Donor-Advised Fund is a great way to assist with your private charitable giving. This provides similar benefits to a private foundation without the set-up costs and ongoing administration headaches. Once setup, you can support your preferred charities at a pace that is convenient for you.
One benefit that is often overlooked is privacy. Through a Donor-Advised Fund, your identity and donations can remain anonymous if you prefer. It is sheltered by the foundation umbrella. This option does not exist with a private foundation. The CRA’s website displays the names of the directors of every private foundation. All gifts from a private foundation are also disclosed.
Tax Planning Benefits
Setting up a Donor-Advised Fund provides notable tax benefits. You will receive a tax receipt for the full amount donated in the year given. This allows you to make strategic donations to minimize tax bills in a given year.
You can also make in-kind donations to donate securities directly to your Donor-Advised Fund. This allows you to avoid future tax liabilities while enjoying tax benefits from the donation. This is particularly beneficial for securities that have a high unrealized gain. By donating these securities, you are able to avoid paying tax on the capital gains if you were to sell the security. You also receive the tax benefits from the donation amount.
Leave A Lasting Charitable Legacy Through the Hemisphere Foundation
Establishing a Donor-Advised Fund can be an effective way to leave a lasting charitable legacy that reflects your values and priorities. You can establish a philanthropic fund that will continue to support the causes you care about on an ongoing basis. By contributing to the fund, you can ensure that your legacy will continue to make a difference in the world for generations to come.
Hemisphere’s existing clients have the opportunity to establish a Donor-Advised Fund under the Hemisphere Foundation with a minimum irrevocable contribution of $25,000 in securities or cash. Hemisphere provides the necessary investment management and administration services for the fund.
If you are not an existing client but are looking to setup a Donor-Advised Fund through a more substantial contribution, speak to one of our financial advisors.
Donor-Advised Fund Additional Information
We created the Hemisphere Foundation to support and maximize the charitable giving of our clients. Currently, there are NO setup costs or administration fees associated with opening a Donor-Advised Fund for our existing clients. The Hemisphere Foundation also does not currently charge any investment management fees on these accounts.
This is a beneficial service that we offer to our clients free of charge in an effort to encourage and support their charitable giving.
Pursuant to the changes in the 2022 Federal Budget, the minimum annual grant is 5%.
The Hemisphere Foundation’s mandate is to support a wide range of charitable activities by granting funds to qualified donees (e.g. registered charities). Donations can either be made towards the general benefit of a selected charity or towards a specific use.
Donor-Advised Funds are charitable accounts setup under the umbrella of an existing Private Foundation. These allow individuals to make tax-deductible contributions and recommend grants to charities over time. Private Foundations, on the other hand, are independent legal charitable entities created by individuals or families to manage their private charitable giving.
Donor-Advised Funds are typically a more cost-effective option for charitable giving, with lower administrative and compliance costs than Private Foundations. Donor-Advised Funds also allow donors to remain anonymous in their giving. They are, however, less flexible than a Private Foundation as control ultimately lies with the umbrella Foundation. In certain instances, a Donor-Advised Fund may be restricted by the charitable objects of the overarching private foundation.
Private Foundations, on the other hand, provide greater control over the charitable assets. Donors can engage other family members as directors in the foundation’s giving process. This may better align with the donor’s philanthropic goals. Donors are also able to setup their own charitable legal objects. However, Private Foundations require the disclosure of the donor’s identity which may lead to frequent solicitation of donations.
Overall, the choice between a Donor-Advised Funds and a Private Foundation depends on the intended donation amount and the donor’s goals, desired level of involvement, and charitable giving preferences. We are here to help if you are trying to decide between a Donor-Advised Fund and a Private Foundation.
Hemisphere manages all administration related to the Donor-Advised Funds. This includes administering grants to the qualified donees, ensuring proper tax receipts are issued, filing all applicable documents with the Canada Revenue Agency and providing a semi-annual report of individual Donor-Advised Funds.