External Investment Manager Program

A firm’s book of business will not shrink when a client decides to make a substantial charitable gift. A firm may continue to manage the assets in the fund even after the donor’s death if the firm’s investment performance continues to meet Niagara Community Foundation’s standards. In other words, the firm could manage the assets indefinitely. A firm will enhance its relationships with philanthropic clients and their families because it will be involved directly in decisions affecting the success of its philanthropy on an ongoing basis. A firm will be assured of a key position within a client’s estate and financial advisor network leading to increased opportunities for client referrals.

A simple fund agreement is used to create the donor’s fund at Niagara Community Foundation. The donor has several types of funds to choose from; however, the most common fund type selected by today’s donors is a donor-advised fund. The minimum contribution to the fund is $1,000,000. Gifts under this amount will be considered on a case-by-case basis. To qualify for a donation receipt under the Income Tax Act (Canada), the donor must transfer ownership and legal control of their portfolio assets to Niagara Community Foundation. The definition of a “gift” in the Act must be met to protect both the donor and Niagara Community Foundation. This means that the investment firm’s contractual relationship shifts from the client/donor to Niagara Community Foundation. However, the client/donor may remain involved as an advisor to Niagara Community Foundation and is entitled to receive copies of annual fund statements from the Niagara Community Foundation.

Clients can continue an existing relationship with a trusted portfolio manager. Clients can have as little or as much involvement with the grant-making from their funds as they choose, and their level of involvement can change over time. The program allows clients maximum flexibility and adaptability to pursue their philanthropic goals. Clients have access to grant-making expertise and philanthropic services that are unrivalled in Niagara. Clients can consolidate all of their charitable giving through a single fund and achieve as much public recognition or privacy as they choose. Clients can take advantage of the enhanced tax credit for donations of publicly listed securities and use more complex gift structures tailored to their business and family situations.