Once a charity has decided to establish an endowment, many charities look to their local community foundation as the vehicle of choice to hold and manage their endowment in perpetuity.

What are the factors that influence their decision to use their community foundation?

Many charities wisely capitalize on the track record of their local community foundation to gain and reinforce the confidence of donors. Since 1979, London Community Foundation has a record of solid investment performance.

Organizations recognize the skill, expertise and resources required to manage a permanent endowment. Since London Community Foundation is in the full-time business of building a permanent endowment for the community, it has the resources already in place. These include:

1. a Finance and Investment Committee that recommends a financial investment policy to London Community Foundation's Board of Directors;
2. professional money managers monitored and evaluated by the Finance and Investment Committee; and
3. a Director of Finance who is a chartered accountant, and who supports the work of the Finance and Investment Committee and oversees the day-to-day related operations.

Amendments to the Trustee Act (Ontario) have presented substantial changes in law with respect to trustees' authority to invest trust assets and the trustees' fiduciary responsibilities. More and more boards recognize the significance of these obligations and are turning to their local community foundation as an alternative.           

The ability to establish a fund with the community foundation and achieve a greater return on investment over time due to the diversification and size of the portfolio has impressed many boards. Our investment results and audited financial statements can be found on our About Us, Financial Information section.

Both boards and staff of charities have been relieved to focus solely on building and strengthening their core business and to let London Community Foundation administer their endowment.

Cost efficiencies are achieved by having all funds at London Community Foundation share in the cost of a money manager, custodian, lawyers, auditors, staff expertise and general overhead.

Each year, income earned on the organization's fund is available to be used by the charity as it determines or is reinvested in the capital.

The Foundation has the technical expertise and the facility to accept gifts in a timely, cost-effective manner on behalf of the agency, e.g., transfer of shares, etc.

Because the fund is held as a fund of the Foundation, it will be publicized in Foundation materials and could attract new donors.

London Community Foundation offers its endowment program as a service to charitable organizations in this community. Currently, 23 local charities have placed endowment funds with London Community Foundation.