{"id":4096,"date":"2012-10-31T00:01:00","date_gmt":"2012-10-31T00:01:00","guid":{"rendered":"https:\/\/oafdn.ca\/?p=4096"},"modified":"2022-02-12T00:02:06","modified_gmt":"2022-02-12T00:02:06","slug":"considerations-for-creating-capital-and-endowed-funds","status":"publish","type":"post","link":"https:\/\/oafdn.ca\/fr\/considerations-for-creating-capital-and-endowed-funds\/","title":{"rendered":"Considerations for Creating Capital and Endowed Funds"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"4096\" class=\"elementor elementor-4096\" wpc-filter-elementor-widget=\"1\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-2fddfe5 elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"2fddfe5\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6478420\" data-id=\"6478420\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-956657b elementor-widget elementor-widget-text-editor\" data-id=\"956657b\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><img fetchpriority=\"high\" decoding=\"async\" class=\"size-medium wp-image-4097 alignleft\" src=\"https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/capital_fund-300x226.jpg\" alt=\"plant growing on coins\" width=\"300\" height=\"226\" srcset=\"https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/capital_fund-300x226.jpg 300w, https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/capital_fund-16x12.jpg 16w, https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/capital_fund.jpg 398w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p><p style=\"font-weight: 400;\">Arts managers ask us \u2013 why hold money in an endowment, where we only receive income and can never access the invested capital ? Investment returns have fallen and I\u2019m not sure I can count on receiving income.<\/p><p style=\"font-weight: 400;\">\u00a0<\/p><p>\u00a0<\/p><p>\u00a0<\/p><p>\u00a0<\/p><p style=\"font-weight: 400;\"><b><strong>Capital Funds<\/strong><\/b><\/p><p style=\"font-weight: 400;\">Capital funds, whether endowed (income only and capital is invested in perpetuity), or a restricted fund (income and limited access to capital under certain conditions) offer an arts organization a stream of income, that through its constancy, helps protect the organization from swings naturally occurring in earned income or fund raising activities. Capital invested in this way is a source of income that recurs and is usually unrestricted \u2013 you determine how best to use it each year. You may add it straight into your operating budget, but we observe that thoughtful arts organizations use it to invest in the future \u2013 through arts education, youth programs or scholarships to support emerging talent, as well as supporting strategic investments in program\/mission.<\/p><p style=\"font-weight: 400;\">A long term fund can meet both your planning needs and the desires of your donors who want to create a personal legacy through a gift delivering a stream of income \u2013 one that sustains over time the arts they are passionate about. People of all means give time, and money to support an art form , an artist or arts organization important to them. That desire to support is usually lifelong and often is a process evolving from volunteer, to annual gifts and ultimately legacy gifts\/bequests. The decision making process is unique to every person or family. Connecting to the values and interests of donors is essential to your financial stability and long term funds, endowed or restricted are a tool you should have in place to respond to different styles of giving. People of modest means can and do make meaningful financial contributions, often through a final gift or bequest.<\/p><p style=\"font-weight: 400;\">\u00a0<\/p><p style=\"font-weight: 400;\"><b><strong>Organizational Needs<\/strong><\/b><\/p><p style=\"font-weight: 400;\">When developing your mission, or\u00a0implementing a strategic plan for the next five years, managers and board members will identify if the organization needs to think of capital in the short term \u2013 a board restricted fund that serves a \u2018rainy day\u2019 fund, or a plan to build capital funds that accumulate funds to create streams of future income \u2013 providing flexibility to invest in new, adapt to changing circumstances, invest in facilities or sustain the legacy of an artistic founder. Just as donors are unique, so are arts organizations. You need to ask yourself where your organization sits in its development \u2013 ask yourself:<\/p><ul style=\"font-weight: 400;\"><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Do you have a firm grasp of your current liquidity needs \u2013 are all financial sources needed for today<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Is your organization able to create reserve funds for investment or to meet a short term funding gap<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Has your board thought about how long term gifts will help sustain your arts mission<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Can you direct long term income from gifts towards\u00a0\u00a0priorities of the organization such as outreach, education<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Does your organization have the capacity, or access to expertise to manage long term gifts<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Would a long term gift that is subject to restrictions offer any risk to your organization<\/li><li>\u00a0<\/li><li>\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0Will a focus on long term gifts take away resources that are required to meet current funding needs<\/li><li>\u00a0<\/li><\/ul><p style=\"font-weight: 400;\"><b><strong>The Evolution of an Endowment<\/strong><\/b><\/p><p style=\"font-weight: 400;\">Historically, endowment meant capital was to be preserved and invested, generating a source of annual income. That often meant in \u2018perpetuity \u2013 forever\u2019 \u2013 one way to think of this or explain to a donor is a gift that will last 100 years or longer. Fewer donors think this way, and appreciate solutions that are long term, but also allow them to \u2018see\u2019 their gift at work. Endowment in this sense translates into a capital restricted fund \u2013 income is generated, but the capital may potentially be accessed in special circumstances\/needs, or a fund is designed to last for a stated period \u2013 10 \u2013 20 years.<\/p><p style=\"font-weight: 400;\">Understanding the demographic profile of your donors and the values important to them is important when discussing the best structure for a long term gift of capital.\u00a0\u00a0It both strengthens the connection between your organization and arts program to the donor and helps create a planning result that meets your financial funding needs today and over a longer time frame.<\/p><p style=\"font-weight: 400;\">For every person wanting to support your organization financially, there are many options to link their values and aspirations to your business needs \u2013 be they current year\u2019s programs, or a income that supports strategic goals long term in nature. Making informed decisions, both on your part and with your donors and their advisors is most important \u2013 to ensure support sustains you today and sustains your mission for years to come \u2013 continuing to spin \u2018straw into gold\u2026.\u201d<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>Arts managers ask us \u2013 why hold money in an endowment, where we only receive income and can never access the invested capital ? Investment returns have fallen and I\u2019m not sure I can count on receiving income. \u00a0 \u00a0 \u00a0 \u00a0 Capital Funds Capital funds, whether endowed (income only and capital is invested in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4097,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"nf_dc_page":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[16],"tags":[],"class_list":["post-4096","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Considerations for Creating Capital and Endowed Funds - Ontario Arts Foundation<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/oafdn.ca\/fr\/considerations-for-creating-capital-and-endowed-funds\/\" \/>\n<meta property=\"og:locale\" content=\"fr_CA\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Considerations for Creating Capital and Endowed Funds - Ontario Arts Foundation\" \/>\n<meta property=\"og:description\" content=\"Arts managers ask us \u2013 why hold money in an endowment, where we only receive income and can never access the invested capital ? 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