Endowments are an important funding mechanism within the charitable sector, but we have gone through a period where we have built up the mythology of endowments without adequate critical reflection. There are other funding models, such as Schulich’s high-payout funds and spend-down funds. Capital can also be invested in enterprises that produce both monetary as well as mission return. Can we make better use of our charitable capital?

The middle ground between the immediately expendable fund and the perpetual endowment is the spend-down or time-limited fund. They are now offered by institutional charities as well as public foundations with donor advised funds. A “spend-down” fund is created with a single large gift, but expended within a defined period of time for maximum philanthropic benefit. With estate gifts the timetable is built in upfront. For example, the fund may pay out in equal instalments over ten years.

This March 2015 article was published in The Philanthropist Journal when I was co-editor. It is the introduction to an influential series on Canadian Charities Working Internationally, which eventually led to new rules that enable grants to non-qualified donees in the Income Tax Act 2022. These rules also apply to grants to other entities carrying out charitable work, such as Canadian not-for-profit organizations.

Changes to the Alternative Minimum Tax (AMT) rates and rules are scheduled to take effect on January 1 and for the first time AMT will apply to charitable donations from high-income individuals. This is poor tax policy that will produce unintended community harm, as I recently outlined elsewhere. Intelligence Memo published by CD Howe Institute

Imagine Canada is doing a public consultation on whether Canada should increase the donation tax credit rate to encourage more giving. This is my response. April 4, 2025

Charities do not exclusively depend on donations, despite popular perceptions to the contrary. In Canada, government funding and earned revenue contribute more to registered charities than donations.  Both these types of low-key funding are under pressure, enough so that we will soon witness some large charities shrink or even collapse. February 2025

In the 1970s, Canadian charity law dramatically evolved and became imbedded in the Income Tax Act.  While this is ancient history, I have personal connections with the drafting Working Group at the Department of Finance that I rediscovered. To my delight, after 45 years, I reconnected with one of the drafters in Ottawa this summer.  Aura (Elliott) Vaucrosson was the mother of one of my childhood friends, Jean-Paul, or JP.  At the time, I had no idea about her professional life, and I couldn’t imagine how it would connect with mine. September 2024

A hot topic among charities is anonymous grants from foundations with donor advised funds.  Charities receive grants but they often don’t know the identity of the donor or fund that recommended the grant. It is an important for both foundations and charities to work together to make the process better. May 2024

Technology sometimes produces unanticipated consequences.  Witness Canada Revenue Agency.  To its credit, CRA has implemented secure, mostly user-friendly technology over the past 20 years.  For charities this includes online accounts and user-friendly “checklist” tools for charities. Unfortunately, these features sometimes create a special set of challenges for registered charities and testamentary private foundations. March 2024

The Special Senate Committee on the Charitable Sector is interested in “donor advised funds” or DAFs. In particular, members of the Committee are suggesting that the Income Tax Act should be changed to require individual funds to have minimum disbursement quotas and separate regulatory reporting. This policy trial balloon is worth debating. If for no other reason than a lot of Canadians now have their philanthropic and estate plans centred on foundations with donor advised funds. 2021