Last time we talked about the idea of building permanent investment funds (called endowment funds) to support local community projects.  In May 2006, the federal budget eliminated the capital gains income tax on gifts of appreciated securities when given to public foundations (including community foundations) and other charitable organizations.  For example, if you own shares that have increased in value, you can give the security (shares) to one of the eligible organizations.  You will realize the tax and other benefits from the donation and will not be taxed on any of the increase in value that occurred while you held the shares.  This is a significant incentive to give back to your community.

As of last week's federal budget, this provision will now be extended to private foundations.  This will help philanthropy continue to grow in Canada and will benefit all kinds of charities.  The differnece between a public and private foundation is that a private foundation gets more than half of its capital from one source, and often has family or other related board members.  A public foundation gets its capital from more than one source and has an independent board.

Community foundations attract both wealthy and modest donors who want the benefits associated with running their own foundation, but without the administrative component.  As a rule of thumb, a minimum of $8 Million is required before it becomes efficient to create a private foundation.  However, you can have a "virtual" foundation by creating a personal or corporate fund through the Surrey Foundation for less than $3,000 per year over two years (after taking into account the tax benefits).  It really is "philanthropy for the masses".

On another note, I'm please to inform you that our fundraising evening "A Night at the Oscars" at the Sheraton Vancouver Guildford Hotel, sponsored by Coast Capital Savings, raised enough money to ensure funds donated to the Foundation go directly to financing community projects rather than funding administration costs.  Thank you to all our sponsors, and to everyone who attended and assisted!