Advance Ashburton Community Foundation

What is Advance Ashburton Community Foundation?
Advance Ashburton Community Foundation is a registered trust which is set up to facilitate personal giving for the benefit of worthwhile community organisations and causes.

Which community organisations and causes receive payments from the Fund?
The Donor may specify particular worthwhile community organisations and causes or the Donor may leave the gift “unrestricted” so that the Foundation decides where the money is most needed each year. Many Donors choose both: they specify a certain percentage of the distribution to go to particular charitable causes and leave the rest unrestricted.

What does the Foundation actually do?

Receives Donations and Bequests
Manages each Fund - Each nominated or special purpose fund is separately monitored and accounted for. The capital of each Fund is combined with all other Funds (to achieve economies of scale) and invested as part of the whole. The Foundation has an Investment Advisory Committee whose main role is to manage the Foundation investments. The members of the Investment Advisory Committee are professional, astute investors who offer their expertise at no cost. In making their recommendations to the Board the Committee is guided by the Investment Policy as set out in our Policy Manual.
Makes distributions - Distributions from each Fund are made on an annual basis.
The Foundation makes these distributions in accordance with any instructions which have been given by the Donor. Where the donation is wholly or partially untagged, the Foundation makes the decision as to where the distributions are to be made. The Foundation has a Grants Committee whose main role is to advise on these distributions. This Committee receives applications throughout the year, investigates and considers these applications and makes recommendations to the Foundation Board as to how the available funds shall be distributed. All distributions are approved by the Board of Trustees.
Promotes generosity - The Foundation’s principal role is to promote the concept of people “giving back” to the community. We encourage the concept of giving through the Foundation as a means of sustained and ongoing benefit to our community.

What are the benefits to the Donor?

Personal satisfaction - Our Donors are very happy to know that during their lifetime or after they have died, their donation will benefit their community forever.
Tax Benefit - Every donation, made during the donor’s lifetime, of more than $5.00 to the Foundation entitles the donor to a tax credit that is one third the value of the donation (up to the limit of their taxable income). For example, a donation of $1500 entitles the donor to a $500 tax credit.
Staying within the Community - Donations are retained within the Ashburton District forever, or as directed by the donor.
Donor remembered - Unless anonymity is requested the name of the donor remains in the community forever. Recipients of funds receive information about the donor.
Funds not eroded - The administration costs of the Foundation are low so the donor’s gift is not eroded by fees and costs. The gift is also inflation adjusted.
Avoids problems of a personal Charitable Trust - Donors may establish their own personal Charitable Trust. However, the problems of having a personal Charitable Trust include:

                         (i) Ongoing trusteeships - Who will continue to manage the Trust after the Donor and the Donor’s advisers have passed on?
                        (ii) Economies of Scale - The compliance requirements and the costs associated with properly managing a Trust mean that the annual administration cost reduces the effectiveness of the gift.
         Establishing a Fund through the Foundation has much the same effect as establishing a personal Charitable Trust but without those problems.

What are the benefits to the Community Organisation or Cause?

Ongoing benefit - Most community organisations desperately need an ongoing passive income source.
Where a Donor nominates a particular organisation, that organisation knows it will continue to receive that income forever without having to go through the effort and uncertainty of making applications for grants.
The organisation can rely on that income and budget accordingly.
Asset not recorded in financial accounts - If an organisation is holding investment funds to maintain an income flow, this sometimes renders the organisation ineligible for other funding. If the investments are held by the Foundation, the organisation receives the annual donated income, but the invested capital is not part of its financial accounts.
Expert investment advice - The organisation itself does not have to worry about making investments decisions.
Extra source of funding - Even if an organisation has not been specified by any Donor, it can apply to the Foundation for part of the income from the unrestricted Funds. This is particularly valuable for new or emerging organisations and for responding to the current and immediate needs of the community.
Increased charitable giving - The Foundation is helping to change people’s attitude towards leaving gifts to community organisations and causes in their wills or making donations during their lifetime.

How are the Foundation’s expenses funded?
All Foundation Trustees and Committee members are volunteers and are unpaid. There are however, costs, (staff salaries, rent, phone, postage, marketing, etc.) in operating the Foundation. The Board aims to keep these costs as low as possible: we deliberately run a “lean and mean” operation using part-time staff and economising on rent, etc. In order to cover these operating costs, a levy of 1% of the capital of the Fund is made to the Foundation each year.