To start a charitable foundation, it is important to learn more about the different types of registered charities, write a comprehensive business plan, and secure financing.
Choose a Cause
The first step is to choose a charitable cause such as helping communities in developing countries, clothing poor people, helping people with disabilities or eating disorders, or helping neglected or physically abused kids. Or you can choose to support the poor and homeless, single mothers, or mentally challenged children. There is plenty of choice when it comes to charitable causes.
In Canada, registered charities fall in three categories, private foundations, public foundations, and charitable organizations. Charitable foundations, in particular, raise funding from different donors and use the money for charitable activities. They fall under different jurisdictions, including territorial and provincial, and the federal government. Preferential tax treatment applies as well as tax exemptions to support charitable activities.
Business Plan and Sections
Writing a good business plan is one way to secure funding for your charitable foundation. The business plan covers different sections such as organizational structure, executive summary, operational plan, etc. It is a good idea to include a section that describes your organization, including legal status, current state, history, and aims, values, mission, and vision. Make sure you list core values such as openness, quality, participation, inclusiveness, non-discrimination, sustainable living, etc. In your operational plan, focus on things such as legal requirements, equipment and premises, resources required, and day-to-day operations. When it comes to financing, key elements include your pricing strategy, sources of income, expenditure and costs, and forecast, i.e. cost table and cash flow forecast. It is a good idea to include a section on risk, including operational and financial risk (see here), compliance and regulatory risk, and external and governance risk. Finally, it is important to include the biographies of staff, including your trustees and management team.
Sources of Financing for Your Charity
Charities rely on different sources of funding such as the government, transfers from businesses, earned income, gifts and donations, and others. Major sources include programs and agencies such as the Youth Stem Program in Ontario, the Ontario Trillium Foundation, and more.
More Options @ Life on credit
In some cases, charities need external financing in the form of a loan (see here), for example, to buy or upgrade equipment or materials, to renovate, purchase, or build a facility, or to meet operating needs. This is also the case when a charitable organization needs bridge financing or seeks to diversify its funding sources. Some charities also apply for external financing to increase their revenue stream. In these cases, one option is to apply with finance companies and another is to borrow from a fund. Funds like the Community Forward Fund, for example, offer loans to non-for-profit organizations based on factors such as capacity, plans, and financial requirements and story.
Corporate Funding Programs
In Canada, corporate funding programs are run by different organizations and institutions, including Air Canada, the Affinity Credit Union, Bell Canada, BC Hydro – Community Investment, and others. The Affinity Credit Union, for example, devotes 3 percent of its pretax income to non-for-profit organizations working in different areas. The union supports charities with a focus on agriculture, community building, affordable housing, arts and culture, youth programming, economic development, and so on. The Allstate Foundation of Canada supports charitable organizations working in different areas, including home and road safety, crime prevention, education, and others. Alcan Inc. also supports charitable organizations with a focus on community services, the environment, healthcare research, technology, education, etc. Other players to look into include BMO Financial Group, the BGL Foundation, Fairmont Hotels and Resorts, and many others.