October 8, 2015
A group of friends open an endowment fund and have a blast every step of the way
If you think you need to be a millionaire to start an endowment fund, think again.
When Gurvinder Bhatia became a board member at Edmonton Community Foundation (ECF) in 2011, he felt it was important to show that ECF isn’t an organization that depends on the rich to help the poor. Instead, he sees ECF as an “inclusive part of the community that everyone can be involved with.”
With this in mind, Bhatia and his wife Aimee Hill thought about the $10,000 minimum required to start a fund at ECF. They wondered why one person should donate the entire lump sum when they could gather a group of friends, and have each contribute to an endowment.
“Everyone’s successful, but not wealthy so we thought it would be good to do this as a group.”
So, that’s what they did on April 2, 2013 when 22 of their closest friends gathered for salmon pt, wine and a cheque signing ceremony to open the Friends United for YEG Fund.
The 24 donors have committed to an annual donation of $500 each for the next five years. At this rate the fund will grow to $60,000 by 2018, and though the group doesn’t know which organizations they want to support yet, it will begin granting out 3.5 per cent to local charities as soon as it reaches $10,000. The group will also receive a 50 per cent tax credit for each gift, which means the individual donors will receive approximately $1,250 in tax credits over the five year period.
“Everyone’s successful, but not wealthy so we thought it would be good to do this as a group,” Bhatia says. “The minimum threshold to start a fund is $10,000, but you can take 10 years to get there. Get 20 people to contribute $500. There are so many natural groups of people out there – family groups, work organizations.”
The Friends United for YEG is a donor advised fund (DAF), explains ECF’s director of donor services Kathy Hawkesworth. DAFs are the most flexible option ECF offers and are a popular choice for donors, because they have direct influence over who gets their grants. However creating them as a group is rare.
Usually group funds are set up to memorialize friends and relatives who have passed away. Or sometimes corporations will set them up to include its employees in granting as an incentive. But Bhatia’s group is different; it’s a group of “friends building community in the greater Edmonton area,” Hawkesworth says. “I don’t know of any other that’s quite like it.”
“The minimum threshold to start a fund is $10,000, but you can take 10 years to get there. Get 20 people to contribute $500. There are so many natural groups of people out there – family groups, work organizations.”
To create the group, Bhatia reached out to his inner circle, including Carla Corbett, the Executive Director, Operations and Client Connections, Enterprise and Advanced Education, Apprenticeship and Industry Training for the Government of Alberta, who signed up immediately. Corbett has known Bhatia since he was a Grade 10 student at Old Scona High School while she was attending university with Bhatia’s sister Priti Laderoute, who is also in the fund group. Corbett jokes that she always knew Bhatia as “the little brother.”
Over the years Corbett has devoted hundreds of hours volunteering for local sports organizations including a stint at president of the Edmonton Women’s Field Hockey Association and as a board member of Field Hockey Canada. It was through her volunteer work that she became familiar with ECF. She says that the chance to help Edmonton grow from a “good city to a great city” is what attracted her to the idea of joining the group.
“We want to create opportunities so everyone can have the kinds of advantages we had,” Corbett says.
For Hawkesworth, helping donors define their purpose for the funds is the most rewarding part of her job. She takes great pleasure in helping people pinpoint the issues and causes that matter most to them, and determining how their resources can help reach their goals. For the Friends United for YEG Fund they’ll be getting together as a group once a year to discuss where they want their grant to go. And that sounds like fun.
“We have a great group of friends who just love an excuse to get together to have a good time,” Bhatia says. “It was so easy. People need to understand how simple it is to start a fund this way.”