Autumn Leaf Foundation
Autumn Leaf is a charitable foundation that allows individuals (we call you members) to set up an account within the foundation. The account consists of three parts: A) money that the member has loaned to the foundation; B) money that the member has donated to the foundation and C) the pro-rata share of the investment income earned by the foundation on #A and #B.
Part A amounts, can be repaid to the member at any time see Getting Money Out for details. Part B and C amounts can only be gifted to a Canadian registered charity they cannot be paid to the member. However the member can direct which charity or charities the funds should be gifted to.
Each quarter, the member will receive a statement showing the balance in each of three parts of their account and the amount of investment earnings credited to Part C of their account.
Funds members contribute to Autumn Leaf are not guaranteed in any way, by government or any other body. We are obligated to warn you that you could lose the entire amount you contribute. See Fund Options for detailed information on the fund choices and the risks involved.
Putting Money In
There are two ways for a member to put money into Autumn Leaf. The first method is as an interest-free loan. This is the only method that makes sense for a person who is a non-resident of Canada for tax purposes.
The other option is to make a charitable donation to the Foundation. The donation is eligible for income tax credit to the extent permitted by Canada Revenue regulations.
If you make a loan, you will receive a promissory note documenting our obligation to repay the funds to you. If you make a donation you will receive an official receipt for tax purposes.
Any investment involves some degree of risk. When you place funds with Autumn Leaf, there is no government or other guarantee securing your funds. Thus when you make the investment we will have you sign a form acknowledging you accept that risk.
Certainly we do whatever we can to minimize risk and only choose investments that we believe are sound. However, particularly in today's uncertain financial world, the risks are real. You should be aware that in a "worst-case" scenario, the amounts you loan to Autumn Leaf might not be able to be repaid.
Money that members loan or donate to Autumn Leaf are pooled with those from other members. Members have a choice of three separate funds reflecting a different level of risk. You may place your contributions in either of the funds or a portion in each.
The Oak fund is an extremely low risk fund. Funds are 100% invested in debentures that are secured by first mortgages. Because of the low risk, funds placed in the Oak fund earn a flat rate of return, currently 3% per annum. This rate is subject to change but you will be notified well in advance.
The Maple fund is a low to moderate risk fund. At least 10% of the funds will be in the same debentures as the Oak Fund. The remainder will be invested in a variety of securities, primarily those that are backed by real estate and most of which do not trade on the stock market. All investments pay a regular dividend or distribution of at least 4% per annum. The target rate of return for the Maple fund is 6% however it may be lower or higher depending on market conditions.
The Walnut fund operates the same as the Maple fund except that it is denominated in US dollars.
Autumn Leaf deducts a 0.5% management fee from the Maple and Walnut funds to cover administration costs.
A portion of the portfolio earnings in Maple and Walnut funds are held in reserve and not allocated to the members to help protect against declines in market value. If the rate of return on the fund is less than 7%, a 0.5% reserve is held back. If the fund earns 7% or greater a 1% reserve is held back.
Thus if the fund earns, 7.5%, you will actually be credited 6%. If the fund earns less than 4%, a portion of the reserve will be used to increase the overall return.
No management fee or reserve allocation are deducted from the Oak fund.
Getting Money Out
Because of the nature of the investment strategy of Autumn Leaf, funds are not immediately available. Distributions and loan repayments are made quarterly on January 31, April 30, July 31 and October 31. 90 days (ninety) written notice prior to the distribution dates are required for any distribution. For example, if you want to receive a loan repayment on April 30, you would need to notify us by January 31.
Funds will be paid to you by cheque or by direct deposit to your bank account, whichever you prefer.
Amounts that you have donated to Autumn Leaf and the earnings on the funds you have loaned and/or donated are considered the property of Autumn Leaf. They do not belong to you. However you may designate the charity or charities of your choice to receive these funds. You also have the option of setting up recurring quarterly grants so you don't need to notify us each time.
Distributions at Death
At death, any loans to Autumn Leaf will be repaid to the member's estate. When you set up a donor advised fund with Autumn Leaf, we will have you indicate what we should do with any amounts in your part B and C of your account that remain at death. See Overview section for an explanation of Part B and C.
Accountability and Transparency
Autumn Leaf Foundation is a Canadian registered charity created in the form of a charitable trust. You can verify our status with the Canadian government and view our annual filings.
All of the trustees review all of the financial records each quarter in detail. Copies of financial reports and statements of investment holdings will be available to each member each quarter along with the statement of their account. Names of individual members will not be disclosed for confidentiality reasons.
Once the foundation grows to an appropriate size an independent accounting firm will be engaged to perform an annual financial audit, the report of which will be made available to the members. At the present time, such an audit is cost prohibitive.
Autumn Leaf is overseen by three trustees all of who serve as volunteers, without compensation.
Kevin Shantz, Trustee and Executive Director, is a Chartered Professional Accountant (CA) and a Certified Public Accountant (USA). He has many years of experience managing investments for several charitable organizations.
Andrew Koch, Trustee, is a regional manager for a major financial institution in southern Ontario. He has many years of experience in the financial world and serves as a deacon in his local church.
David Clark, Trustee, has managed a significant personal portfolio of investments for many years and more recently that of private foundation. Retired from a career in the medical field he now has lots of time to devote to the financial markets.
Please feel free to contact us by phone at 519-503-5778 or email using the link below.
22 King Street S. Suite 300
Waterloo ON N2J 1N8