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June2016
Agreement between Te Karaka Foundation, an incorporated charitable trust, (Charities Registration Number CC51935), “the Foundation”; and
“the Organisation”.
Name & Charities Registration Number (if applicable)
The parties agree to the following:
1.Fund Establishment
The Organisation will establish a Named Endowment Fund (“the Fund”) with the Foundation.
Fund NamePurpose(s) of theFund
Date of initial contribution
Initial contribution amount
Establishment Donation*
Minimum fund balance
Contact Name
Contact Position
Phone Number
Financial year end / Day:Month:
Solicitor’s Details
* Organisations are invited to make a one-off establishment donationwhich goes towards the operating expenses of Te Karaka Foundation. This donation allows the Foundation to establish and administer the organisation’s fund, continue to build the profile of the Foundation, and encourage other potential donors to contribute or set up their own fund.
2.Te Karaka Foundation Obligations
2.1.The Foundation will establish and administer the Fund for the Organisation, in accordance with the Foundation’s trust deed and current policies, having particular regard to the purposes of the Fund as set out in Section 1 above.
2.2.All individual donations to the Fund will be issued with a tax receipt.
2.3.All monies received into the Fund will be invested in accordance with the Foundation’s investment policy, as agreed by its trustees from time to time, and treated in the same way as all other endowment funds received. Although the Foundation will keep a separate accounting record for the amount in the Fund, all of the endowment funds administered by the Foundationwill be pooled and invested and the income and the changes in capital value shared proportionately. The Foundation does not guarantee investment returns or the amount available for distribution each year.
2.4.It is intended that distributions will be made to the Organisation annually in one payment, provided the total value of the Fund has reached $50,000.
2.5.Any investment income that the Fund makes in excess of the sums attributed to administration and distribution will be reinvested into the Fund each year.
2.6.At the end of the Foundation’s financial year, the Foundation will providethe Organisation with an annual summary of all donations received, investment income and disbursements forthe Fund.
2.7.The Foundation will assist the Organisation to promotethe Fund tothe Organisation’s members and supporters, in order to encourage their contributions forthe Fund.
2.8.Should the Organisationcease to meet the legal test of being a charitable organisation, the Foundation will:
- Retain any distributions until such time as the Organisation again meets the legal test; provided that should the Organisation cease to meet the legal test for a period of more than 24 months, the provisions of 2.8 b. below will apply;
- In circumstances where the Organisation ceases to meet the legal test for a period of more than 24 months, the Foundation and the Organisation’s committee will agree to:
- make distributions from the Fund that would otherwise have gone to the Organisation, to another beneficiary (or beneficiaries) which has/have charitable purposes and objectives similar to those of the Organisation; or
- transfer the balance of the Fund into another fund with charitable purposes and objectives similar to those of the Organisation; or
- if no beneficiaries or funds with charitable purposes and objectives similar to those of the Organisation exist, transfer the balance of the fund to the Foundation’sTaranaki Fund[1].
- Should the Organisation cease to exist or be wound up, the provisions of 2.8 b. above will apply.
3.Organisation Obligations
3.1.The Organisation will immediately notify the Foundation should the Organisation cease to qualify as a charity for any reason.
3.2.The Organisation will notify the Foundation of any relevant changes in the legal structure of the Organisation; or appointed contact people and contact details as provided in Section 1.
3.3.The Organisation will actively encourage its members and supporters to contribute to the Fund, by promoting it via newsletters, brochures, website and in any other way considered appropriate.
3.4.The Fund will be recognised and promoted as the Organisation’s preferred endowment vehicle.
3.5.The Organisation undertakes that all distributions received from the Foundation via the Fund will be utilised for a charitable purpose, in accordance with current New Zealand legislation and the purposes of the fund as set out in Section 1 above.
3.6.The Organisation agrees that the Trustees of the Foundation may withhold an amount each year from the income of the Fund to be applied towards the Foundation’s operating expenses. At the date of this application the operating donation is limited to 1% of the capital value of the Fund per annum; and the Organisation acknowledges this amount may be varied from time to time by the Foundation.
4.Distributions of Capital
4.1.The Organisation acknowledges that capital distributions will be permitted by the Foundation in the following circumstances:
- The capital distribution must not result in the balance of the Fund falling below the minimum balance stated in Section 1;
- The Organisation must give the Foundation a minimum of 60 days notice in writing of its desire to receive a capital distribution;
- Any request to the Foundation to make a capital distribution must be accompanied by an explanation as to the reason for the distribution including details of how the money will be used; and a resolution approving the request for the capital distribution, signed by at least 75% of the members of the Organisation’s committee.
- In addition to 3.6 above, the Organisation will,at the time that the capital distribution is made, pay Te Karaka Foundation a brokerage fee amounting to 0.50% of the value of any capital distribution made.
- The making of capital distributions will be at the sole discretion of the Foundation.
5.General
- This Memorandum of Understanding may only be varied by the agreement of both parties in writing.
- Both parties agree to act in good faith and use their best endeavours to meet their respective obligations set out in this Memorandum of Understanding in the spirit within which the Memorandum of Understanding is entered.
6.Privacy Policy
Te Karaka Foundation takes your privacy seriously and is committed to protecting your personal information.
The Foundation has very strict privacy policies and strives to keep your personal information secure. The information collected in this Memorandum is only used in relation to the establishment and ongoing management of your Fund. Any personal information you provide is held and processed in accordance with the Privacy Act 1993.
Access to your information is to authorised persons only. You have the right to access your information and request incorrect information be corrected. The Foundation will take all reasonable steps to ensure that your information is accurate, up to date and relevant, and stored and processed in accordance with sound practices of record keeping and information systems management.
Signed for Te Karaka Foundation (CC51935)
______Date______
Name: ______Position: ______
______Date______
Name: ______Position: ______
Signed for [the Organisation]
______Date______
Name:______Position: ______
______Date______
Name: ______Position: ______
[1]Te Karaka’s Taranaki Fund is a general-purpose fund to support the Taranaki community, with grants allocated each year by the Foundation’s Distribution Committee.