Endowment Fund
Establishment
June 2016
Guidance for Professional Advisers
The following is a guide for professional advisors who have clients intending to make
a donation to Te Karaka Foundation.
A Named Endowment Fund can be established by making a one-off donation of
$50,000 or more; or by committing to make a series of annual donations totalling at
least $50,000 within 10 years. Granting from a Named Endowment Fund will begin
once the fund reaches $50,000. Associated privileges of a Name Endowment Fund
include:

Donor can specify which charities or charitable purposes receive the
annual distributions from their Named Fund.

Public acknowledgement of the donation (if desired).

Annual reporting to the donor and his/her descendants.
All Named Endowment Funds need to have a Memorandum of Wishes prepared. A
template is attached, and the latest version is available from Te Karaka Foundation’s
website (www.tkf.org.nz).
below.
Guidance for completing the Memorandum is given
For large donations (greater than say $500,000) donors can have more
flexibility as to the wording of the Memorandum and their level of involvement with
distribution decisions.
Note that one-off donations of less than $50,000 will go into Te Karaka’s Taranaki
Fund. The Trustees of the Foundation can make annual distributions from this Fund for
any charitable purpose (or purposes) within the Taranaki region, at the sole
discretion of the Trustees. No Memorandum of Wishes is required for donations to Te
Karaka Foundation’s Taranaki Fund. However, the notes below regarding Will clauses
and donations from a Family Trust may be helpful.
The Foundation will acknowledge all donations received and send the donor a Tax
Receipt.
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June 2016
Professional advisors can either complete the Memorandum of Wishes Form with
their client themselves, OR contact Te Karaka Foundation’s executive team, who will
meet with your client to finalise the details of the donation. If you are assisting your
client, please:
A. COMPLETE THE “MEMORANDUM OF WISHES” FORM
1. Include the client’s contact details and the name of the fund (this could be
the Donor’s name, or something else chosen by the Donor).
2. Intended Beneficiaries (section 3)
i.
These beneficiaries must operate for a charitable purpose as
recognised by the Charities Commission and the Inland Revenue
Department. If your client nominates a charity that is nationwide but
wishes their distributions to be used in the local region, this must be
specified.
ii.
Your client may wish to specify several charities, e.g. 25% to ABC
school, 25% to XYZ charity and 50% to be distributed to any charitable
purpose (or purposes) within the Taranaki area at the discretion of the
Trustees of the Foundation.
iii.
If your client wishes all of their annual distribution to be at the trustees’
discretion, then write 100% in section 3a.
3. Donation Value (section 4)
Donors can make a lump-sum contribution now, contribute to their fund over
their lifetime, and/or leave a bequest in their will or make a distribution from a
family trust. Please specify how the donation(s) will be made.
4. Establishment Donation (section 5)
Te Karaka Foundation invites donors to make an establishment donation
($5,000 is suggested as a guide) towards its operating expenses. Donors may
choose to pay this at the time of establishing their fund, pay say $1,000
annually for 5 years, or it can be paid at the time the Foundation receives the
funds (eg: in the case of a bequest). Establishment donations during a
donor’s lifetime are eligible for a 33.3% income tax credit (up to the value of
the donor’s taxable income).
5. Authorisation for Name Disclosure (section 8)
It can be very encouraging for people to see donors listed whom they know
and respect. However, Te Karaka Foundation appreciates that some donors
may prefer anonymity and will only list names where we have been given
authority to do so.
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June 2016
6. Founding Donors Offer (section 9)
Qualifying donations made during the 2016 calendar year will receive special
recognition. This is a once-only offer, to acknowledge those who support the
Foundation in its early stages.
Once the Memorandum of Wishes Form has been completed and signed by your
client please post to Te Karaka Foundation, P.O. Box 719, Taranaki Mail Centre, 4340,
New Plymouth (or email to info@tkf.co.nz) for our records. Te Karaka Foundation will
then make personal contact with your client, to acknowledge their generosity.
B. AMEND YOUR CLIENT’S WILL
If your client wishes to leave a bequest (as part of a named endowment, or as a
donation to the Community Fund) in their will, please see the Suggested Will Clauses
(attached and provided on the Te Karaka Foundation website www.tkf.org.nz), to
determine the appropriate clause for your client’s situation.
C. FUNDS BEING DONATED FROM A TRUST
If your client’s Te Karaka Foundation donation is to be provided from a client’s Trust,
you may need to add a Memorandum of Wishes to the instructions. See the
Suggested Clauses for Family Trusts (attached and provided on the Te Karaka
Foundation website www.tkf.org.nz) to determine the appropriate clause for your
client’s situation.
FOR FURTHER INFORMATION
Please do not hesitate to contact the Foundation’s Executive Team should you have
any questions:
Foundation Office
Melanie Wilson
Vicki Haylock
06 758 0899
021 178 2642
021 172 0622
info@tkf.org.nz
melanie@tkf.org.nz
vicki@tkf.org.nz
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Suggested Clauses for Wills
1. Bequest of any amount to Te Karaka Foundation to be added to Te Karaka’s
Taranaki (General Purposes) Endowment Fund
I GIVE the sum of $_________ [or ___% of the residue of my estate] to Te Karaka
Foundation, an incorporated charitable trust (Charities Registration Number
CC51935), to be added to its Taranaki Endowment Fund. I direct that the receipt
of any officer of Te Karaka Foundation shall be a full discharge to my trustees.
2. Bequest of $50,000 or more to Te Karaka Foundation to establish a Named
Endowment Fund
I GIVE the sum of $_________ [or ___% of the residue of my estate] to Te Karaka
Foundation, an incorporated charitable trust (Charities Registration Number
CC51935), to be used to create an Endowment Fund named _____________ ___.
A Memorandum of Wishes signed by me and dated ________ sets out my wishes
regarding this endowment, including the charities or causes that I wish to benefit
from distributions from this Endowment Fund. I direct that the receipt of any
officer of Te Karaka Foundation shall be a full discharge to my trustees.
3. Bequest of any amount to Te Karaka Foundation to be added to an existing
Named Endowment Fund
I GIVE the sum of $_________ [or ___% of the residue of my estate] to Te Karaka
Foundation, an incorporated charitable trust (Charities Registration Number
CC51935), to be added to the Endowment Fund named ________________
established by Deed of Gift and Memorandum of Wishes dated ________. I direct
that the receipt of any officer of Te Karaka Foundation shall be a full discharge to
my trustees.
4. Residue to Te Karaka Foundation as default beneficiary
IF ALL OF THE ABOVE TRUSTS FAIL, I GIVE my residuary estate to Te Karaka
Foundation, an incorporated charitable trust (Charities Registration Number
CC51935) to be added to its Taranaki Endowment Fund. I direct that the receipt
of any officer of Te Karaka Foundation shall be a full discharge to my trustees.
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Suggested Clauses for Family Trusts
Your clients may have the bulk of their assets in a family trust and may wish to
consider a distribution from their family trust to Te Karaka Foundation as a
beneficiary. The family trust deed will need to include any charitable trust or Te
Karaka Foundation as a beneficiary.
A letter of wishes to the trustees of their family trust can then include one of the
following clauses:
1. Distribution of any amount to Te Karaka Foundation to be added Te Karaka’s
Taranaki (General Purposes) Endowment Fund
Distribute the sum of $_________ [or ___% of the net assets of the trust] to Te
Karaka Foundation, an incorporated charitable trust (Charities Registration
Number CC51935), to be added to its Taranaki Endowment Fund. I direct that
the receipt of any officer of Te Karaka Foundation shall be a full discharge to my
trustees.
2. Distribution of $50,000 or more to Te Karaka Foundation to establish a Named
Endowment Fund
Distribute the sum of $_________ [or ___% of the net assets of the trust] to Te
Karaka Foundation, an incorporated charitable trust (Charities Registration
Number CC51935), to be used to create an Endowment Fund named
________________. A Memorandum of Wishes signed by me and dated ________
sets out my wishes regarding this endowment, including the charities or causes
that I wish to benefit from distributions from this Endowment Fund. I direct that the
receipt of any officer of Te Karaka Foundation shall be a full discharge to my
trustees.
3. Distribution of any amount to Te Karaka Foundation to be added to an existing
Named Endowment Fund
Distribute the sum of $_________ [or ___% of the net assets of the trust] to Te
Karaka Foundation, an incorporated charitable trust (Charities Registration
Number CC51935), to be added to the Endowment Fund named
________________ established by Deed of Gift and Memorandum of Wishes dated
________. I direct that the receipt of any officer of Te Karaka Foundation shall be
a full discharge to my trustees.
4. Distribution to Te Karaka Foundation as default beneficiary
IF ALL OF THE ABOVE TRUSTS FAIL, Distribute the net assets of the trust to Te Karaka
Foundation, an incorporated charitable trust (Charities Registration Number
CC51935) to be added to its Taranaki Endowment Fund. I direct that the receipt
of any officer of Te Karaka Foundation shall be a full discharge to my trustees.
Guide V3 Jun-16
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