Legacy funds are funds set up by individuals or families that wish to leave an indelible mark for themselves, or in honor of a hero in their lives. Such funds are dedicated to a cause(s) that those heroes in their lives, living or departed, are passionate about.
The causes to which the fund can support include education scholarships, health, improving the welfare of the girl child, improving youth livelihoods, working with persons abled differently, environmental conservation and natural resource management, just to mention but a few.
KCDF’s Trustees and Board Members ensure that the funds raised in the legacy fund are professionally managed by reputable fund managers and the yields from the fund are dedicated to the causes they intend to support.
The Legacy funds are pooled with KCDF’s endowment fund to maximize on the investment yields accrued. With the economies of scale, this pooling of funds generates considerable higher returns than when invested alone.
All You Need to Know About Endowment and Legacy Funds
1. What is the minimum amount with which I can setup a designated fund or a legacy fund?
The minimum viable amount to initiate a designated fund with a preferred name of an initiator is Kes. 500,000 ($ 5000)
2. How are designated endowment/legacy funds invested?
All funds are invested together with the KCDF endowment fund.
3. How are designated funds managed?
KCDF trustees whose combined skills, make them better to manage the funds with support from appointed service providers. The trust meets on a quarterly basis to assess the performance of the funds.
4. What are the benefits of investing with the KCDF Endowment Fund vis-a - vis other investment regimes?
Tax Exemption. All KCDF endowment funds enjoy tax exemption status on all investment income.
Pooling of Resources. This allows the endowment or legacy fund benefits from economies of scale and the excellent stewardship and track record of the Foundation’s investment management.
Investment Strategy. KCDF’s Board of Trustees has developed an investment policy which it reviews from time to time to ensure relevance to the local context.
Investment Expertise. Through a competitive process, credible fund managers, custodian and an administrator are identified in compliance with the Retirement Benefit Authority (RBA) guidelines. This ensures that the funds raised by legacy and community fund builders are not exposed to unnecessary risks.
Reduced Management Burden of Grant-making. KCDF’s core business is in grant management and capacity building. By setting up a legacy or designated fund with KCDF, one benefits from the years of experience that KCDF has, thus reducing the burden of the day to day management of the fund. KCDF involves initiators in determining the priority areas of support.
Perpetuity. All endowment funds are set and structured to be perpetual in nature and the yield will continue to meet the set objective in perpetuity.
Capacity Building Support on Fundraising. Endowment or legacy fund initiators have access to fundraising support from KCDF.
5. What is the minimum period within which you can access the yields of your fund?
Although KCDF does not have a minimum time frame, we encourage the fund builders to contribute towards the principal amount until the yields are adequate to make meaningful impact to the causes that they want to support.
6. What instruments does KCDF use to invest the designated funds?
The investment structure is a mixed portfolio containing Equities, Treasury Bills and Bonds, Fixed-Term Deposits and Real Estate.
7. Who decides on how the funds are invested?
KCDF Trustees have full mandate to decide on how the funds are invested and managed. The decisions taken are informed by due diligence and expertise from the service providers appointed by the Trustees, who understand the local context of the investments market in Kenya.
8. What other measures does KCDF take to ensure the decisions made by the Trustees provide security to the designated funds?
KCDF has indemnified the Trustees as a further measure to ensure the decisions made by them are for the initiators good, as well as the public good.
9. Do I have a say in how the designated funds are utilized?
Yes, the fund initiator determines how the yields are spent.
10. Who makes the grants from the yield accrued from the fund?
KCDF makes the grants to meet the objective of fund unless the fund initiator has the capacity and credible mechanism to make the grant.
11. What is the cost of administering the fund?
KCDF negotiates for a minimal fee with the service providers, usually below 2% of the fund, and as the fund becomes bigger, the administration costs decreases.
12. How often does KCDF communicate to you about your Fund?
KCDF is available at all times to clarify on any issues regarding your fund. However, KCDF holds a fund builders forum annually where all fund initiators are updated on the status of their funds.
13. Are the designated funds audited?
KCDF undertakes annual audits of the funds with reputable firms and the report is made public on our website for accountability and transparency.