Memorandum of Understanding (Community Organisation Name) (date) 2018 Agreement between Te Karaka Foundation, an incorporated charitable trust, (Charities Registration Number CC51935), Te Karaka ; and (CC ) the Organisation. The parties agree to the following: 1. Fund Establishment The Organisation will establish a Named Endowment Fund ( the Fund ) with Te Karaka. Fund Name Purpose(s) of the Fund Date of initial contribution Initial contribution amount Establishment Donation* Minimum fund balance Address Contact Name Contact Position Phone Number Email Financial year end Day: Month: Solicitor s Details * Organisations are invited to make a one-off establishment donation which goes towards the operating expenses of Te Karaka Foundation. This donation allows Te Karaka to establish and administer the organisation s fund, continue to build the profile of Te Karaka, and encourage other potential donors to contribute or set up their own fund.
Page: 2 2. Te Karaka Foundation Obligations 2.1. Te Karaka will establish and administer the Fund for the Organisation, in accordance with Te Karaka 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 Te Karaka 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 Te Karaka will keep a separate accounting record for the amount in the Fund, all of the endowment funds administered by Te Karaka will be pooled and invested and the income and the changes in capital value shared proportionately. Te Karaka 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, once the total value of the Fund has reached $50,000. 2.5. Investment income that the Fund earns in excess of the sums attributed to administration and distribution will be reinvested into the Fund each year. 2.6. At the end of Te Karaka s financial year, Te Karaka will provide the Organisation with an annual summary of all donations received, investment income and disbursements for the Fund. 2.7. Te Karaka will assist the Organisation to promote the Fund to the Organisation s members and supporters, in order to encourage their contributions for the Fund. 2.8. Should the Organisation cease to meet the legal test of being a charitable organisation, Te Karaka will: a. 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; b. In circumstances where the Organisation ceases to meet the legal test for a period of more than 24 months, Te Karaka and the Organisation s committee will agree to: i. 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 ii. iii. Transfer the balance of the Fund into another Te Karaka endowment 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 Taranaki Community Fund 1. 2.9. Should the Organisation cease to exist or be wound up, the provisions of 2.8 b. above will apply. 1 Te Karaka s Taranaki Community Fund is a general-purpose fund to support the Taranaki community, with grants allocated each year by Te Karaka s Distribution Committee.
Page: 3 3. Organisation Obligations 3.1. The Organisation will immediately notify Te Karaka should the Organisation cease to qualify as a charity for any reason. 3.2. The Organisation will notify Te Karaka 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 acknowledges: a. The minimum initial contribution to establish the fund is $5,000. b. If the Organisation s fund does not reach a balance of $50,000 within ten years of this Memorandum being signed, the accumulated donations may not qualify for a Named Endowment Fund. In this situation, Te Karaka and the Organisation will agree to: i. Distribute the balance of the Fund to the Organisation; OR ii. iii. Transfer the balance of the Fund into another Te Karaka endowment fund or funds with charitable purposes and objectives similar to those outlined in Section 1 above; OR If no funds with charitable purposes and objectives similar to those of the Organisation exist, to transfer the balance of the fund to the Taranaki Community Fund 1. 3.6. The Organisation undertakes that all distributions received from Te Karaka 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. 3.7. The Organisation agrees that the Trustees of Te Karaka may withhold an amount each year from the income of the Fund to be applied towards Te Karaka s operating expenses. At the date of this application the operating donation is limited to 2% of the capital value of the Fund per annum; and the Organisation acknowledges this amount may be varied from time to time by Te Karaka with the Agreement of both parties. 4. Distributions of Capital 4.1. The Organisation acknowledges that capital distributions will be permitted by Te Karaka in the following circumstances: a. The capital distribution must not result in the balance of the Fund falling below the minimum balance stated in Section 1; b. The Organisation must give Te Karaka notice in writing of the amount and purpose for the capital distribution, and acknowledge it may take up to 60 days for Te Karaka to process this application.
Page: 4 c. The request to Te Karaka must be accompanied by a resolution approving the request, passed by the Organisation and signed by two of its Trustees/ Committee Members. 4.2. In addition to the operating donation in section 3.7 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. 4.3. The making of capital distributions will be only after consultation between the Organisation and Te Karaka Foundation. 5. General 5.1. This Memorandum of Understanding may only be varied by the agreement of both parties in writing. 5.2. 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. Te Karaka 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. Te Karaka 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 Signed for [the Organisation]
Page: 5 MOU 2018