The Hospital for Sick Children Foundation Financial Practice and Transparency
1. The charity's financial affairs will be conducted in a responsible manner, consistent with the ethical obligations of stewardship and all applicable law.
2. All donations will be used to support the charity's objects, as registered with CRA.
3. All restricted or designated donations will be used for the purposes for which they were given unless the charity has obtained legal authorization to use them for other purposes. Alternative uses will be discussed where possible with the donor or the donor’s legal designate. If the donor is deceased or legally incompetent and the charity is unable to contact a legal designate, the donation will be used in a manner that is as consistent as possible with the donor's original intent. If necessary, the charity will apply to the courts or the appropriate regulatory body to obtain legal authorization to use the donation for other purposes.
4. Annual financial reports are necessary to achieve transparency and accountability to donors and the public. All charities issuing receipts should produce them and make them easily accessible. They should:
a. be factual and accurate in all material respects;
b. disclose the gross amount of fundraising revenues (receipted and non-receipted);
c. disclose the total amount of fundraising expenses (including salaries and overhead costs);
d. disclose all donations that are receipted for income tax purposes;
e. disclose the total amount of expenditures on charitable activities (including gifts to other charities);
f. segregate undesignated and designated funds (for aggregate amounts over $100,000);
g. identify government grants and contributions separately from other donations (for aggregate amounts over $100,000); and
h. Financial Statements should be prepared in accordance with Part III of the Chartered Professional Accountants of Canada (“CPA Canada”) Handbook – Accounting, which sets out generally accepted accounting principles for not-for-profit organizations in Canada, in all material respects (or disclose a discrepancy between the practice and GAAP).
SickKids Foundation (C1-4): The Audit and Finance Committee of the Board of Directors is responsible for monitoring and reporting to the Board of Directors with respect to all matters pertaining to the financial integrity of the Foundation. The Committee:
a. Monitors the ongoing financial and operating performance of the Foundation through periodic reviews of trends and variances to the Business Plan and prior periods.
b. Reviews with management any emerging practices or legislation that may materially impact the financial performance of the Foundation.
c. Ensures that there are processes in place for the development of the annual business plan of the Foundation. Review and approve the financial assumptions used by management in developing theannual business plan and any strategic plan and long range forecasts, and make recommendations to the Board of Directors with respect thereto.
d. Reviews business cases of new significant foundation activities prior to their going to the board for approval.
e. Ensures that management has appropriate internal controls in place including policies and procedures to manage the assets and operations of the Foundation.
f. Reviews the annual financial statements of the Foundation together with the External Auditor’s report thereon prior to their presentation to the Board of Directors and make recommendations to the Board with respect thereto.
g. Makes recommendations to the board of directors and through them to the members at the Annual General Meeting with respect to the appointment of external auditors. Meet with the auditors at least annually; approve fees and the scope of their external audit plan.
h. Examines other matters as may be assigned by the board from time to time.
SickKids Foundation Financial Information included in the Annual Report and Financial Statements have been prepared by management in accordance with Canadian generally accepted accounting principles, and are audited and signed by an independent accounting firm. The financial summary includes all the information as outlined above. The Foundation annual report and financial statements are available through Public Affairs and/or on our website.
5. The cost-effectiveness of the charity's fundraising programs will be reviewed regularly by the governing board. No more will be spent on administration and fundraising than is required to ensure effective management and resource development. The charity will disclose its process for evaluating its spending.
SickKids Foundation: The Foundation maintains systems of internal accounting and administrative controls of high quality, consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is relevant, reliable, accurate and complete, in all material respects, and that the Foundation’s assets are appropriately accounted for and adequately safeguarded.
The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility principally through its Audit Committee, whose members are appointed by the Board.
Each year, the Foundation engages in a detailed planning process. The assumptions used for revenue and expense plans vary for each individual fundraising program. Each program submits detailed plans which are evaluated based on incremental improvements in both revenue and expenses. A detailed operating plan is reviewed by the Foundation’s Audit and Finance Committee and approved by our Board of Directors prior to the beginning of each fiscal year. Monthly operating statements track the performance to plan by fundraising program. Quarterly operating and financial statements are viewed by the Audit and Finance Committee and presented to the Board of Directors. Overall performance is measured against plan.
The Foundation takes the additional step of having its public filings with revenue agencies formally reviewed by an external accounting firm whenever there is a material change to the filing requirements. This process is undertaken to ensure the filings by SickKids Foundation are accurate and in full compliance with the intent of tax legislation.
6. The charity will, upon request, disclose the revenue and expense assumptions for its fundraising activity as approved by its Board in its annual budget.
SickKids Foundation: SickKids is a sophisticated and complex charity. In order to ensure responsible stewardship of its fundraising, investment and granting responsibilities, the Foundation will respond to requests regarding its best available information on the gross revenue, net proceeds and costs of any fundraising activity (including the fundraising costs categorizes as education and/or public awareness) as follows:
a. Imagine Canada Ethical Code Request Form: As part of our reporting responsibility to the SickKids Foundation Board of Directors, we are required to prepare an annual report of all complaints by external stakeholders. Questions or complaints may be sent to SickKids Foundation by telephone, mail, fax or email.
b. Proprietary information: The information shared will include a confidentiality notice that states - due to the sensitive nature and potential for misinterpretation, this information is intended for your exclusive use and is not to be copied, disclosed, distributed or reproduced in any way. SickKids Foundation reserves the right to consider certain material proprietary and not for public distribution.
c. Financial information to be disclosed is audited revenues, expenses and net proceeds for fundraising programs. The audited financial information will be available on October 1 following the filing of the Foundation’s T3010 with the Canada Revenue Agency.
7. If the charity has annual revenue in excess of $250,000, the financial statements are audited by an independent public accountant. SickKids Foundation: SickKids Foundation Financial Information included in the Annual Report and Financial Statements have been prepared by management in accordance with Canadian generally accepted accounting principles and are audited and signed by an independent accounting firm appointed by the Foundation’s Board of Directors.
8. If the charity’s investable assets surpass $1,000,000, an Investment Policy will be established setting out asset allocation, procedures for investment decisions, and asset protection issues.
SickKids Foundation: The Foundation’s Statement of Investment Policies and Objectives governs the investment management of the Foundation’s endowment and is intended to provide guidance to investment advisors.
Funds to be invested by the Board include all endowment funds, and restricted and unrestricted charitable gifts.
The primary investment objectives of the Fund are (1) to preserve the capital, (2) to attain an average real total return (net of investment management fees) of at least 5 per cent over the long term running five year periods) (3) together with other sources of funding, to support the grants program and to comply with the required disbursement quota as determined by Revenue Canada (4) to allow for the distribution of endowment funds at the decided upon rate.
The investment philosophy currently selected by the Investment Committee and approved by the Board is the long-term, value-oriented approach as described below. The long-term value oriented investment philosophy was selected because the Investment Committee believes this approach will lead to good long term results and is the most appropriate measure of fund manager performance.
A full copy of the Statement of Investment Policies and Objectives for SickKids Foundation is available by completing the Foundation’s Imagine Canada Ethical Code Request Form.
9. If the charity receives, or anticipates receiving, gifts-in-kind of $100,000 or more in a year and has annual revenue in excess of $500,000, it will establish a Gift Acceptance Policy (including valuation issues) for the receipt of gifts-in-kind.
SickKids Foundation: All donations to The Hospital for Sick Children, The Hospital for Sick Children Foundation and The Hospital for Sick Children Research Institute are forwarded to SickKids Foundation for receipt, acknowledgement and disbursement.
Gifts include cash, securities, gifts-in-kind, and planned gifts such as bequests, life insurance and annuities, etc.
Gift acceptance policies have been prepared by the Foundation that are in keeping with accepted accounting principles and Revenue Canada guidelines.
In order to be receipted, all arrangements for acceptance of gifts-in-kind must be made through the Foundation in accordance with Canada Revenue Agency guidelines.