The arts organization and foundation must agree to specific conditions in accepting matching funds:(29)
- The funds from the Endowment Incentive component along with the private donor match are capitalized in perpetuity and held as restricted assets by the foundation, as outlined in the funding agreement.
- Arts organizations have access to the investment income only that is generated by the fund, which can be used for operations or special projects.
- If the Endowment Incentive component funding does not fully match the donations from private donors, the funding agreement does not apply to the extra amount raised from them.
- Only standard administrative and investment charges can be applied to the matching grant at no greater than 2% of the total grant amount received from the Endowment Incentives component.
- The arts organization bears the cost of the fundraising activities out of its operations budget.
The funding agreement can also include additional conditions.
29. Canadian Heritage, Government of Canada, Application Guidelines – Endowment Incentives Component