I will prefix my remarks by noting that laws governing trusts vary in detail
from jurisdiction to jurisdiction, but are all based on similar principles.
You will need a legal opinion before going much further.

That being said, I can relate the experiences of two heritage institutions.

The first is "The Friends of the Canadian War Museum", whose primary prpose
has been to raise funds to assist in the construction of a new building
complex for CWM. Under the federal Income Tax Act, the Friends are a
charitable foundation which operates under fairly strict annual reporting
requirements (to the Government of Canada).Though a very small organization,
chiefly of veterans who have very limited political or economic clout, they
have raised several million ($CA) over the past several years. They have
kept the money within their own foundation and have NOT set up a separate
organization to manage the investment and safekeeping of the funds raised in
trust.

I am the treasurer of the Canadian Battle of Normandy Foundation, which
established a scholarship trust fund in 1995. The objective to to accumulate
at least one million dollars to secure the coverage, in perpetuity, of
twelve annual bursaries used to fund histoiry students (graduate or
undergraduate) on study tours in Europe, led by nationally known military
historians. It is a MUCH smaller entity than the FCWM but has already raised
almost $700,000. The scholarship trust fund is kept within the foundation,
but in a separate bank account, for visibility and accountability.
Investments are made on the recommendations of myself and the Ottawa manager
of one of North America's largest invetment firms and decisions are made by
a committee of our board of directors, chaired by the president. It reports
to quarterly board meetings with a complete statement of investments and
trends, income realized, etc., etc. 65% of the investments must be "fixed
income" and the remainder are in blue chip stocks (mainly financials) and in
mutual funds of the "balanced equity" variety. Our very conservative
investment policy, which we feel is morally an absolute requirement for
managers of a trust, has helped us weather the economic downturn of the past
few years very well. I should mention that the foundation has built, at a
cost of about $CA2 million in today's dollars, a memorial garden in Normandy
and has established several other memorials in the same area. These are
funded OUTSIDE the scholarship trust fund, chiefly through corporate
donations.

While neither of these foundations are museums, per se, they are heritage
foundations and their experience may be of use to you.
--
Harry Needham, Principal ([log in to unmask])
Harry Needham Consulting Services Inc.
Solutions for Heritage Institutions - and Others!
74 Abbeyhill Drive
Kanata ON K2L 1H1 Canada
(Voice) +1.613.831-1068
(Fax) +1.613.831-9412

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