A pioneer in the development of innovative financial solutions for positive impact, Sitawi, in partnership with Endowments do Brasil – Organization Managing Heritage Funds (OGFP) – launches a structure that allows the creation of Heritage Funds in accordance with the rules of law 13.800/2019.
Endowments, or Endowments, are financial instruments that aim to ensure the financial sustainability of non-profit organizations – through the income from invested resources, from donations, – promoting long-term impact. In Brazil, Endowment Funds have been in existence since the mid-1950s, but the regulation came only in 2019, through Law 13,800, which creates a legal framework and recognizes the relevance of funds as instruments for capturing donations by entities, in addition to creating governance parameters for fund managers.
In an innovative approach in the country, the OGFP structure will house funds from multiple causes, with a considerably lower cost than each cause/institution would have when creating its own OGFP, in a logic of 'common infrastructure'. The partnership between the organizations – with CNPJs and independent governances – will be represented by the brand 'SITAWI Fundos Patrimoniais'.Sitawi Equity Funds'.
For those interested in creating Endowments, this means the possibility of bearing considerably lower costs than they would have to in creating their own management organization. In addition, the proposed structure solves the complexity involved in creating and maintaining a new CNPJ dedicated to this activity, as determined by law. Endowments managed by Endowments do Brasil (OGFP), in partnership with Sitawi, may start at R$1.4T 2 million.
“This innovation is transformative and relevant to boost the Equity Funds market in the country. The model proposed by Sitawi offers an independent governance solution and brings flexibility. With it, the resources from the fund can be directed to more than one organization, facilitating the allocation of donations to other causes of interest to donors. One result of Law 13.800 was the establishment of a solid base, from which different actors can bring innovations for positive socio-environmental impact, with a high level of compliance”, says Leonardo Letelier, founder and CEO of SITAWI and who will also be the Executive Director of Endowments do Brasil.
Unlike Endowment Funds, Philanthropic Funds – of which the Sitawi – of which SITAWI has managed more than 60, with volumes ranging from R$100 thousand to R$100 million – admit the use of all the principal and often aim to bring the balance to zero, according to the established purposes. In many cases, donations are usually directed to one-off causes, as recently experienced in the Covid-19 pandemic.
Counting on the credibility and recognized transparency of the company's performance, Sitawi, OGFP will manage the principal and capital flow (financial income). In this way, the organization will manage the contribution of resources in search of solid long-term financial income and the disbursements of this income to the institutions and projects supported.
For more information, contact with the Sitawi.
Equity Funds Market in Brazil
In the context of the launch of the new partnership for Equity Funds, last Wednesday (23), Leonardo Letelier, founder and CEO of Sitawi, participated in the launch of the publication “Overview of Endowment Funds in Brazil", in Sao Paulo. The event was held by the Institute for the Development of Social Investment (IDIS) and the Coalition for Philanthropic Funds.
The publication, which is supported by Sitawi, brings an unprecedented survey of existing equity funds in the country, addressing perspectives for the future and helping people who work with private social investment. The next launch event will take place on April 8th, at 9 am (BRT), at the Museum of Tomorrow, located in Rio de Janeiro. Letelier will be present to talk about this market in Brazil and the new front of action of the Sitawi with the Heritage Fund Management Organization (OGFP). Sign up here.
