To guarantee the financial sustainability of civil society organizations This remains one of the biggest challenges facing the third sector in Brazil. Many initiatives depend on one-off donations or grants to secure funding. This dynamic often undermines the continuity of projects with a positive long-term impact.
It is in this scenario that the Endowments, also known as endowments, become a strategic alternative for To provide financial sustainability to causes of public interest.. But for one endowment fund It needs to operate within the law and with the governance that donors expect. to be managed by its own structure: the Endowment Fund Management Organization, or OGFP.. This article will discuss this legal entity, what it does, why it exists, and how it relates to the institutions it supports.
What are Equity Funds?
One Equity Fund It is a financial structure designed for the long term.. An organization receives a donation and contributes it to the fund; this asset is then... invested in the financial market, and Only the income generated by these investments is used to finance projects and initiatives.The principal value remains preserved, which guarantees recurring generation of resources year after year. In practice, a one-off contribution of resources is transformed into a... continuous source of funding.
The model is already widely used by universities, hospitals, museums, and social organizations around the world. In Brazil, it gained legal backing with the... Law No. 13.800/2019, which created the regulatory framework for endowment funds in the country and, with it, the figure of the organization responsible for managing them.
Endowment Fund Management Organization: the role of the EFO
Law 13.800/19 establishes that Endowment funds must be managed by an Endowment Fund Management Organization. — endowed with its own legal personality and dedicated exclusively to the management and administration of the fund.. This organization is completely segregated from the supported institutions, who remain responsible for the execution of programs, projects, and other purposes of public interest.
In practice, this means that OGFP manages the assets, defines investment policies, ensures transparency and compliance, and conducts the fund's governance., ...while the supported institution continues to carry out its social mission.
The legislation also requires accounting, administrative and financial segregation between the endowment fund and the supported organization. Since the assets that make up the fund are not interconnected with those of the beneficiary institution, any tax, labor, or other contingencies faced by it do not affect the donated resources, a protection mechanism that increases the confidence of the donor and the security of the recipient.
Secure Management of Endowment Funds
For one Equity Fund For it to function efficiently, it is essential to have a specialized structure in governance, compliance and financial management.. It is for this purpose that the Sitawi Finanças do Bem, in partnership with the Endowments of Brazil, offers a solution for to democratize access to Endowment Funds in the country.
Endowments do Brasil is the first Multi-cause and multi-beneficiary endowment fund management organization adhering to Law 13.800/19. Its structure allows for the creation of funds focused on multiple causes as well as funds dedicated to a single organization, with rReduction of operational and legal costs, independent governance, transparency, compliance, and specialized professional management.. This model makes creating a Equity Fund More accessible and less bureaucratic, without compromising the security required by law.
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