FUNDING OF PROJECTS AND ACTIVITIES

DESIGNATED fund

Roles, rules and best practices
for GOVERNING boards

Fundraising is an important tool for enriching school life and supporting projects at school. It allows for the financing of activities, improvements, or experiments that would not be possible otherwise.

However, these fundraising activities must be rigorously organized. They fall within a specific legal framework and must respect fundamental principles, including free education, equity among students, and transparency towards parents. They must also be consistent with the educational mission of the institution, while avoiding any form of commercial exploitation of students.

The governing board is responsible for authorizing fundraising campaigns carried out for the benefit of the school. It acts on behalf of the school board and must adopt a resolution to authorize any activity that aims to solicit and receive financial contributions, in the form of donations, bequests, grants or other voluntary contributions from individuals or public or private organizations wishing to support the school’s activities (section 94, Education Act ).

The school board must ensure that fundraising activities are compatible with the school’s educational mission and comply with applicable laws, particularly regarding advertising and consumer protection.

The funds raised must be deposited into a designated fund, created specifically for the school by the SB. These funds belong to the school and must be used only for their intended purpose, as approved by the Governing Board.

Designated fund

The designated fund is a mechanism enabling governing boards to solicit and receive financial contributions in the form of gifts, legacies, grants or other contributions in order to financially support various educational and extracurricular activities.

This fund is separate from the school’s operating budget and must be used in accordance with the school’s educational mission. Its administration is subject to the governing board’s oversight, and the school board must maintain separate books and accounts for this fund and related transactions. Furthermore, at the governing board’s request, the school board must allow it to examine the fund’s records and provide it with any necessary accounting.

The fund is used to finance projects that are not covered by government funding, such as:

  • Beautifying schoolyards.
  • Organizing school events (parties, shows, trips).
  • The purchase of sports equipment or additional educational materials.
  • Funding for school clubs (chess, arts, etc.).
  • The implementation of ecological projects such as vegetable gardens.

The governing board is the only entity authorized to manage this fund and any decision regarding its use must be adopted by resolution.

Role of the Governing Board

  • It is the only one authorized to solicit and receive financial contributions.
  • It must ensure that these contributions respect the educational mission of the school.
  • It ensures the transparent and rigorous management of the special purpose fund.

MEQ training for members of the governing boardsl:
See Fact Sheet #22: Designated Funds (in French only).

All contributions or donations made by third parties to the institution, regardless of the purpose, must be received by the governing board and paid into the designated fund.

    General principles

    Fundraising must be governed by guiding principles that ensure sound and fair practices:

    • Voluntary participation
    • Equity among students
    • Transparency regarding objectives and the use of funds
    • Educational relevance of the projects
    • Proportionality of requests
    • Supervision by the governing board

    Free education

    Free education is a fundamental principle of the Quebec education system. Educational services and required materials must be provided without mandatory fees.

    • A fundraising campaign can never be required.
    • It cannot replace public funding
    • It cannot make a student’s participation conditional

    Fundraising efforts should therefore finance complementary projects and not basic services.

    Definitions

    Fundraising campaign
    A fundraising campaign encompasses all the activities organized over a specific period to raise funds for a particular project within the institution. This concept implies a clear objective, known in advance, and communicated to those being asked to contribute.

    Fundraising campaign for a collective purpose
    A fundraising campaign is considered collective when it aims to support a project or activities that benefit all students or a group of students. The funds raised are then used to finance a common project, without any direct link to the individual contributions of the students.

    Fundraising campaign for an individual purpose
    A fundraising campaign is considered individual when it allows a student to raise funds to finance, in whole or in part, the cost of their participation in a particular activity. These campaigns are generally linked to optional activities.

    Sponsorship
    A sponsorship consists of financial, material, or service support provided by a company or organization in exchange for something in return. It therefore implies an exchange between the parties and does not entitle the sponsor to a tax receipt.

    Donation
    A donation is a voluntary contribution, in money, goods, or services, given without direct compensation to the donor. It is a gratuitous act, which may entitle the donor to a tax receipt when the applicable conditions are met.

      Fundraising is a valuable tool for supporting educational success when properly managed. The governing board plays a central role in ensuring rigorous, fair, and transparent management, always in the best interests of the students.

      Template of resolutions for the designated funds

      These resolutions clarify the objectives pursued, the modalities of the campaign and the intended use of the funds raised.

      Download template

      Advertising and sponsorships at the School

      Sponsorship is permitted if it respects the school’s educational integrity, does not create undue pressure or influence, and complies with applicable advertising regulations. Certain forms of recognition are acceptable, such as a discreet mention or an official thank you.

      On the other hand, forms of active advertising in the school, the distribution of promotional material or any situation where students become vectors of promotion must be refused.

      These contributions are subject to strict regulations, including:

      • The Education Act, which prohibits any commercial solicitation of students.
      • The Consumer Protection Act, which prohibits advertising aimed at children under 13 years of age.

      Governing boards must therefore carefully evaluate offers of financial partnership and ensure that they respect educational values ​​and legal obligations. Donations must under no circumstances be conditional on access to products or services, nor promote brands within the school. In case of doubt, it is recommended to refuse any contribution that could compromise the school’s independence and values.

      Furthermore, a school cannot allow sponsorship that involves visibility directly aimed at students under 13 years of age.

        Can a school require parents to participate?

        No. All participation must be voluntary.

        Can a student be refused participation if they haven't contributed?

        No. Fundraising can never be a condition of participation.

        Can the Parent Participation Organization (PPO) organize a fundraiser?

        The PPO can contribute to organizing a fundraiser, but it must be authorized by the school council. The funds raised must be managed according to applicable rules and deposited into the designated fund.

        Can parents organize a fundraiser without the school council?

        No. Any solicitation of parents at the school must be authorized by the school council.

        Can individual fundraising campaigns be conducted?

        Yes, with guidance, transparency, and caution.

        What happens in case of a surplus?

        The school council decides on the reallocation of funds by resolution.

        Types of financing activities

        ACTIVITY DESCRIPTION

        SPECIFICS

        POINTS OF VIGILANCE

        Product Sales

        Food Products or Goods

        Profitable

        Pressure on Families

        Fundraising Activity

        Event (evening, show)

        Mobilization

        Logistics, Communications

        Donations

        Voluntary Contributions

        Simple and Direct

        Must Remain Without Reciprocation

        Sponsorships

        Partner Companies

        Financial, Material, or Support Contribution

        Counterparty Framework

        Participatory Activities

        Challenges, Races

        Student and Parent Engagement

        Fairness

        Individual Funding

        Specific Activity

        Targeted

        Potential Inequalities

        Foundation

        A school foundation is an autonomous legal entity, separate from the school itself. It must have a defined mission, be managed by a board of directors, and comply with certain legal and tax obligations.

        Main characteristics of a school foundation

        • Independent entity: It operates separately from the school and the school board.
        • Board of Directors: It is elected by the general assembly of the foundation’s members.
        • Legal and tax obligations: It must produce annual declarations and comply with tax regulations.
        • Financial autonomy: The funds collected belong to it and it decides how they are used, without obligation to follow the priorities of the governing board.
        • Relations with the school:
          • It must obtain permission from the school board to organize activities involving students or to use school facilities.
          • If it wants to bear the name of the school, authorization from the school board is required.

        Risks and challenges related to school foundations

        • There may be a lack of continuity when founding members leave the school; it can be difficult to ensure a smooth transition.
        • Conflicts of interest may arise if staff members or members of the school board sit on the foundation’s board of directors.
        • Funds not used by a foundation cannot simply be transferred to the school.

        Compared to a designated fund, a foundation offers greater autonomy but involves more complex management and legal and tax responsibilities.

        Comparative table: Foundation / Designated fund

        The following table presents the main differences between these two forms of financing in order to better understand how they work and how they complement each other.

        FOUNDATION

        SPECIAL PURPOSE FUND

        Legal framework

        Companies Act, Part III

        Education Act, section 94

        Purpose (Mission)

        One cause: for example, academic perseverance

        There may be multiple projects within a special purpose fund.

        Legal recognition

        Charter and registration application. (Fees required.)

        Legal entity separate from the school and the school body

        Must obtain authorization from the school body to use the school's name for solicitation purposes. Even then, the foundation remains a separate entity.

        The Education Act (LIP) stipulates that as soon as there is a school or a request from a school, the school body must create a SPF.

        The SPF is part of the school body.

        May use the school's name without further authorization.

        Administration costs

        Equipment, stamps, travel expenses, stationery, legal fees, financial statements, bookkeeping, etc.

        None. The Governing Board (GB) has the right to meet on school premises and to use the school's administrative support services and equipment free of charge under the conditions set by the school administration.

        Administration

        Board of directors elected by a general assembly of members.

        The Governing Board alone decides how the funds are allocated. A resolution is essential to authorize expenditures.

        Registration as an NPO

        Annual obligation to file information returns with the enterprise register.

        Registration fees to be paid.

        No obligation

        Registration as a charity

        After submitting a registration application, it may issue charitable donation receipts.

        If the school body is registered, it may issue receipts.

        Bookkeeping

        The foundation must maintain books and detailed records allowing tax authorities to verify the amounts reported in annual returns. 

        The foundation must collect its revenues itself and issue charitable donation receipts. These tasks cannot be performed by the school body.

        The school body keeps separate books and accounts for each SPF.

        Financial statements

        Must be prepared annually and, where appropriate, submitted to the tax authorities.

        If applicable, GST and QST registration must be completed.

        Frameworks

        The foundation is not required to comply with the administrative and pedagogical frameworks of the school body and the school.

        However, when authorizing the foundation to use a school's name, the school body may require compliance with its frameworks.

        The school is required to comply with the administrative and pedagogical frameworks of the school body.

        Directors' responsibilities

        To obtain protection, the directors must provide the Foundation with liability insurance. (Cost)

        Members of the GB are covered by the school body's insurance.

        Operations

        Opening a bank account, issuing cheques or bank transfers, deposits, etc.

        All these aspects are handled by the school, the school body.

        Interest income

        After opening the bank account, the Foundation must determine under what conditions and how to invest the funds.

        The school body pays interest into the SPF at least once a year.

        Fund ownership

        All funds collected are the property of the Foundation, which decides how to use them.

        Furthermore, a donation may be subject to a commercial condition or be designated.

        All funds collected must be allocated to the school, and the SPF is overseen by the GB. The GB decides how the funds are allocated.

        No commercial condition may be attached to a donation.

        Archiving and document retention

        All bookkeeping documents must be kept for 7 years.

        The school body must keep, for 7 years, all documents related to the financial operations of each SPF.

        Potential issues for each tool

        Succession is difficult to ensure, because when the founders' children leave the school, foundations often collapse. 

        The activities of the foundation must be clearly separated from those of the school. 

        There may be confusion between the school and the foundation, particularly when the foundation deviates from its initial mission. 

        School staff and GB members who are also members of the foundation's board of directors can easily be in a conflict of interest. 

        The foundation is not required to comply with the school body's administrative and pedagogical frameworks. However, when the school body authorizes the foundation to use a school's name, it may require compliance with those frameworks.

        Succession is ensured by the GB composition mechanism provided for in the Education Act.

        It may seem difficult to obtain donations without being able to use the term “Foundation.”

        Therefore, it may be useful to use the expression: Fundraising Campaign – School XXXX

        We would like to thank the Table des secrétaires généraux de l’Estrie-Montérégie for authorizing the use of Info-Flash: Designated Fund and Foundations, Year 4, No. 1, which was revised in January 2018.

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