Putting your money where your mouth is

In his work as a professional fundraiser in the early 1960s, Jim Mutch frequently encountered large and generous donors who declared that they would gladly give twice as much to the cause - if the donations were deductible for income tax purposes.

In those days, income tax was 50% (rising to 66% in the 1970s) on incomes above a modest threshold and there were no tax deductions whatsoever for charitable giving.

Jim recommended to donors that they form a charitable trust to become the instrument of their charitable giving, and thus be exempt from income tax.

This rarely resulted in fruitful action. Mostly it seemed to get put into the 'too hard' basket. Yet Jim knew that it wasn't really that hard.

So despite his young and impecunious state at that time, he set up the James Mutch Foundation with a token endowment of one hundred dollars.

Thereafter, he occasionally lent sums of money, for which he personally had no immediate use, to the foundation. The foundation derived its income from investing this money as a passive investor.

However the sums were not large and the foundation's main function was considered to be that of a model for donors of financial substance.

That perception began to change during the 1980s when the foundation's modest capital base grew significantly. What had been regarded primarily as a 'model' began to take on the appearance, albeit embryonic, of a 'fund'.

From that time the foundation's investment range was extended from interest only to include a broad range of investments. While some of them were high risk most of them prospered.

Trustees set an ambitious capital base target, and until this was secured, a policy of modest disbursements was adopted.

Disbursement policy covers the broad range of charitable objectives with emphasis on capital projects.