Donations & Loans Policy

Policies

1.0   Purpose

This policy outlines how Council will manage applications from the community for Council funding.

2.0  Background

Council has had a Grants and Loans Policy since 1996. That policy contained the guidelines for allocating Council funding in response to applications from the community.

Council explored the development of an events strategy and associated community funding when the 2015 Long Term Plan was developed.  As part of the Pre-Consultation Survey in August / September 2014, two questions relating to grants and events were surveyed.  The Timaru District community supported expenditure on donations /events remaining within current budgeted levels. Those levels are unable to meet all the needs of all the voluntary clubs and organisations in the district.

As a consequence it was prudent to review Council’s Grants and Loans Policies which contained the guidelines for events support.

A new policy called The Donations and Loans Policy (this policy) was subsequently developed and approved, by the Community Development Committee on 25 November 2014.

With the adoption of this new policy a separate events strategy became unnecessary.

Review of the Donations and Loans Policy can be undertaken at any Community Development Committee meeting.  The flexibility this provides allows the policy to react to changing circumstances and remain current.

This policy is aligned to community outcomes in the Long Term Plan.

3.0  Key Definitions

  • Donation – An unconditional gift made voluntarily to a person or organisation to use as they see fit, where there is no benefit to the donor, or to anyone associated with the donor.  There is no GST associated with a donation.
  • Delegated authority – as outlined in Council’s Delegation Register

4.0  Policy

4.1 Introduction

  1. The Council will focus available funding on projects that contribute to the following community outcomes in the Long Term Plan:
    • Smart diversified economic success supported and enabled
    • Communities that are safe, vibrant and growing
    • People enjoying a high quality of life
    • A strong identity forged and promoted
    • A valued, healthy and accessible environment
  2. With that in mind the Council will concentrate its general donations funding on local events, rural community halls, museums and community services and on substantial donations or loans for improved or new facilities.

4.2 Application Categories

Applications in the following categories are eligible for consideration:

a. New Zealand Representative.

b. Minimal Donations.

c. General Donations.

d. Substantial Donations.

e. Community Development Loans.

f. Sport and Recreation Loans.

g. Youth Entertainment Funding.

a. New Zealand Representative (“one off” donations of $250)

  1. Residents from the Timaru District.
  2. Nationally selected to represent New Zealand at international level.
  3. Approved jointly by the Chairperson of the Community Development Committee and the appropriate officer under delegated authority.
  4. All decisions to be reported to the Community Development Committee.

b. Minimal Donations (donations of up to $500)

  1. Projects must have a benefit to the general community.
  2. Considered and decided jointly by the Chairperson of the Community Development Committee and the appropriate officer under delegated authority.
  3. All decisions to be reported to the Community Development Committee.

c. General Donations

  1. Events - This funding is to support events which the public at large can attend, and are listed on the community calendar. Applicants are to be community based organisations or individuals and the events can be “one off”, new or ongoing. All Council run, funded or supported events are required to be “Smokefree”.
  2. Donations for events may be approved for a maximum of 3 times in succession, after which a 1 year stand down will apply before the applicant may apply again.  Any subsequent application must include details of improvements to the event which may require short term funding before becoming self sustaining. (This paragraph does not apply to Christmas Parades and ANZAC Day Services.)
  3. Rural Community Halls - This funding is for maintenance / improvements to the District’s rural community halls which are available for public use. Applications are restricted to hall committees / societies and they need to demonstrate that the level of hall and community use warrants the expenditure.
  4. Community Services - This funding is for not-for-profit community-based organisations which provide an ongoing, free community service.  The latest Annual Report must accompany an application to show the level of activity of the organisation and the number of people to benefit.
  5. Heritage/Historic -Administration costs for not-for-profit community-based organisations which have a focus on preserving the history of South Canterbury and making it available to the public at little or no charge.
  6. Salaries and Wages -  will not be funded unless there are exceptional circumstances.

d. Substantial Donations (donations of $10,000 or more from the Community Development Interest Fund)

  1. Applicants must be not-for-profit community-based organisations.
  2. Eligible projects must develop new or improve existing facilities.
  3. Eligible projects must significantly benefit Timaru District residents.
  4. There must be strong financial support from the community.

e. Community Development Loans

The purpose of the Community Development Loans Fund is to make major loans to not-for-profit community-based organisations to develop new or improve existing facilities, which reflect credit or provide benefit to Timaru District residents. The Annual Interest Rate is to be set at half of the 90 day bank bill rate, at the time of offering the loan.

Note: For Loan Conditions see Clause 4.4

f. Sport and Recreation Loans

The Sport and Recreation Loan Scheme funds facilities and/or major plant items.  The Annual Interest Rate for five year loans is 3.54% and for ten year loans is 3.61%.

Note: For Loan Conditions see Clause 4.4

g. Youth Entertainment Funding

Projects should be activity based, public and benefit a group of youth aged 12 to 25 years rather than an individual and have an emphasis on entertainment.  Applications are considered by a subcommittee of the Community Development Committee two or three times a year.  Unspent funds are not carried forward at the end of the year.

4.3 Application Requirements

  1. All Donation and Loan applications (except Youth Entertainment Funding and Creative New Zealand applications) are to be considered by the Donations and Loans Subcommittee with recommendations being made to the Community Development Committee.  Applications which exceed the Committee’s funding, will be forwarded with recommendations, to the Policy and Development Committee which will then coordinate a recommendation to Council.
  2. Application Forms:  All applications must be made using the appropriate application form.
  3. Retrospective Applications:  Applications will not be considered for expenditure incurred prior to the decision date.
  4. Publicity:  Public acknowledgement is required for all Council Donations and Loans.
  5. Annual accounts / bank statement and/or budget for the most recent financial year are to be supplied with applications.
  6. Dates:  There will be two funding rounds per annum with applications closing each year in September and March.  The closing dates and meeting dates will be advertised.
  7. Interviews:  Applicants for a donation of $8,000 or more are strongly advised to attend an interview.
  8. Resource and Building Consents:  Approval of funding does not constitute approval for building work and is conditional on the applicant obtaining all necessary Resource and Building Consents.
  9. Accountability:  Accountability reports are required within two months of the completion of the funded project, and a further application will not be considered if there are outstanding issues.  Accountability forms are not required for Minimal or New Zealand Representative donations.
  10. When applying for $2,000 or more, a copy of the resolution to apply to the Timaru District Council for funding is required.
  11. Donations are rarely made to organisations with large amounts of available funds.  Applicants are expected to put their own uncommitted funds towards a project and applications need to include details if funds are committed towards another purpose.
  12. All Donations and Loans are exclusive of GST.
  13. Late applications will not be accepted.
  14. A client agreement of donation terms and conditions must be completed by successful applicants prior to funds being advanced for a donation of $10,000 or more.

4.4 Loan Conditions

  1. Repayments are to be calculated on a table mortgage basis, with six monthly fixed payments and the interest calculated on the reducing balance.
  2. All loans require security in the form of a mortgage on the property, a security interest, registered with the Personal Properties Security Register or several personal guarantees where appropriate.
  3. Loans must be repaid within 5 years unless the Committee resolves to make a specific exception.
  4. A term loan agreement is required for all loans.
  5. Organisations with a current loan from the Timaru District Council, shall not be eligible for any further loans or guarantees whilst the existing loan or guarantee is in existence.
  6. All applications for loan funds will be considered on the ability of the organisation to complete the project, and repay the loan.
  7. Loans must be uplifted within twelve months of the date of the decision to offer the loan.

4.5 Underwriting Activities (Guarantee against loss)

The Donations and Loans Subcommittee may recommend that an event be underwritten, i.e. a Guarantee Against Loss which must be uplifted within two months of the conclusion of the event.

4.6 Carried Forward Balances

Credit balances in the Grants Fund at the end of the financial year are carried forward and added to the following year’s allocation.

4.7 Review Of Policy

The Donations and Loans Policy may be reviewed at any Community Development Committee meeting.

Adopted Community Development Committee 2 May 2017

Last updated: 24 Feb 2021