By Jacqueline M. Demczur and Jefe Olagunju

In a November 12, 2025 decision, the Ontario Securities Commission (“OSC”) has granted the Application for relief from registration and prospectus requirements under the Securities Act (Ontario)  to Toronto Foundation, allowing the Toronto Foundation to pool and invest funds from certain eligible charities and not-for-profit organizations referred to as “qualified charities” in the OSC exemption without registration. More specifically, these qualified charities are limited to organizations that satisfy the eligibility requirements imposed by the OSC, including that they be registered charities or certain qualifying not-for-profit organizations which are primarily located and operating in Ontario (“Qualified Charities”).

Toronto Foundation is a community foundation and registered charity that pools donations of donors to create multiple fund structures, including both endowed and non-endowed funds, from which they make grants to charities and not-for-profit organizations. Along with donor-advised funds and discretionary granting programs, Toronto Foundation wanted to offer administrative and pooling services to Qualified Charities to allow participating charities to invest their funds alongside its own funds. This would allow such Qualified Charities to benefit from professional investment management and enhanced governance at a lower cost, which smaller organizations typically would be unable to access on their own.

Given this service involves the collective investment of funds and the allocation of investment returns and related rights that could be characterized as “securities” for regulatory purposes, Toronto Foundation applied for an exemption order under Section 74(1) of the Securities Act, seeking relief from the registration or prospectus requirements under the Act. For clarity, this characterization relates to securities law analysis and does not involve the issuance of securities to participating charities. In support of its request for this exemption order, Toronto Foundation argued that: (1) it is benefitting the charitable sector by providing such services; (2) its  services would reduce risks by allowing Qualified Charities to access professional advisory services and knowledge at a lower cost; (3) as a registered charity, it has adopted and adhere to policies, procedures and practices governing its business and operations; and (4) its  outsourced Chief Investment Officer (“OCIO”), who makes decisions about the funds held and invested, has considerable internal investment infrastructure and expertise.

The OSC granted the relief and accepted that Toronto Foundation’s activities were not commercial capital-raising or discretionary portfolio management in the traditional sense, but rather a registered charity providing a cost-saving service to increase accessibility as well as strengthen the charitable sector as a whole. In granting the relief, the OSC imposed a number of conditions, including, among others, that Toronto Foundation: (1) not require, recommend or advice any Qualified Charity to enter into a pooling agreement; (2) not engage in providing discretionary portfolio management services outside the approved pooling and administrative framework to any Qualified Charity; (3) provide its Qualified Charity clientele with written statements disclosing the nature of the service that it is providing; and (4) maintain detailed books and records showing that the Qualified Charity is the beneficial owner of the funds in question at all times

For Qualified Charities, this decision represents a meaningful step forward. It provides regulatory clarity and increased access for those Qualified Charities who wish to pool funds and access professional investment management with a well-established community foundation without having to give up ownership of their property. 

This option may also be one that other community foundations might wish to consider seeking in order to expand the type of services that they can offer to registered charities in their particular geographic area. However, it is important to be aware that this decision is very fact-specific and is grounded in Toronto Foundation’s robust governance and use of professional advisory services. The OSC’s decision to grant Toronto Foundation relief from OSC registration and prospectus requirements expires 5 years after the date of the decision and may be renewed, subject to OSC approval.

​Read the January 2026 Charity & NFP Law Update