The family of a terminally ill seven-year-old boy whose small Ontario town threw him an early Christmas parade has launched a foundation to support brain cancer research.

The Brain Tumour Foundation of Canada has partnered with Evan Leversage's family to receive donations, under the name Evan's Legacy, that will go toward research for childhood brain tumours.

It's a bittersweet moment for Evan's mother, Nicole Wellwood.

"Evan's Legacy is our gift back to the world," Wellwood said. "I told Evan about the foundation because I made a promise to him that I would always be his voice and do whatever I can to raise awareness."

Evan flashed his mother a smile at the news, she said.

The boy is in palliative care now after his condition began deteriorating considerably about a week ago. He has what's called a glioma brain stem tumour -- a tumour that is inoperable and fatal.

Last January, doctors told the family the tumour, which he's known about for five years, had become aggressive. Radiation and chemotherapy worked for a time. Then in mid-September, a tell-tale sign returned -- losing movement in his right arm and right leg.

The tumour had become aggressive once again. Doctors told Wellwood her son might not live for six months and maybe not until Christmas.

So the family and his town, St. George, rallied.

More than 7,000 spectators -- the town only has 3,124 residents -- flooded the area to take in the dozens of floats and to cheer Evan, who watched it all from the front of his house before hopping into Santa's sleigh to finish the parade. The town was aglow in lights and blanketed in artificial snow.

His story spread around the world. Wellwood said people from the United States, Europe and Australia wrote to them saying they had put up Christmas lights to salute her son. She said she gets dozens of cards of hope and prayers each day.

During that time, Evan created something unimaginable to most his age: a bucket list of items to cross off before he dies. He's done them all, from eating at Wacky Wings in nearby Brantford, Ont., to going to theatre to watch Goosebumps with his older brother, Logan. He even met Toronto Maple Leafs captain Dion Phaneuf at a game and hung out with Wayne Gretzky's father, Walter, Wellwood said.

But a week ago Evan entered a palliative care centre. On Sunday, after a rough morning, he fell into a deep sleep.

After 24 hours of sleep, Wellwood thought this could be the end for her little man. But there was enough hope -- he squeezed her hand at random moments -- that he'd snap out of it.

On Tuesday he awoke. He was thirsty. So Wellwood swabbed his mouth with water.

Then the boy rallied again, and by Thursday, he was wheeled out of his room on his bed to watch firefighters who were putting up Christmas trees around the place. With the holiday so close, his mother began to think he might be able to make it to Christmas.

But Wellwood is also thinking about the future -- one future without her son, but with other children in the same condition with the same disease.

"We're hopeful that doctors can come up with a cure for these rare tumours that he has," Wellwood said. "It's going to be very tough, but I continue to smile because he smiles every day and that's my inspiration."