EFTA01301134.pdf

DRAFT 9/11/2019 Version 18 Wednesday. August 3 I.201I PROJECT MOLECULE — CLIENT DRAFT knesanent produce.: Not MK insured . No bank guarantee • May lose value S Nentieelayonant lomviunat se entl ult. is pMUYin T. J. P. Morgan SDNY_GM_00078555 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001682 EFTA_00189022 EFTA01301134  Conine Cellragswortlt General Cosner and Seartary. Fosiodatioa Operations owol counwlaewl 'tierces teals die annotwocin's INA wan Row .o twn% die totowatnits. .he Waf drill'''. ea die Haitian Preston (JIM & It, LIP aid wa to-than or Said Wane Parham. aSralteawad.rnHata organaia, dui to -won on V•11.11.IIIdelIVIMIIIIKIFItil ma% rallinietworth was coaander and loos orewit "rerwiltre and hard awnibet Hi Ow hawk Aswan Mooed al Hari !wid MIC t untidy an +Newry lwaid intwilvt ol Anew,. Correa° and the National Casten° lialanthropy awl dot Law. 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Global Health Para Gnaw* wry rald die awn. (Herein lor tatotul Health Pale y& Mveawy thin BA& Lielinda Gain ratiwrinton She °wean,remononicrinions. Fakir reeky. and inownation.4 iiIMIKt let din Global Ifrahli Prows In din aivitity.Fteptrald mann • paltry and seaway gemination torrid.. and owetnr.FAmans with geV/ PM I IN oweigawrniarroalotervainoin the twinge wait inuallnetal regantranons. and other taunts.. a in, W.10.11 thin it l army lot learnmartml Pearlopatie 'VIAL) Pant In pnnnnq dr atimottnan ktrytild you laity Hid MIA a Vane( n Pablo itC1O Hie Waverer Sawed al Syracuse lareartury. and a BA Van Arno. I imam, inWooing/lea tit 0 SDNY_GM_00078556 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001683 EFTA_00189023 EFTA01301135  Agenda • A unique opponunity • A unique approach • How would it work — Donor case studies — Investments — Philanthropy • Next steps • Appendix J.P. Morgan SDNY_GM_00078557 Confidential Treatment Requested by JPMorgan Chase JPNI-SDNY-00001684 EFTAJ00189024 EFTA01301136  Esetudve Summary Opportunity • The Gates Foundation has established a leadership position in global philanthropy with over $258 made in commitments since its inception • There is an opportunity for the Gates Foundation to provide transformational philanthropic leadership for unprecedented dollars committed via the Giving Pledge and by other donors • Donors globally have expressed strong interest in supporting their long-term philanthropic intentions with a sustainable framework for investment and governance, as well as opportunities for collaborative giving to optimize philanthropic strategy and impact • I.P. Morgan can establish an institutional bridge to link donors globally with forums, networks and processes for donor engagement, collaboration, and pooled giving • I.P. Morgan can support the philanthropic missions for individual and collaborating donors with global reach and world class capabilities in investment management, individual wealth planning. and fiduciary governance • I.P. Morgan can establish and perpetuate the institutional framework to sustain these missions in the future J.P.Morgan SDNY_GM_00078558 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001685 EFTA 00189025 EFTA01301137  Esetudve Summary Objectives • Leverage j.P. Morgan's global reach, infrastructure, investment management and individual wealth planning capabilities • Create a structure for governance of individual and pooled philanthropy and investing • Allow for perpetual operation and governance succession • Optimize structure, flexibility and tax benefits for global donors • Accept, manage and liquidate unique and/or illiquid assets • Extend global networks, collaboration and philanthropic impact • There are opportunities for j.P. Morgan and the Gates Foundation to collaborate: — Provide targeted forums, focused engagement, and mutual advisory committee roles for significant donors — Share philanthropic expertise and leverage program strategy and giving J.P.Morgan SDNY_GM_00078559 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001686 EFTA_00189026 EFTA01301138  NtiutEulc Proposed structure The J.P. Morgan Charitable Giving Fund Governing Board of Directors (B- 10 baud molders) The J.P. Morgan Charitable Giving Fund The J.P. Morgan The I.P. Morgan Charitable Giving Fund Charitable Giving Fund lfDunn* ptniatechantabk (Domestic qualifystigrotory Dponsontyptelnorynuamoi foundation, US International 1 2 3 4 1nel USDonor USDore US Donor Intl Donor County COUIllty S 6 Donor A Conduit IICASA C Conduit A Conduit A Conduit 8Conduit BConduk 7 S 9 10 (Donor Advised (Type 1SupponingOrganizations) (Offshoredonors) (Domestic donors) Fund subeccounts) J .P.Morg an • Tax neutralsonsemon SDNY_GM_00078560 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001687 EFTA_00189027 EFTA01301139  • Arum ecanbese usingdumabkentwv opnons m a unique combination to accommodate.. globaldonor basa • VilvsaparateU S. and muinauonal components' US • %leo requnememstomaumuell S tat deductibility for U S swats • Awds tws-border lundingtomplaanons(us..reguLuory) Imeinatronal • Moak US. reporting drulostue and annowegulasoryoven# lot non4J S. donors • Join greater Ae•MMyolligMha new-regulatedloiter chantabkiegmes • Vhtty a public 'umbrella' away' (the sponsonngpubbc agony...Non) Pubbr chanars;wade donors wth • ltglIn ca.deductibility • More Ilt ability al awes coniwbuied • lessor.atmgconstmonts(c g S" annual payout) • %%by 2 'channels under the put& entity' • To achaw and sawnpublic Haw art, need to have tonisnuengbroad bwed public support I Moo, AdvisedFund ( DAF)olklingang ba mmlaud to a large ‘alume of mai downs ▪ SupporortgOrganaaon O -1 a Mope hanged number of *unite 'club' downs b Donors at the GransPledge or WO amount level man haw a Gremeropporrunav for mahatma vu 5O Bawd and OlAdmory Committees b Cachet ol a donor gioopoirsonguesbed front andengard ai a drifwent level than OAF pro/pants To w Neve the benefit of pub& maws for Inge donors (5.O.) we need to obtain the broad based suppan provided by by small donors (DAF) 4 SDNY_GM_00078561 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001688 EFTA_00189028 EFTA01301140  Structure Alternative structure The Gates GI.P. Morgan Charitable Giving Fund Governing Board of Directors (s- 10 baud members) The Gates &).P. Morgan Charitable Giving Fund The Gates &I.P. Morgan The Gates & J.P. Morgan Charitable Giving Fund Charitable Giving Fund CCDunn* pnvate chattrable (Sponsonnspubhcorgannanon) Monteusrquablyingennee foundation) US International 3 4 Inel USDonor USDore US Donor Intl Donor County COUIllty S 6 Donor A Conduit II Dna C Conduit A Conduit A Conduit B Conduit 9Condon 7 S 9 10 (Donor Advised (Type 1 SupponingOaganizarions) (Offshoredonors) (Dornesik donors) Fund subarronnts) J .P.Morg an • Tax neutripmenion SDNY_GM_00078562 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001689 EFTA_00189029 EFTA01301141  • Arum ecanbese usingdumabkentwv opnons m a unique combination to accommodate.. globaldonor basa • VilvsaparateU S. and muinauonal components' US • %leo requnememstomaumuell S tat deductibility for U S swats • Awds tws-border lundingtomplaanons(us..reguLuory) Imeinatronal • Moak US. reporting drulostue and annowegulasoryoven# lot non.0 S. donors • Join greater Ae•MMyolligMha new-regulatedloiter chantabkiegmes • Vhtty a public 'umbrella' away' (the sponsonngpubbc agony...Non) Pubbr chanars;wade donors wth • ltglvt ca.deductibility • More Ilt ability al awes coniwbuled • lessor.atmgconstmonts(c g S" annual payout) • %%by 2 'channels under the put& entity' • To achaw and sawnpublic Haw art, need to have tonisnuengbroad bwed public support I Moo, AdvisedFund ( DAF)olklingang ba mmlaud to a large ‘alume of mai downs ▪ SupporortgOrganaaon O -1 a Mope hanged number of *unite 'club' downs b Donors at the GransPledge or WO amount level man haw a Gremeropporrunav for mahatma vu 5O Bawd and OlAdmory Committees b Cachet ol a donor gioopoirsonguesbed front andengard ai a drifwent level than OAF pro/pants To w Neve the benefit of pub& maws for Inge donors (5.O.) we need to obtain the broad based suppan provided by by small donors (DAF) SDNY_GM_00078563 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001680 EFTA_00189030 EFTA01301142  Samna Benefits and attributes of recommended structure • A groundbreaking structure combines positive attributes of public and pnvate philanthropic vehicles for U.S donors and customized solutions for international donors U.S. public charity benefits International entity benefits' • MasnnacsU S 41‘ &AK Obeid, • SIIUMICM pcovidemammumBembilicvloirJppropeatederwes • NoImitationontypesof ptopetty woo pinned • Courstrt.speuIR emirvopocils lo meet dQuro., 1.1, and resulacoiv tom.dee au moo, • Occommodattmlonanons from pookte loundasuom • Factlicate, eras:border philanthrope guvingancicolLkonint panotnhipt • Ave•ds pow:0 loundaoco conutam • Clumable foundation pens donor ailouvntiry S'T, annual payout ys,<caree la At-Tenafly Telldealingeukt • font AdvisedFund option potion" anonymity suppcmcgotpurzationabowsiercsano. bond postoons ':.ac IP Morgan ClusevNll goo& broad public funtiralung • Foreign private &anti* foundations and counurspecific moon Structural benefits • allows ler pompomby Woad range of domesand pledged vying • Allow for donor influencefor grans • , upports donor collaboration .alarm. to inpertoo • Pioodts rah.suonal instounonaced hallb•WOIT IOC Icapc••tyand board succession Investment benefits • Tutoredorseumentrecommendancos 4km...stead,donor tomovecumuli:a ponfolso ceostrucoenand to make asset allocation recommendattoos • Nommen.performance 010.10 donor's contributionis scripted from other pools. mmanizingdraudowns and preservinggawonatingabbry • More rouble dortulicamon tquecmcnt (miaow co rotate fount:boon.) Should allow Icy concrotrationrot to be tomplcco4 at public chanty cotmohdatcyl Allows for illiquid mugs to be maintained of liquidated owe Moore tonehne Revl.wory framovoxt resaidongicopord.onsonotianwon. e 'Leon busmom holding'. nnsc LIACS. and dotutoutsoo rquircloontmlo not *ply to Type I Tuppotnogotsawatans S.P.Morgan SDNY_G M _00078564 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001691 EFTA 001890;1 EFTA01301143  Gevensam Legal and organizational governance — U.S. ThetPJAorganCharimbkGivingFund (SpornoungPublit Otsunuanoni GoverningBoard of Dime con: MAO L.a.l nru4..1 • Gait. arilLynam. • Comflut *waft • ney ratinneerinie• • weer plariertaiearcim • *tharnmitwear• hens • wows rd wt tiles t lawman, Comeowte Saank Propos /Gem and Discremern Camerae Matarerat and Cernmance Commit Mance /Ads COOMINUM 1B.-•.04 Akin*" ,Aewilv•./ & Mem t lobe a) (Mud az Merry alcinirro) itioallagetil Moothro.) • Origian onw,rment awls • Ream a a malt le•rir ibecluirts rattan inflames so • Assn Brad at MIAs*maven irminaliiimir meal • (*cynic respnitory intuiting iNICIalreportm umnal • fam•olait.owoN lownorwitii•ot. airipirkirm are dry %wpm ilia memo aloito•rg<Imitable swore (mot andat.IIII von. • Mime die fermi. ke (aelpLIM(0. min pit on and le, • Maur Jaye,tn aniiiirrit hunk onvank vritarrJ • Revirestommerempneanoia peemicilrobin • Romer ?mains policy AMMir aiming rdeasante elyv (tunable frt wrens • %los lm amine • Soh *Ricci •••4•••••••• Month. Directer • Cormier( miming miliAnyeirday maenad • !man IlhIndriatIVI • Slimy erononosire /de awn miner I DonorAdvised Fund Type I Supporting Organizations (S.0.) (6100MM+ donors) DM *taco* is SO has& make tefelTIOICIMIMMIS m Mee Manion. 1 • ifive*•••• • disrntunons A Caaduk's board Conduits bead C Candthesbeard • who SO Iwo.. 3 4 S 6 Us Donor 5. Donor USDonor 7 B A B C Conduit Conduit Combat 9 10 J.P Morgan 96 or...0*y el the &men alee boadrusiInpfroired attend by the Spowsnrobk Ortnun SDNY_GM_00078565 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001692 EFTA 001890;2 EFTA01301144  • Contributions of concentrated positions.if good investments. may be retained if the aggregate public chanty asset allocation is prudently diversified. although DAFsare suEllett to excess business holdings rules • A majority of the public sponsonng organizations board must be independent • A majority of directors of the supporting organization must be appointed or elected by the sponsoringpublic organization. Members of the supporting organization's board do not have to be actually compnsed of the sponsonng public organizations board, but may be their designees, including officers of the public chanty who are not board members • Supponing organization boards may delegate responsibility to S O subcommittees Subcommittees may confer with external advisors and make recommendations back to board • DAF may delegate to or accept recommendations from 5O. subcommittees with regard to investments and grantmaking • Form 1023 and related correspondence will be available for public inspection, not lust the determination letter as will the state exempt corporate filings • S 0.s are necessary if donors want to retain some degree of control/ability to recommend customized investment allocations and potentially greater influence over grants; donors may be on the board of their S.O. • Individual per donor 5.O.s allow for • Segregated riskwith respect to contributed amounts • Donors to serve on their own boards • Donor control over investments. and • Donor advisory on grants SDNY_GM_00078566 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001693 EFTA_00189033 EFTA01301145  GOSibilsitt J.P. Morgan has been managing risk and fiduciary responsibilities for over 160 years Volatile markets and rigorous.changingregulatory and tax environments have caused many existing foundations to re-evaluate current policies and philanthropists to reconsidercharitable entity options Risk Management consideration Risk Management disciplines • Liquidity • Tranyarenty • Strive to maximize nsk•adiusted return I.P. .\toggan (hantAble GivingFond • 9mstesting • Orawdown • Bring a full perspective (legal, tax. philanthropy, Gowns Bead el Diencon • Annual potential loss client) and institutional approach (rigorous 18.101kurdsrhen) • Payout requnenweis analytics and leverage of global team and insights) • Out, dilerncttrate,s to decision making • UMIFA UPMIFA UPIA • Prudent investor rules are relevant standards I.r Mans C Asouble Gmnit feed The War 11m3RiSses mast subpar art ge abeam. • Modem Portfolio Theory and diversification inform lionlie phut MattleisiNfrs OfsrwilypakeyesSI bald- lowdmia) decision making • Clearly delineate responsibilities and authority to I idociary and other considerations • Formulate policies and processes for fiduciary • Self &alms oversight and risk management EH • la.ableepondstutes • Implement risk management disciplines.control EIS US Ds US IS 1.13.0~ lelare AOSt hef Cots AGM. Get liSon • Failtne todisersbne and review at multiple levels of investment process 1111 AGSM 1••••••••1 BOOM MESS <GSM •••••••••illir Cial•••••0 &Cola! Otaeo••••••• 41.0•.• diammfm• • (omrowtnutair sr-Moistest • UBTI 011 • Otakratile requeremmo ES • PRICOMO ri ,..r.noir•SIS eallSeemS (Dsoludoosi • Incermethate saewtiomulcs • Pilvalf beneleclummaton • t•tetsbusines,holdings I • Ta. neuttAlutodkir,ti SDNY_GM_00078567 Confidential Treatment Requested by JPMorgan Chase JPM-SDNY-00001694 EFTA_00189034 EFTA01301146  GOSNI•litt Managing risk and fiduciary responsibilities for over 160 years Volatile markets and rigorous.changingregulatory and tax environments have caused many existing foundations to re-evaluate current policies and philanthropists to reconsidercharitable entity options Risk Management considerations Risk Management disciplines • Liquidity • Strivesomaximize risk-adjusted retum • Tompareuxy • Ciringa full perspective (legal. tax. philanthropy. • kresstesung I-P. Morgan Charitable GevingFund chent)ancl immunonalapproach(ngorousanalmics • 0r.hrdown and leverage of global teamand insights) todecimon GOVeilinIe d.f DilfdlOt• • Annual potential loss making i610bard worben) • Payout requeienwnis • Prudent investor rulesare relevant standards • Due diligence process • WAIF A. 1.19111FA LIPIA • ModernPortfolio Theoryand diversification inform decision mating P %lova Gtvovsledd TAsKMfli The P • Replan:4v onpleance anmstawbnes Chan.P.4..q load • Ckaily delineate cesponsibilmesandauthorny Opaffirwingpak eyettit...) (rote pbet IDowea gallops drub —Wes) ."kid • Formulate policies and processes for fiduciary oversight and risk management Aduciaryand other considerations us horamismi • Implement risk management disciplines. comioland • SclIdeakng review at multiple levels of investment process • Ta•abkelendwuret Aa Caw, Cr, • Faun, ro dignbuce Diwce US Dow Miami*