EFTA01154756.pdf

Why choose AEF?gate s apollo • Independences ga; AEF-is a neutral platform for Donor Advised Funds, tools, information, and investments to enable donors and professional advisors to design and conduct their charitable activities as effectively and efficiently as possible. AEF is the only leading Donor Advised Fund program to offer this level of independence and personalized charitable management. • Contribution flexibility: AEF gaDonor Advised Funds can accept and hold a wide array of assets. • Investment choice and true independence: AliF's uo unique independence provides greater flexibility in investment options free of conflicts of interest that may arise from a finn's proprietary products. AEF can be used from your preferred investment platforms. • Flexible investment management: You may recommend an independent investment advisor to manage the assets in your Donor Advised Funds. • Greater reach: You can expand your grant recommendations to help charities throughout the country, in addition to your local community.and take advang avantage of the gates foundtiaon giving machine. •—lRiscal-responsibility.; luve_af elwee#Ae_asseunee_Amef icaFF_Eadowmem.4600dation_ha5.e.af f ied_euf twelfth-consecutive 1 Aar-ratingrfteceiving four -out -o€ a-possible-four stars indicates that-your ocganization-adheres-to-good-govecnance-and-other-best pr-actices-that-minicaize-the-chance-of-unethical-activ.ities-ancl-r.onsistently-exiacutes its minion in a fiscally responsible way." Charity Navigator The AEF GA Donor Advised Fund program was specifically designed to enhance your opportunities for large givingoptions. The problems of effective giving at a large scale are unique. They include a scarcity of experince at the big giving level. Charities are rarely set up to accept very large donations. Though over 500 billion in wealth was transferred to only the forbes EFTA01154756 400 last year alone. There are few charities that are capable of dealing with even a 1 billion dollar gift. The privledge of being able to give away serious wealth. Is burdened by the lack of creative new ideas , and expertise of the smaller charitable orgaizinations. Benefits include: Immediate and maximum tax benefits_. Timed on an individual basis. Because AEF GA is a public charity, contributions immediately qualify for all the maximum tax benefits. (see Tax Benefits) You will be able to canChen-recommend grants to charities across the nation and even internationally in some instances. on your own flexible timetable. Join in with Bill and share his giving and investment experience. Tax free growth (which means more dollars for charitable purposes). Managed by the countrys top investment professional.s. Investments in your-Donor-Advisethe GA EFTA01154757 Fund obviously grow tax free to support more giving in the future. The_ AEFga Donor Advised Fund lets-would let you you structure your giving over time, enabling you to leverage the impact of your grants to worthwhile causes, you would be giveng the opportunity and flexibility of joining , partnering with Bill in one of his already established 27 silos of giving . at the same time deciding on privacy or enhanced recognition as one of Bill Gates select partnes in philanthropy.; Privacy AS Charitable giving can be quite personal. You may want prefer a buffer between yourself and grant-charity seekers.. GA seekers,AEF enables you to select recognition or privacy as desired, (i.e., privacy in contributing assets, privacy in grant-making, and even anonymous grant- making.) Simple and effective Fund management EFTA01154758 etiminate-the-Year- enEVPres-guresguel'Eas serambliitg4or-fti3iffee4oinake-a-tas)i- ileduetible-clonatioli-or-huating-through-files for-eharitable-donatioli-reeeipts. You can research charities online, sit with the gates experts and or recommend grants online, track giving over time, and consolidate your tax reporting. Creation Creating of a lasting legacy of giving Vom-ean-staft-gmall-and-IluiltVover-time-oF maximizeour-initial-eontributioth Currenti llas-FtmEts-tkat-rang&from 4 00 0-te-$10-mitti&th-D&Hor-s-tYllieallY establist-a-n-A-EF-Donor-Ativised-Fun44o aet-as-.1-mul4.gen,emtioital-fa.imi nfl4oF their-eharitahle-givin-g,For-exampleyou ean-p-ersonalize4he-a.eeount-Nvith-a4amily name (e.g., "The Smith Family Fund"), invol*e4amily-imembers-in-reeommending grants3-aREVRaffie-s-Reees-gor- advigors,. . donors would have access to Bills unprecedented scope and experience in the EFTA01154759 world of big giving.Multiple-ways-to-work ivith-us Ofdine -bythenev4H-fefseni*--- or4hrouglEyour_ativiso" mitil3*-fax (otuandkyour • • • • • • • • He has commited his future time to philanthropy and would hold private. Or small group meeting to explore new ideas. Tax Benefits Save taxes in four ways 1) Contributions are tax deductible in the year they are made. Because AEF-oa is a public charity, contributions qualify for immediate and maximum tax benefits. • Deduction for cash: Up to 50% of adjusted gross income (AGI). • Deduction for securities and other appreciated assets: Up to 30% of AGI. • Five year carry forward of unused deductions. 2) Avoid capital gains on gifts of appreciated property. 3) Avoid estate taxes. 4) Investments in a Donor Advised Fund can grow tax free. Other tax considerations When contributing the following asset types to AEF, donors can deduct the full market value of the asset subject to the AGI limitations mentioned above. If contributed to private foundations, the donor's deduction would likely be limited to cost basis. • Closely held stock (C-corp or S-corp). • Real estate. See-Compacisor44-lacivata-Founclatiori-n—Donar--A44.4secl-funcl Note::- The4nfoFmation-provicted-Ilerei-n-is-for--informatierial-pur-poses-only-and-should not-be-interpreted to constitute-legal-ancr/otax-acivice.-Donors-should-consult their legal and tax advisors regarding their specific situations. EFTA01154760  • Americans who wish to support charitable organizations at a big level find themselves with few well thought out choices. The great wealth and responsibility of charity has moved from the publice sector into the private sctor . This burden is shared with Bills team of 1000 foundation employees. And Apolos experince magnin over a hundfred billon dollars. a-genemes-bat-bewildeFing-afFely-of-011anthropee shoices-and-options.-Hem-aFe-a-few2 R:iieS-414-thlimb2 Clarity of Purpose. Establish policies and procedures that define your program interests and your fundamental objectives. Governance. Create an identifiable person, board, committee or other decision- making body that is responsible for establishing and implementing your policies and procedures and reviewing and revising them on a regular basis. reviewing and acting on grant applications that arc consistent with your policies 3nd purposes Communicate-openly-wit-h--gcantceekerc about your grantmaking policies ansl-pr-osectums, elevelop-a-chacitable-mission-anei-ease-ioto-philanthropy, Make readily available a brief written statement about policies, program interests7 gr-antmaking-pfactisosr -geographio-anct-polisy-restristions-and--pmfarced-nys--of reeeMng-applkationsrIt-is-impeetent-thet-gfantseekessaiyhose-preposals-faikautaide our interests are notified in a timely manner and that those whose proposals am still under-consideration-are-infermed-ef-the-steps-aed-timing-that-will-be-taken-in reaching-the-final-decision. Public recognition or privacy: Some donors prefer recognition others prefer confidentiality. Your approach may change over time. See Privacy Legal Complying with the law is both complex but essential and we recognize that inadvertent violations can occur if the basic legal rules are not understood. GILA& reviews all charities prior to fulfilling a grant recommendation. And in mamy cases has already begun a program in your area of interstl Issues to consider: Contributions Donors considering charitable contributions of illiquid, non cash assets, i.e. closely- held stock or real estate, should be aware that: Smaller charities are often not equipped to handle gifts of illiquid, non-cash assets, or if accepted, the liquidation is poorly handled resulting in fewer dollars to charity. Breaking up concentrated holdings for distribution to multiple charities creates execution challenges. Most larger charities want to liquidate gifts of illiquid, non cash assets immediately. How might this impact your decision. Accountability With large giving capacity becomes an issue in almost all cases. It is important to match the size of the contribution to the capacity of the charity. Capacity is a term that encompasses size, administrative capability, stability, and accountability of the board. Are the charity's administrative expenses reasonable? Does the charity have the sophistication to use a large gift effectively? Large grants can can be problematic to a small chairity.be-like-a-heavy-reek-dmpperi-ioto-the bottom-of-a-small boat-Many-small-charities-have-become-diviiied-ovac-large EFTA01154761 contributie4s--clue--t-e-The--Iacrk-of--a--qlear—strat-egic-plaar -dear-+oliciesr-and--i4vestme4t experience. Also, some charities may treat contributions as "free money" and use donor-intended. Better than a private foundation, Mismanagement-of-contributions Donors-may-have-concerns-that-the value of their investments will be eroded with poor-investment-decisions,-particularly-with-small-charity. Administration For many donors, Donor Advised Funds are an attractive alternative to creating a private foundation. Because they are donations to a public charity, contributions to a Donor Advised Fund qualify for more favorable charitable deduction treatment than contributions to a private foundation. Because they are assets of a public charity, Donor Advised Funds are not subject to the self-dealing, payout, and taxable expenditure rules applicable to private foundations. Finally, because the public charity owns and administers the Fund, the donor is freed of the administrative burden of creating and maintaining a private foundation and also benefits from the philanthropic and substantive expertise of the public charity. Privacy Donor Advised Funds provide donors with flexible options for recognition or privacy. In contrast, Private foundations have little confidentiality and offer no anonymity. With the advent of the Internet, information is more available than ever. Today, anyone with a computer can access Guidestar (www.guidestar.org) to gain information on any private foundation. Since all of the information is pulled from a foundation's 990-PF, anyone can see the asset balance, the directors, contact information, administrative fees paid, every grant that is made (organization name and amount), and investment management fees (holdings are sometimes included). Donate now, decide later A contribution to AEF—Qa rseparates the tax event from the grantmaking event. You recommend grants to charities on your own timetable thus reducing year-end pressures to select one or more charities to support. Facilitate special asset considerations Not all charities accept or have the knowledge or capacity to accept gifts of stock and other appreciated assets. Your Donor Advised Fund provides you the maximum deduction allowed by law, and AEF has the expertise to accept the widest array of assets. Make the most of your charitable dollars You or your advisor can recommend the investment strategy for your contributions to your Donor Advised Fund. This eliminates the concern about how charities manage or mismanage investments. Any growth in assets is tax-free which provides the potential for greater charitable gifts. Reduce recordkeeping frustrations A Donor Advised Fund account provides consolidated reporting and record keeping. You can make grants to multiple charities and you will need only one tax substantiation letter (for each contribution to the account). You can also review your history of grantmaking online before making future gifts. Leave a lasting legacy Your Donor Advised Fund can establish an enduring family legacy for philanthropy. Your family can continue involvement in grantmaking and investments by naming successor advisors to your account. EFTA01154762 Provide for accountability It is important to match the size of the contribution to the capacity of the charity. sephisticationr stability7-and-aceountability-4-the-beacdrAce-the-elftarity12 / administrative expenses reasonable? Does the charity have the sophistication to use a large gift effectively? hafge-grants-ean-be4i-ke-a-heavy-rec-k-dFepped-inte-the-bettern-of-a-smalkbeatrMany small charities have become divided over large contributions due to the lack of a clear-strategic-planr cleaf-policies,and-investment-expeFiencerConvecsely7-seme larger charities treat contributions as "free money" and use them to pay for fundraising-and-administrative-expensear whiell-is-typieally-riet-w#at-the-derier intended. Giving-througtr-an-in4iepenelent-intermediaFy-eharity-such-as-AEF-is-a-f4exible-way-to pr-Guide4ong•ter-m--suppopt-for--faver-ite-carses.-AEFr as-tbe-iadependent-intecmediar-y ean-depiate-eapital-and/er-ineeme-te-the-werth.tehaFities-at-yeur-recentierielet-len7 That--way-the-eapital-is-well-nrrariagead-by-a-Fespensiele-entity-and-the-Verk-ef-the operatifig-chafities-is-suppected, AEF GA can accept and hold a wide array of assets. Below you'll find a brief overview of some of the most common types of assets that you can donate to an AEF Donor Advised Fund. • Checks • Publicly traded securities • Closely held stock o C-Corp o S-Corp • Life insurance • Real estate • IRA assets While most donors will choose to make contributions to gaA€F by check or by contributing publicly traded securities, some donors make gifts from more complex assets. AEF can accept and hold a wide array of assets.Si-sheuld eenssit_witi,Eyeuf4egafr_taxran4financiat.advisessyriec-te-FRakin-a-‘entfibution. At-AEF-r vieGA will offer uniquely flexible investment options to help each donor meet his or her unique philanthropic objectives. • Investments: Your Fund may invest in a broad range of securities, including stocks, bonds, and mutual funds. Contributed assets can also be held in-kind. • Investment Management: The appollo experience AEF-permits donors to recommend a financial advisor for their account. The recommended advisor can provide the Fund an investment approach that is balanced and customized. o Separately Managed Accounts:-At-AEFI AT GA one can choose to cominlqe investments anad contribution decions. each Fun ^^ il it i segregated-arrid-separately-managedrAE-F-dees-Ret-peeker-c-emintle trivestments7 o Customization. You . if os desired can appoint your owand your advisor can recommend a tailored investment program for your Donor Advised Fund. o Transparency—At-AEFGA , you will always be able to acess your portfolio, you know which securities are held in your Fund's portfolio. • Custody Flexibility: You or your advisor can recommend where investments are custodied. EFTA01154763 ecially-Respensibe4nvesting-andafferadvise4-Funds Socially-responsible-investing-assets4n-the-U-S„-sur-ged44-recent--yeara. Traditionalr social responsible investments have avoided investments like tobacco stocks-aa looking-for cow employees-well-or-that-bave-good-environmental-records. ACF--DonocAdvised-Funds--diter-ddnocs-flexeibie-investrnent-optionsto-helpeacla-donOF meet-h4s-er-heF-ueique-pl:Eirant-hr-epic-eb-jeetives, .—Separately-Managed-Accounts:-At-A€F, each Fund-is-segregated-and separately-managed.-AEF-does-not-pool-or-commingle-investments, c Transparency. At AEF, you know which securities arc held in your Fondis-portfolio, e—Customization. You-and-your-advisor-can-recommend-a-tailored investment-prograrn-for-your-Donor-Advised-Fund, steeksr bendsr and-mutual-fonderContributed-asseto-ean-alse-be-held4n-kincl, .—Znvestment Management-AE-g4ves-donors the ability to maintain a relationship with an existing financial advisor. The recommended advisor can provide the Fund an investment approach that is balanced and customized. Custody FlexibiIity You or your advisor can recommend where investments are-costoclied, Although most donors opt for full recognition, you may want a greater degree of privaein-your-eharitable-giving,Charitable-giving, c-an-tie-epate-perseinal, Points-to-consider4 Contribution privacy: donors sometimes want a higher degree of privacy in contributing assets. For example an active member in a community may want greater privacy in his/her contributions-than-can-be-provided by a cornmonity-foundation-run-by-his,therpeS. Investment privacy: donors may want privacy in the investments in their Fund. Grant-rnaking, pr:waey4 - Donors-may-be-concerned-about being-inundated with unsolicited-grant cequests„ •—Eksoners-n:iay-want-te-aveid-futtire-grantrnaking-pressures, .--Donors-may-net-want to be "lobbiedfor-pet-projects, - Donors may want absolute anonymity to protect a child from special attention, Privasy-on-your-own-terms At-A&F-7-we-consider-custamer-privasy-to-be-a-fundamental-priority-oPaur-client celationships„-We-are--committeci-to-maintaining-the--confidentialityr iategcityr and anonymityrDOREWS-ean-eheose-te-maintain-a4evekcif-privaey-or-ehange-this-en-a case-by-case-basis, Our-promise-to-you neutrakplatraFm-free-ef-autside-influeneesrAE-F-hes-nO-kicklen-er-unspeken-agenda7 (Progranwratior sociair religiousr investmentr geographicalr or-succession) Link-to-a--c.omoarison--ici--Pcivato-Foundation BEQUESTS from wills, This platrform allows one to feel comfortable that their hard earned money will be invested and given away with the Integrity backed by contrast, private foundations provide little confidentiality and no anonymity. With the EFTA01154764 a computer can access Guidestar (www.guidestar.org) to gain information on any private-feundatienr-Sinee-all-ef-the-infeFmatien-is-pulled4R3A1-a-feunilationaRF asset-balances the-directersr eontacinfermatienr administrative-fees-paidr evecy grant that is made (orgaaization name and amount), and investment management fees--(holdings-ar-e-sometimes--included), Enhancing Charitable Trusts with Donor Advised Funds Charitable Remainder Trusts Donors can create an opportunity for continuing family involvement by naming ArnefiGa14-E-nclownientGA Foundation as the remainderman on a Charitable Remainder Trust. Here's how it work: I. A donor contributes to a CRT, receives capital gains tax benefit, income tax deduction, and lifetime income stream. 2. At termination of trust, the remainder interest is transferred to a Donor Advised Fund at American Endowment Foundation. 3. A donor's family can stay involved in these meaningful assets after the CRT terminates. The family can then recommend distributions from the Donor Advised Fund to charities over time. Benefits: 1) Continuing family involvement. 2) This strategy eases the pressures associated with deciding the ultimate charities. AEF, an IRS recognized 501 (c)(3) charity, qualifies for the maximum and immediate tax deduction . 3) The donor can use the Donor Advised Fund as the vehicle for their lifetime charitable giving. 4) When income from the CRT is no longer needed, the Donor Advised Fund can become the charitable overflow to the CRT. 5) If a donor wants to accelerate a CRT in order to give more to charity now or in the near future, he/she can collapse the CRT into a Donor Advised Fund. see terminating a Charitable Trust Naming AEF as income beneficiary on a Charitable Lead Trust EFTA01154765  Donor Charitable Lead Trust Donors Family • • • • Family Donor Advised Fund at AEF A donor contributes an asset to a CLT for a specified period (either a term of years or someone's life), and receives tax benefits. Distributions are made annually from the CLT to the family's Donor Advised Fund. The donor, and then children recommend distributions periodically to charities from the family Donor Advised Fund. After specified period, the principal goes to your family (or other designated beneficiaries). Benefits: 1) Continuing family involvement. 2) provides a unique forum for families to work together. 3) offers the opportunity for several generations to join in a common purpose. 4) may become the "link" that connects families whose branches are increasingly geographically dispersed. Charitable Trust Termination Complete terminations of charitable remainder trusts are appealing for two primary reasons. The donors no longer want or need the income, and/or they want to give to charity in the present or near term. At some point during the trust term, the donor(s) may decide that they no longer need the trust payments. The donor may at that point transfer to charity their right to receive future trust payments. Depending on state law, the controlling language of the trust document, and the trustmaker's charitable inclinations, one possible solution is to create a Donor Advised Fund with American Endowment Foundation. The donor(s) can use this Fund to recommend grants immediately, and the family can stay involved in these meaningful assets for future grantmaking. Program Related Investment (PRI) is a way that family foundations can use to leverage their philanthropic dollars. Unlike grants, however, foundations get a return on their investment, through either repayment or return on equity. Also called "Mission Driven Financing" Program-related investments are alternatives to outright grants. Some foundations provide low interest loans to charities that must be repaid and therefore are available for future grantmaking. Private Foundation GA Donor Advised Fund EFTA01154766 Valuation tir charitable deduction: rlosely held stock or real Cost Basis Fair Market Value estate Valuation qf publicly traded securities Fair Market Value Fair Market Value I 50% for cash, Income taaf deduction - apasorsash. 30% for appreciated percentag of AGI, with 5 year carry over 20% for appreciated assets assets Excise tax on investment income 1-2% of income No excise tax Set up explense Costly No set-up fees A Fund can be establishes IRS approkal orocess Time consuming in less than a da nnual dis ribution requirement 5% None Investment options Wide range Wide range Preparation of tax returns, IRS compliance, accounting, Donor must arrange for these Provided by AEF rants management, fiduciary oversight, legal and audit services Donor has flexible options 'None - All information is publicly Full recognition, Confidenti lit available via form 990-PF or partial, or full anonymity At AEFAT GA, we would encourage a leve of donor creativity not typically available in other donor advised fund programs. An example of this creative approach to family philanthropy is the use of assets in a Donor Advised Fund to fund a charitable cause where commercial funding sources are either not available to the charity or not available at attractive terms. In a Program related investments, the donor recommends an investment from his or her Donor Advised Fund in the charity with the understanding that the investment may be recovered within an established time frame. PRIs include financing methods commonly associated with banks or other private investors, i.e. loan, loan guarantees, etc. Case-Study-Pregram-Ftelated-Investment The Jamisonc watched their church struggle in keeping up with monthly mortgage payments-en-the-eid-church-while-the-new-churctewas-being-builti The-,Solution Theamisens-wanted-te-help-the-ehereh-manage-their-finanees-until4he-eld-ehueeh was-stilt-To-accomplish-this, they-recemmended-AELF-rnake-a-Pregram-Related Investment to the-church under-the-terms-of-a-loan-agreement-that-provides-for-the chur-ch-to-make--regu4ar-quagter-ty-payments--of-pr-incripal-4414-iater-estr well--below-the eur-r-ent-adlustab4e-r-ate-and-Mer-e-wit-hin-the-ehur-ehzs-rneansT This arrangement will enable the church to rcpay the loan to the Jamison's Donor Advised Fund-in10-yearcrAt-that-pointr the--Jamisons-intend to-reward-the-church-for EFTA01154767 exercising--fiscat-responsibility-lay.-making--a-gfaat-distributioe--to-The-chufch--for--the amount of interest paid over the course of the loan. Every one wins: the church gete the free use of the money the earns respect for exercising fiscal responsibility and thelamisonsLDonor-Advised Fund gets its "investment in-the-church-back, Program-related investments often take one of the following forms: - at-the-market, below-market loan (most common), or interest-free loan. - loan guaranty or letter of credit. - equity investment. - low-interest-rate deposit with a bank or other financial institution linked to line of credit lending vehicle for charitable or other exempt purposes. file:///Users/jeffreyepstein/Downloads/Philanthropy 101.pclf om arison: Private Foundation with AEF's GA's Donor Advised Fund AEF's-D Private-Foundation Fund Valuation-for-charitable-cleduction+-closely-held-steck-or-real Cost-Basis estate Valuation-of-publicly-traded-secufities Fair-Kafket-Value jai; Income-tax-deductien— 30-0/0-for-casti7 54 30 - per-centage-ef- -with-5-year-carfy-over with 20%-for-appreciated-assets 0/0 Excise-tax-en-irwestment-incerne 4-2-0/0-ef-inceme N £et up expense Costly Pk A Fund- IRS-approval-process Time-consuming in-!E Annual-distribution-requirement 5% laverAMEat-options Wide-range i Preparetion-ef-tax-retufnsr IRS-cempliencer acceenting7 Dener-must-acFa-nge-feethese PfE grants-management,fiduciary-eversitiht, legal-and-audit services Donor-h, scion---All-infar-mation-is-pulalicly Ful Confidentiality available via form 990-PF dr— *Private foundations provide little confidentiality. With the advent of the Internet, information is more available than ever. Today, anyone with a computer can access Guidestar (www.quidestar.orq) to gain information on any private foundation, including a scanned version of its 990-PF. Available information includes balance EFTA01154768 sheet detail (including investment holdings, a listing of directors (including contact information), every grant that is made (organization name and amount), and detail of administrative and investment management expenses. Terminate a Private Private foundations have a number of financial and administrative disadvantaG Foundation into a when compared to a Donor Advised Fund. These drawbacks include greater Donor Advised Fund investment restrictions, mandatory distribution and reporting responsibilities, • tax benefits and the sometimes-heavy burden of personally administering a pr foundation. see ComparisonGA will be a AEF is a public charity into which a private foundation may distribute all of its . The first step In the termination process is the establishment of a Fund at AEF- nto which the private foundation's assets will be distributed. Second, A€F-GA work with you and your client to take the necessary steps to terminate the pri foundation -- whether it is in trust or corporate form -- and arrange for the tre of assets to the new Fund at GAAEF, EFTA01154769