EFTA02517554.pdf

From: jeffrey E. <jeevacation@gmail.com> Sent: Friday, August 29, 2014 4:09 PM To: Larry Cohen Subject: Re: needs a lot of work as you can see i m only sending =his to you. On Fri, Aug 29, 2014 at 12:05 PM, Larry Cohen < wrote: 1045am PST work? Here is draft outline:=/u> CONVERSATION GUIDE TO INTRODUCE AND TEST NEW DONOR VEHI=LE AND SOLICT FEEDBACK FROM POTENTIAL PARTNERS Introduction * It has been a pretty amazing time for our foundation.=C2 We're approaching the 15 year mark for the foundation itself= and it has been my primary focus now for over six years. There are some really complex problems to solve and we've been making a =ot of progress and seeing some real impact. [Give some examples depe=ding on possible issue alignment with prospect) =/u> " In addition to focusing on our core program areas in =lobal Health, Global Development, and Education in the United States, Meli=da and I, along with Warren, are putting a lot of energy into thinking about Giving and Philanthropy more broadly. =/u> We live in an amazing time. There are big probl=ms to solve, but we've learned so much about how to address them. =here are a lot of potential resources that if properly directed could make a massive difference. * But there are significant barriers to giving effectiv=ly and so we're looking at what we might be able to do help. =/u> I EFTA_R1_01652874 EFTA02517554  * We've done this through several different ini=iatives. I think you are familiar with the Giving Pledge, which has =een great, and I'm happy to update you on that if you'd li=e. But I really want to focus on something new that we've been thinki=g about, which is creating a new vehicle to help donors manage their chari=able resources. It's a way to leverage some of the work we=E2 ve already done and let people more seamlessly integrate their giving. * We are still at early stages in shaping this, and l=E2 d really like to get your candid feedback on what might or might n=t be appealing about what we are doing. I'd like to walk you through the concept and then run through some questions. The New Donor Vehicle * =C2• As I think about engaging in philanthropy I see three=main buckets of issues: o First is the actual charitable giving. There ar= a number of important questions for people to think through in terms of w=at issues they care about, what are the best ways to address those issues, who are the best partners, how do they know it's wor=ing and so on. o The second is on effectively managing the investment =f those charitable dollars before they go out the door so that you actuall= have the maximum resources available and then can give necessary and appropriate guidance. o The third is around the financial implications. =How much are you actually going to give and when. What family consideratio=s are there? What are the tax implications for what you do and when you do it? o That all leads to question of how to structure all of this to most effectively address questions in the f=rst three categories. * =C2• There are a lot of different ways to manage giving in=the U.S. We landed on doing this through a private foundation. =We have a fairly unique structure where we created two separate entities. The first one manages the investments and then funds the s=cond entity which allocates the money. It's worked very well=for our particular circumstances, but it's complicated and not rig=t for most people. There are a LOT of extra tax rules to follow for private foundations and we neve= expected that we'd have over 1,000 people working there. 2 EFTA_R1_01652875 EFTA02517555  • =C2• Alternatives to creating a private foundation include=setting up a Donor Advised Fund or Supporting Organizations. Each ha= advantages in terms of tax efficiency and influence over investments and expenditures. </=> =/u> • =C2• And while there are plenty of resources to help with =he question of where to give, it's not a very mature market and it=can be a tricky space to navigate. =/u> • So that's why I'm testing this new me=hanism. • =C2• The goals would be to:=/u> o Maximize tax efficiency for the donors. o Enable sufficient flexibility in terms of management =f the investment resources. o Allocate the resources against issues and organizatio=s that we know will have a tremendous impact but also give the donors flex=bility in terms of areas of focus. o Avoid fees and complexity o Do this in a way that is viewed favorably HOW IT WORKS • In order to address these goals I'm looking a= creating a new vehicle that would tie together how a donor could manage t=e investment of charitable dollars and facilitate the charitable expenditures. =/b> • If we can do this at the right scale the impact would be incredible. =/u> • New Donor Vehicle. o We will identify an existing public charity with exce=tional experience and reputation in managing donor advised funds and simil=r donor vehicles. 3 EFTA_R1_01652876 EFTA02517556  =/u> o We will create a new public charity affiliate to that=existing organization, where the foundation will have significant influenc= by appointing a minority of the board. o Doing this with an existing public charity will allow=us to leverage existing infrastructure and keep the administration of the =ehicle lean. o This new organization will sponsor donor-advised fund= into which you can contribute. It will also serve as the parent of = supporting organization into which you can contribute.</=> o Whether a donor-advised fund or a supporting organiza=ion is the right vehicle for you will depend on the assets you want to con=ribute and the amount of ongoing influence you would like to have, but in both cases you would be entitled to the more favorabl= charitable contribution deduction available for contributions to a public=charity (as compared to a private foundation).=/p> * A donor-advised fund is a separate fund on the books =f a public charity. You have the opportunity to have substantial influence over the investment and distribution of funds =n the DAF, but legal control rests with the board of the sponsoring organi=ation. =/u> * A supporting organization is a separate legal entity =ontrolled by a public charity. While the law requires its parent to elect = majority of the board of directors, you or your designee can hold minority board seats and exercise substantial influence over the =nvestment and distribution of funds in the supporting organization.<=u> o So that's how this would address managing the=investments. In terms of the expenditures, the DAF and/or supporting=organization will make required minimum distributions each year of 5%. This is the standard for private foundations. Our idea =ould be that at least 3% would go to a new public charity which works in p=rallel with the foundation. Distributions of the other 2% would be a= the donor's discretion. </=pan> o The foundation will create and control this affiliate= public charity whose mission will be aligned with that of the foundation..b> =/u> o Our affiliate will distribute those funds to further =ur foundation objectives, so that your funding becomes additive to ours an= is distributed with the same rigor and focus as our own. 4 EFTA_R1_01652877 EFTA02517557 =/u> From: jeffre= E. Imailto:jeeracation@gmail.com <mailto:jeevacation@gmail.com> Sent: Friday, August 29, 2014 8:45 AM To: Larry Cohen Subject: today? time? please no=e The information contained in this communication is confidential, may be attorney-client privileged, may constitute inside information, and is intended only for the use of the addressee. It is the property of JEE 5 EFTA_R1_01652878 EFTA02517558  Unauthorized use, disclosure or copying of this communication or any part thereof is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com <mailto:jeevacation@gmail.com> , and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved =C2 please note The information co=tained in this communication is confidential, may be attorney-client pr=vileged, may constitute inside information, and is intended only for JEE Unauthorized use,=disclosure or copying of this communication or any part thereof is stri=tly prohibited and may be unlawful. If you have received this commun=cation in error, please notify us immediately by return e-mail or by e-mail to jeevacation@gmail.com <mailto:jeevacation@gmail.com> , and destroy this communication =nd all copies thereof, including all attachments. copyright -all rights=reserved 6 EFTA_R1_01652879 EFTA02517559