EFTA02517541.pdf

From: jeffrey E. <jeevacation@gmail.com> Sent: Friday, August 29, 2014 4:07 PM To: Larry Cohen Subject: Re: yes 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. =/u> * But there are significant barriers to giving effectiv=ly and so we're looking at what we might be able to do help. =/u> EFTA_R1_01652861 EFTA02517541 * 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 I=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_01652862 EFTA02517542 * =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. =/u> 3 EFTA_R1_01652863 EFTA02517543 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 4 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_01652864 EFTA02517544 =/u> From: jeffre= E. Imailto:jee=acation@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 Unauthorized use, disclosure or copying of this 5 EFTA_R1_01652865 EFTA02517545 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 <mailtoleevacation@gmail.com> , and destroy this communication and all copies thereof, including all attachments. copyright -all rights reserved =C2 please note The information contained 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_01652866 EFTA02517546