To be successful, private foundations, like any business, need smart business strategies. We can help you identify and implement the nonprofit sector's leading best practices.
Donor-advised funds
When developing your charitable giving plan, a donor-advised fund (DAF) may be the right strategy. This approach provides you with a host of benefits, and allows you to determine the ultimate recipient of your donations. Our team's brings guidance and can connect you to the right resources. All in service of helping you maximize your philanthropic impact in a way that makes sense for your overall wealth plan.
Understanding the benefits
DAFs are different than other philanthropic strategies (like a private foundation) in a number of key ways:
- Implement easily: Our team can set up your DAF account immediately with little to no cost, and with an initial investment requirement of as low as $25,000.
- Maintain control: You determine the recipient(s) of your donation and recommend grants and investment allocations.
- Take your time with decision making: With a DAF, you can donate over time without having to decide exactly where that donation will go. This lets you take an income tax charitable deduction now, and direct your giving when you’re ready.
- Enjoy tax efficiencies: When donating non-marketable assets—such as privately held stock or tangible property—to a DAF, your income-tax deduction is based on the fair market value of those assets. Non-marketable assets donated to a private foundation, on the other hand, are typically limited to the donor’s cost basis —the original value of the assets.
- Diversify a concentrated portfolio: Our advisors can help you contribute appreciated publicly traded stock to a donor-advised fund in order to reduce your concentrated stock position.
Choosing the right DAF
Not all DAFs are the same. We can help make sure that your DAF suits your current and future needs. Issues to consider include:
- What are the DAF’s investment options? These can vary widely, with some organizations offering few, and others providing a broad array.
- Does the sponsoring organization accept “unique or illiquid” assets? Not all funds will accept the assets that a donor might be well advised to give, such as appreciated stock or real estate.
- How flexible is the DAF regarding the choice of charitable recipients? You’ll want to understand which charities are on a sponsoring organization’s approved list, and how easily another charity may be added. Possible recipients, and the process for adding charities, can vary greatly among DAFs.
- Does the DAF have foreign grant expertise? If you want to give to an international charity, there are tax and reporting implications, among others.
J.P. Morgan’s Charitable Giving Fund is a donor-advised fund administered by the National Philanthropic Trust, a public charity and the largest independent donor-advised fund administrator in the country.
Enhancing your foundation with a donor-advised fund
A DAF allows your private foundation to satisfy its annual 5% distribution requirement, donate to nonprofits whose work falls outside of its mission statement, donate to non-U.S. charities and more. Our advisors can help you determine whether a DAF is right for your foundation.
If you’re seeking to simplify your giving strategy, J.P. Morgan can help you evolve your private foundation to a donor-advised fund account. You won’t lose control. You and your family will still have the ability to be advisors through a simple process.
How one woman improved the environment in Calcutta and Chicago
By donating interests in her private equity firm to her Charitable Giving Fund, she was able to receive a tax deduction before the interests were sold; advise on the timing of the sale; give to charitable recipients in her native Calcutta; donate to a nonprofit in her new city, Chicago.
Narrator: This is the story of how Abia, a business owner, donated interests in her private equity firm to help people in Chicago and Calcutta. Abia was a child when her family emigrated from India to the United States. As an adult, she launched a private equity firm that, after 10 years, had significant value and continued to grow. Abia wanted to give something back, both to her adopted country- the United States- and to her country of origin- India. To do this, she used a Charitable Giving Fund, the “donor-advised fund” offered by J.P.Morgan in partnership with a public charity called The National Philanthropic Trust, or NPT. Abia was surprised to learn that a donor-advised fund offered by J.P.Morgan could help. A donor-advised fund, also known as a DAF, is a vehicle for charitable giving that is easy to establish, cost-effective and tax efficient.
The J.P.Morgan Charitable Giving Fund allows donors to give internationally and to donate illiquid assets like interests in private equity firms. Firm interests are held by NPT until the donor says they can be sold. Liquid assets are invested on the J.P.Morgan platform until the person who donated them is ready for them to be given out as grants. Abia donated 5% of her interests in her firm to the Charitable Giving Fund. She immediately received a tax deduction based on the full fair market of those interests when they were donated, which was 12 million dollars. Although her tax deduction was immediate, Abia gained time for her firm and her gifting. The interests in her firm did not have to be sold until she was ready. Grants from the liquid assets in her Charitable Giving Fund did not have to be made until she had found the right recipients.
Two years later, Abia’s CGF had $1 million dollars in liquid assets. Abia wanted to make grants to improve the environment, but she didn’t know which groups to support. Advisors at the National Philanthropic Trust helped her identify a number of potential recipients. Abia chose to support two of them.
She advised NPT to grant $250,000 to a clean water group helping Chicago-area residents replace lead pipes. Abia also asked NPT to give $250,000 to an organization working on clean-air efforts in Calcutta, India. A year later, reports on these organizations’ progress were so favorable that Abia felt comfortable recommending additional donations to these same organizations from her Charitable Giving Fund. This is the story of how one woman is making a difference across the globe.
Imagine what you could do. Visit jpmorgan.com/CGF to learn more.
Note:
This video uses text, illustrations, and info-graphics to reinforce spoken content.
Text on screen:
J.P. Morgan
Legal disclosures:
All families described in this video are fictional. These are hypothetical case studies based on typical experiences. Any resemblance to actual individuals and families, living or dead, is coincidental. Results shown and past performance are not meant to be representative of actual results.
On screen:
An illustration of a woman with long hair.
Narrator: This is the story of how Abia, a business owner, donated interests in her private equity firm to help people in Chicago and Calcutta. Abia was a child when her family emigrated from India to the United States. As an adult, she launched a private equity firm that, after 10 years, had significant value and continued to grow. Abia wanted to give something back, both to her adopted country- the United States- and to her country of origin- India. To do this, she used a Charitable Giving Fund, the “donor-advised fund” offered by J.P.Morgan in partnership with a public charity called The National Philanthropic Trust, or NPT. Abia was surprised to learn that a donor-advised fund offered by J.P.Morgan could help. A donor-advised fund, also known as a DAF, is a vehicle for charitable giving that is easy to establish, cost-effective and tax efficient.
The J.P.Morgan Charitable Giving Fund allows donors to give internationally and to donate illiquid assets like interests in private equity firms. Firm interests are held by NPT until the donor says they can be sold. Liquid assets are invested on the J.P.Morgan platform until the person who donated them is ready for them to be given out as grants.
On screen:
Info-graphics: A stock certificate moves from a corporate building to a block of letters - CGF. The CGF letters move up along a line graph, indicating an increase in their value. The CGF becomes a wrapped gift, with a bow, labeled "Grant."
Narrator: Abia donated 5% of her interests in her firm to the Charitable Giving Fund. She immediately received a tax deduction based on the full fair market of those interests when they were donated, which was 12 million dollars. Although her tax deduction was immediate, Abia gained time for her firm and her gifting. The interests in her firm did not have to be sold until she was ready. Grants from the liquid assets in her Charitable Giving Fund did not have to be made until she had found the right recipients.
Two years later, Abia’s CGF had $1 million dollars in liquid assets. Abia wanted to make grants to improve the environment, but she didn’t know which groups to support. Advisors at the National Philanthropic Trust helped her identify a number of potential recipients. Abia chose to support two of them.
She advised NPT to grant $250,000 to a clean water group helping Chicago-area residents replace lead pipes. Abia also asked NPT to give $250,000 to an organization working on clean-air efforts in Calcutta, India. A year later, reports on these organizations’ progress were so favorable that Abia felt comfortable recommending additional donations to these same organizations from her Charitable Giving Fund. This is the story of how one woman is making a difference across the globe.
Imagine what you could do. Visit jpmorgan.com/CGF to learn more.
On screen:
An illustration of the long-haired woman between two globes, one showing India, the other showing North America.
A cursor arrow clicks on a link labeled: JP Morgan.com/CGF.
Text on screen:
J.P. Morgan
Legal disclosures:
The J.P. Morgan Charitable Giving Fund is subject to National Philanthropic Trust’s articles of incorporation and by-laws. All contributions to National Philanthropic Trust are irrevocable and unconditional when received and accepted by National Philanthropic Trust, which retains exclusive legal control over contributed assets.
National Philanthropic Trust, the administrator of the J.P. Morgan Charitable Giving Fund, has the right to decide whether to accept an asset. All decisions and any additional fees are fully discussed with donors before these gifts are accepted and action is taken to process them. Additional fees may be incurred due to illiquid assets’ potential complexities, legal fees and Internal Revenue Service (IRS) requirements. For example, IRS regulations make it the responsibility of donors to determine the valuation date and fair market value of securities gifts.
The tax deduction that donors may claim is subject to certain income limitations. As J.P. Morgan and National Philanthropic Trust do not provide tax or legal advice, donors should consult their tax or legal advisors to determine the deductibility of gifts to a donor-advised fund account.
This video and its content have been developed for Private Bank clients and prospects and are designed to provide general information relating to certain investment products and services offered by the Private Bank of JPMorgan Chase & Co. The views and strategies described herein may not be suitable for all investors and cannot be forwarded. This video and its content should not be relied upon in isolation for the purpose of making an investment decision, and more complete information is available, including a product profile, which discusses risks, benefits, liquidity and other matters of interest. Although information contained herein has been obtained from sources believed to be reliable, J.P. Morgan and its affiliates do not warrant the accuracy or completeness and accept no liability for any direct or consequential losses arising from its use.
IMPORTANT INFORMATION
J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions. Such advice should be obtained from your independent advisors. Prior to making a donation to the Fund you should contact your tax or legal advisor. Specific tax information contained within these materials is believed to be accurate and correct, but in all cases should be discussed with your tax or legal advisors.
Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
The J.P. Morgan Charitable Giving Fund (the “Fund”) is offered under an agreement between J.P. Morgan and National Philanthropic Trust (“NPT”), a public charity incorporated in Pennsylvania.
For additional processing and technology information, please contact your J.P. Morgan team. This document is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Specifically, this is not an offer or solicitation to purchase any investment solution discussed herein. All investments will be made by NPT through J.P. Morgan Securities LLC and will remain the property of NPT. Under the terms of the Fund, the policies of NPT and applicable law, the account assets are the property of NPT, and NPT has the final approval over asset allocation and grant recommendations.
Other restrictions may exist. For a more complete understanding, please review the Charitable Giving Fund Reference Guide, which governs this program, as well as the terms and conditions which govern your J.P. Morgan accounts.
The distributor of the J.P. Morgan Funds is J.P. Morgan Distribution Services, Inc., which is an affiliate of JPMorgan Chase Bank, N.A. JPMorgan Chase Bank, N.A. and its affiliates receive compensation from J.P. Morgan Funds for providing services. Please read the prospectus carefully prior to making recommendations in mutual funds or exchange-traded funds. Please note that some funds, due to their investment objectives and underlying assets, carry more risk than others. The prospectus contains information about the risks of investing in a particular fund, in addition to management fees and other expenses. Call J.P. Morgan Distribution Services at 800.480.4111 or visit www.jpmorganfunds.com for J.P. Morgan Fund prospectuses. Third-party exchange-traded fund prospectuses can be obtained through each third party’s Internet site, or you may contact your J.P. Morgan advisor for assistance. Return and share price will fluctuate, and redemption value may be more or less than original cost. While money market funds seek to maintain a stable NAV of $1.00 per share, it is possible to lose money in these funds.
IRS regulations make it the responsibility of the donor to determine the valuation date and value of a gift. J.P. Morgan and NPT will make reasonable efforts to process contributions in a timely manner, but will not be held liable for contributions not being recognized on a particular or certain date. For additional processing and technology information, please contact your J.P. Morgan team.
Additional information is available upon request.
INFORMATION ABOUT YOUR INVESTMENTS AND POTENTIAL CONFLICTS OF INTEREST
Conflicts of interest will arise whenever JPMorgan Chase Bank, N.A. or any of its affiliates (together, “J.P. Morgan”) have an actual or perceived economic or other incentive in its management of our clients’ portfolios to act in a way that benefits J.P. Morgan. Conflicts will result, for example (to the extent the following activities are permitted in your account): (1) when J.P. Morgan invests in an investment product, such as a mutual fund, structured product, separately managed account or hedge fund issued or managed by JPMorgan Chase Bank, N.A. or an affiliate, such as J.P. Morgan Investment Management Inc.; (2) when a J.P. Morgan entity obtains services, including trade execution and trade clearing, from an affiliate; (3) when J.P. Morgan receives payment as a result of purchasing an investment product for a client’s account; or (4) when J.P. Morgan receives payment for providing services (including shareholder servicing, recordkeeping or custody) with respect to investment products purchased for a client’s portfolio. Other conflicts will result because of relationships that J.P. Morgan has with other clients or when J.P. Morgan acts for its own account.
Investment strategies are selected from both J.P. Morgan and third-party asset managers and are subject to a review process by our manager research teams. From this pool of strategies, our portfolio construction teams select those strategies we believe fit our asset allocation goals and forward looking views in order to meet the portfolio’s investment objective.
As a general matter, we prefer J.P. Morgan managed strategies. We expect the proportion of J.P. Morgan managed strategies will be high (in fact, up to 100 percent) in strategies such as, for example, cash and high-quality fixed income, subject to applicable law and any account-specific considerations.
While our internally managed strategies generally align well with our forward looking views, and we are familiar with the investment processes as well as the risk and compliance philosophy of the firm, it is important to note that J.P. Morgan receives more overall fees when internally managed strategies are included. We offer the option of choosing to exclude J.P. Morgan managed strategies (other than cash and liquidity products) in certain portfolios.
Purpose of This Material
This material is for information purposes only. The information provided may inform you of certain investment products and services offered by J.P. Morgan’s private banking business, part of JPMorgan Chase & Co. The views and strategies described in the material may not be suitable for all investors and are subject to investment risks. Please read this Important Information in its entirety.
Confidentiality
This material is confidential and intended for your personal use. It should not be circulated to or used by any other person, or duplicated for non-personal use, without our permission.
Regulatory Status
In the United States, Bank products and services, including certain discretionary investment management products and services, are offered by JPMorgan Chase Bank, N.A. and its affiliates. Securities products and services are offered in the U.S. by J.P. Morgan Securities LLC, an affiliate of JPMCB, and outside of the U.S. by other global affiliates. J.P. Morgan Securities LLC, member FINRA and SIPC.
With respect to countries in Latin America, the distribution of this material may be restricted in certain jurisdictions. Receipt of this material does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. To the extent this content makes reference to a fund, the Fund may not be publicly offered in any Latin American country, without previous registration of such fund’s securities in compliance with the laws of the corresponding jurisdiction.
Investment products: NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE
Non-reliance
We believe the information contained in this material to be reliable and have sought to take reasonable care in its preparation; however, we do not represent or warrant its accuracy, reliability or completeness, or accept any liability for any loss or damage (whether direct or indirect) arising out of the use of all or any part of this material. We do not make any representation or warranty with regard to any computations, graphs, tables, diagrams or commentary in this material, which are provided for illustration/reference purposes only. The views, opinions, estimates and strategies expressed in it constitute our judgment based on current market conditions and are subject to change without notice. We assume no duty to update any information in this material in the event that such information changes. Views, opinions, estimates and strategies expressed herein may differ from those expressed by other areas of J.P. Morgan, views expressed for other purposes or in other contexts, and this material should not be regarded as a research report. Any projected results and risks are based solely on hypothetical examples cited, and actual results and risks will vary depending on specific circumstances. Forward looking statements should not be considered as guarantees or predictions of future events. Investors may get back less than they invested, and past performance is not a reliable indicator of future results.
Risks, Considerations and Additional Information
There may be different or additional factors which are not reflected in this material, but which may impact on a client’s portfolio or investment decision. The information contained in this material is intended as general market commentary and should not be relied upon in isolation for the purpose of making an investment decision. Nothing in this document shall be construed as giving rise to any duty of care owed to, or advisory relationship with, you or any third party. Nothing in this document is intended to constitute a representation that any investment strategy or product is suitable for you. You should consider carefully whether any products and strategies discussed are suitable for your needs, and to obtain additional information prior to making an investment decision. Nothing in this document shall be regarded as an offer, solicitation, recommendation or advice (whether financial, accounting, legal, tax or other) given by J.P. Morgan and/or its officers or employees, irrespective of whether or not such communication was given at your request. J.P. Morgan and its affiliates and employees do not provide tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any financial transactions. Contact your J.P. Morgan representative for additional information concerning your personal investment goals. You should be aware of the general and specific risks relevant to the matters discussed in the material. You will independently, without any reliance on J.P. Morgan, make your own judgment and decision with respect to any investment referenced in this material.
J.P. Morgan may hold a position for itself or our other clients which may not be consistent with the information, opinions, estimates, investment strategies or views expressed in this document.
JPMorgan Chase & Co. or its affiliates may hold a position or act as market maker in the financial instruments of any issuer discussed herein or act as an underwriter, placement agent, advisor or lender to such issuer.
References in this report to “J.P. Morgan” are to JPMorgan Chase & Co., its subsidiaries and affiliates worldwide. “J.P. Morgan Private Bank” is the marketing name for the private banking business conducted by J.P. Morgan.
If you have any questions or no longer wish to receive these communications, please contact your usual J.P. Morgan representative.
GIFTING AND REINVESTING IN ALTERNATIVE INVESTMENTS
There are key conditions that must be met in order for NPT to make an investment in an alternative asset class when the donor is a principal of the asset management fund or its parent entity. These conditions, outlined below, have been determined in accordance with IRS regulations and protect both the donor and NPT.
Investment Policy Due Diligence: The alternative investment must be permissible under NPT’s Investment Policy Guidelines. NPT will employ an independent portfolio advisory firm to review the proposed investment. This review may take up to four weeks.
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Private foundations -
Charitable trusts This tax-efficient wealth management tool is a smart way to support the causes you believe in and provide for your family members—during your lifetime and beyond.
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Donor-advised funds Making an impact starts with choosing the right structure for your philanthropic giving. A DAF can be a good alternative to setting up a private foundation.
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The Philanthropy Centre Our experienced philanthropic advisors can help you create a strategic approach for effective charitable giving.
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