EMPOWER YOUR PHILANTHROPY TO DO MORE J.P. MORGAN CHARITABLE GIVING FUND Investment Products: Not FDIC Insured No Bank Guarantee May Lose Value
YOU WANT TO MAKE A DIFFERENCE. THE QUESTION IS: HOW? The J.P. Morgan Charitable Giving Fund is designed to empower your philanthropy by giving you more ways to have an impact on causes that matter to you. Like all donor-advised funds, the J.P. Morgan Charitable Giving Fund is a philanthropic vehicle established at a public charity. It organizes your grants, provides an immediate tax deduction and allows you time to select recommended recipients thoughtfully. In addition, a J.P. Morgan Charitable Giving Fund account helps you: EXPAND YOUR OPTIONS Donate illiquid assets Access a wider variety of investment opportunities EXPAND YOUR REACH Recommend grants locally or internationally Remain anonymous or have your grants recognized EXPAND YOUR IMPACT Develop your giving with Private Bank insights and assistance Create a legacy
EXPAND YOUR OPTIONS Donate unusual assets and go beyond typical investment opportunities Start giving easily and receive significant advantages immediately. The grants you recommend may be in the hands of charitable recipients within days. These gifts also offer you the highest tax deduction for charitable donations available under U.S. law. 1 But that is only the beginning. DONATE 2 Publicly Traded Securities and Restricted Stock Most publicly traded securities and restricted stock are accepted into a Charitable Giving Fund account. Making a gift of appreciated securities can be especially tax advantageous, as it spares you from paying capital gains tax on the stock s appreciation and provides a tax deduction. These securities must be held for more than one year to receive the maximum tax benefit. Illiquid Assets You can donate such illiquid assets as privately held stock (including shares in C corporations, S corporations and limited liability companies), real estate, alternative investments, structured notes and derivatives. If accepted, they are liquidated for you, and the proceeds are deposited into your Charitable Giving Fund account. Funds from Private Foundations, Charitable Trusts and IRAs Many individuals who have private foundations create a Charitable Giving Fund account to which their foundation may make donations. Your charitable trusts and IRA also can name your Charitable Giving Fund account as beneficiary. Such transfers can help you and your family gain time to make decisions about grantees. 1 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. 2 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. 3 Accounts will be subject to an administrative fee payable to National Philanthropic Trust, product and transaction fees on investments, and potentially a secondary fee on certain investments payable to J.P. Morgan. Additional fees may apply. For more detailed information on fees, please see the Charitable Giving Fund fee schedule. 4 If the donor does not indicate a preferred allocation, his or her entire account will be allocated to a J.P. Morgan money market fund. Please request an Investment Solution Sheet for more information on the investment options. Restrictions may be imposed on investment allocations that would entail significant risk. As with all donor-advised funds, the charity responsible for the funds in this case, National Philanthropic Trust has ultimate legal authority over how the funds are invested. However, National Philanthropic Trust is committed to taking all donor recommendations under advisement. 5 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. 2
YOU HAVE REAL CHOICE Assets can be invested in more than 45 FUNDS ACCESS 3 The J.P. Morgan Platform Variety of Funds 4 Customizable Portfolios Until grants are made, the assets in your Charitable Giving Fund account are invested in selected funds offered on the J.P. Morgan platform, where they have the opportunity to grow tax free. You can indicate your preferred allocation among selected investments. A wide array of investments is offered, by J.P. Morgan and third parties, ranging from those that emphasize capital preservation to more aggressive equity-oriented and alternative asset strategies with a higher potential for return (and greater risk of loss). Specialists in our Endowments & Foundations Group can create customized portfolios, including alternative investments, for Charitable Giving Fund accounts that have $10 million or more. To get started SIMPLE MECHANICS You make an irrevocable, tax-deductible contribution (minimum of $25,000) in cash, marketable securities or illiquid assets to National Philanthropic Trust, the public charity J.P. Morgan partners with to offer the Charitable Giving Fund. 5 3
CASE STUDY MORE TYPES OF ASSETS CAN BE DONATED The sale of a family orange grove helped fund one couple s retirement and their gift to their community. 4
A Florida couple established a Charitable Giving Fund account by donating a 10% interest in their orange grove. The couple were selling the entire grove to help fund their retirement. However, they wanted to make sure that part of the proceeds went back to their community. 6 They assigned the 10% interest to their Charitable Giving Fund account. When the grove later sold for $10 million, a $1 million check was deposited in their account. The community benefited The donors ultimately granted most of this $1 million to organizations that served southern Florida, where they had been living for decades. The donors benefited Because the couple made the gift before the property was sold, they could qualify for a tax deduction while reducing the amount of their gain subject to tax by $1 million. A widely used strategy Donating stock, interests in closely held businesses and other property before a sale is often done for tax purposes. This strategy can be particularly useful before an IPO. Our neighbors and this county supported our business and family, helping both to grow and thrive. We are thrilled we can give back to the part of the world and the people we love. THE DONORS 6 All families described in this document are fictional. These are hypothetical case studies based on typical experiences. Any resemblance to actual individuals and families, living or dead, is coincidental. Information presented is not a guarantee of future results. 5
EXPAND YOUR REACH Give locally or internationally. Remain anonymous or receive recognition Take as much time as you need to identify grantees and have National Philanthropic Trust screen both potential recipients and the grants. 7 While your tax deduction is immediate, your recommendations for grantees need not be. But when you are ready, the possibilities are great. GIVE Internationally You can give directly to recipients anywhere in the world. Our partner, National Philanthropic Trust, will ensure the recipients are qualified, and will handle all paperwork and administration. This support is one of the reasons that even people with their own private foundations choose to make their international grants through their Charitable Giving Fund accounts. 8 In Local Currency Your dollars may go further because J.P. Morgan can convert your international grants into local currency. 9 Outside a Private Foundation s Mission Families with private foundations often create Charitable Giving Fund accounts so that they can give to causes outside their foundations missions. 7 National Philanthropic Trust, a public charity, is legally responsible for ensuring these proposed grants and grantees are qualified to receive the funds. It also should be noted that grants from donor-advised funds can be made only to charitable organizations that are tax exempt under Internal Revenue Code Section 501(c)(3) and that are public charities under IRC Section 509(a). Among other restrictions, proposed grants cannot be made to non-operating private foundations, to fulfill legally binding pledges already made by the donor, or to benefit the donor (membership dues, tuition, tickets or other goods or services) or any individual, or to support a political campaign or lobbying activity. 8 Decisions about grants to qualified foreign charities are made on a case-by-case basis. Additional fees apply. 9 Ibid. 10 These figures represent all the international grants, including those from Charitable Giving Fund accounts, that were made by National Philanthropic Trust to qualified charities between 2001 and May 2017. 11 A challenge grant is a grant that is only paid to the recipient organization if the organization is able to raise a pre-agreed-upon sum from other sources. 6
Foreign grants already have been made in 187 cities 72 countries 10 ACCESS Confidentiality Recognition Sometimes donors want to give without attracting attention. Such anonymity is best achieved through a donor-advised fund, as the grants you recommend are not made public. In contrast, when you give through a private foundation, all information is publicly available on the foundation s tax return. You can use your Charitable Giving Fund account to create specialized grants, with our assistance. Secure naming rights to buildings and programs. Endow chairs at universities. Establish scholarship programs. Structure grants so that they are multi-year, matching or challenge. 11 Monitor, Grant, Reallocate SIMPLE MECHANICS Through our secure, online portal, DonorView, you can: Quickly make grant recommendations (the minimum grant is $250) See your balances, contributions and those grants that have been paid Recommend investment reallocations 7
CASE STUDY GRANTS CAN BE MADE AROUND THE WORLD The donation of one man, now living in the United States, helped save the lives of newborns in the country of his birth, India. 8
A man born in India made his fortune in the United States and wanted to help the vulnerable in his native land. He had reached a point in his life where he was able to give back, and he hoped to help children in his country of origin get a good start. 12 The man therefore identified a hospital in the rural community where he had grown up, and decided to help with its prenatal and childbirth care. Small grant He gave $15,000. After vetting the recipient, J.P. Morgan s partner, National Philanthropic Trust, crafted the grant agreement. J.P. Morgan then converted the grant dollars into rupees before giving the money to the hospital (so that fewer transactional fees were taken from the amount the hospital received). Important difference A year later, National Philanthropic Trust checked to see if the man s money had been spent exactly as he had intended. It had been. In fact, the hospital was able to account for the number of healthy babies and mothers who had been helped because of the grant. Growing trend This man s gift is part of a trend. International giving is on the rise. Two groups in particular are helping to drive this trend: expatriates who wish to help their native countries and the Millennial Generation, which, raised with the Internet, tends to see the world as one. It is exciting to see the enormous difference even small grants can make around the world and the increasing enthusiasm people have to help their global neighbors. DIANE WHITTY GLOBAL HEAD, THE PHILANTHROPY CENTRE AT J.P. MORGAN 12 All families described in this document are fictional. These are hypothetical case studies based on typical experiences. Any resemblance to actual individuals and families, living or dead, is coincidental. Information presented is not a guarantee of future results. 9
EXPAND YOUR IMPACT You and your family can make a difference now and for generations to come Focus on the causes you care about. Your Charitable Giving Fund account can handle the burden of organizing and administering your philanthropy. 13 And this remains true whether sums are modest or run in the multimillions. CREATE Starting Point Ripple Effect Legacy You can start without a specific cause in mind and grow your philanthropy over time, as your experience, interests and mission develop. Many individuals give their Charitable Giving Fund account their family name and involve their children in giving decisions so the children can learn and become committed to making a difference. Your Charitable Giving Fund account can last in perpetuity. You can leave it to your children and grandchildren or to qualified charitable organizations. J.P. Morgan advisors are available to work with your other professional advisors to help customize a successor structure. 13 JPMorgan Chase & Co. and its subsidiaries do not offer accounting, tax or legal advice. 10
People are giving charitably to invest in their communities locally, regionally, nationally, globally in their family legacy and in the future. EILEEN HEISMAN PRESIDENT AND CEO, NATIONAL PHILANTHROPIC TRUST GAIN MOMENTUM Navigation Insights Advisory As a client of J.P. Morgan Private Bank, you have dedicated client service representatives to help you with your Charitable Giving Fund account. For more than 200 years, J.P. Morgan has advised some of the world s wealthiest on preserving and growing their fortunes. Insightful publications and peer networking opportunities are provided for emerging and experienced philanthropists. Help to refine large-scale giving programs is available from specialists in The Philanthropy Centre at J.P. Morgan. Replenish SIMPLE MECHANICS Additional contributions can be made whenever you wish. The minimum for additional contributions is $5,000. 11
CASE STUDY ALL OF THE FAMILY CAN BECOME INVOLVED One couple found a way to make giving real for their children. 12
A California family found a way to teach their children about philanthropy and to empower them. Every year on the children s birthdays, they were given an amount from their parent s Charitable Giving Fund account to donate. As the children grew older, the amount they could recommend for donation grew accordingly as did the family s conversations about their values. 14 By the time the children were adults, they had important experience thinking about charitable missions, investigating potential grant recipients, recommending donations and measuring progress. Freedom to develop The parents philanthropy was focused on improving early childhood education. But they chose to put $200 million into a Charitable Giving Fund account rather than create a private foundation with a defined mission because they wanted room for the family s philanthropic focus to evolve. Over time, the children developed passions of their own. The boy wanted the family s charitable dollars to help improve the health of the world s oceans; the girl wanted to fight contagious diseases. A family tradition For many years, the family s Charitable Giving Fund account supported three causes: education, ocean health and disease eradication. The parents left their Charitable Giving Fund account in equal parts to their children, who each now continue the family s philanthropic tradition with their own children. With the Charitable Giving Fund handling the administration, we are free to focus on the causes and organizations we want to support. THE FOUNDING GENERATION 14 All families described in this document are fictional. These are hypothetical case studies based on typical experiences. Any resemblance to actual individuals and families, living or dead, is coincidental. Information presented is not a guarantee of future results. 13
YOU WANT YOUR CHARITABLE GIVING TO MAKE A DIFFERENCE EMPOWER IT WITH THE J.P. MORGAN CHARITABLE GIVING FUND We invite you to discuss with your J.P. Morgan representative how your philanthropic impact may be enhanced by our Private Bank service, reach and investments. 14
Important Information 11
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. IMPORTANT INFORMATION 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. INVESTMENT PRODUCTS: NOT FDIC INSURED NO BANK GUARANTEE MAY LOSE VALUE 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. 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