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Donor advised funds: Merrill, community foundations team up. (Financial Focus).



Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis.  is launching a donor advised fund Donor Advised Fund

A private fund administered by a third party and created for the purpose of managing charitable donations on behalf of an organization, family, or individual.

Notes:
Donor advised funds have become increasingly popular.
 program in a joint venture with community foundations that its financial advisers will market to the firm's clients throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .

Donors will be able to use the fund to make gifts of at least $25,000 to local community foundations, and the dollars will be aggregated and managed by investment firms selected by an investment committee representing community foundations participating in the new Merrill Lynch Community Charitable Funds.

The committee will set policies and targets for allocating assets among equity, fixed-income and other investments, and will select investment managers based on recommendations by Merrill Lynch.

"Community foundations have a limited ability to be able to market themselves to donors," said Alicia Philipp, president of the Community Foundation for Greater Atlanta. "Here we have working with us a huge organization that has the ability to reach out to potential donors."

H. King McGlaughon, first vice president of Merrill Lynch & Co. and director of Merrill's Center for Philanthropy philanthropy, the spirit of active goodwill toward others as demonstrated in efforts to promote their welfare. The term is often used interchangeably with charity.  and Nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive.

Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law.
 Management, said the firm wanted to offer its clients a "uniform" charitable product "by leveraging the existing strengths of community foundations, rather than creating our own proprietary gift fund type of offering."

The joint venture, developed during eight months of talks between Merrill Lynch and 20 community foundations, represents a big new player in the increasingly competitive charitable-funds market and builds on a six-year-old joint marketing initiative Merrill has developed with individual community foundations.

Starting in 1996, Merrill encouraged its financial advisers to introduce their clients to their local community foundations, which agreed in return to offer Merrill Lynch to donors as an option for managing assets in donor advised funds A Donor-Advised Fund (DAF) is a charitable giving vehicle set up under the tax umbrella of a public charity, which acts as sponsor to many Funds. A Donor-Advised Fund offers the opportunity to create an easy-to-establish, low cost, flexible vehicle for charitable giving as an  they created as a result of referrals by Merrill Lynch advisers. That effort led to partnerships that Merrill Lynch developed with about 170 community foundations, McGlaughon said.

In those current partnerships, he said, individual community foundations create their own forms, terms and policies for their donor advised funds. That poses challenges for some donors and particularly for financial advisers who must master separate rules for community foundations in different locales.

In addition, he said, donor advised funds created through the existing marketing program are invested only in Merrill Lynch's proprietary asset management products.

A big challenge in creating the new venture, Philipp said, has been creating uniform agreements spelling out how the fund will work and how assets will be handled, invested and accounted, for to the donor The party conferring a power. One who makes a gift. One who creates a trust.


donor n. a person or entity making a gift or donation.


DONOR. He who makes a gift. (q.v.)
. The participating community foundations will create an organization that will support the new program and hire a national agent to provide administrative support for investment, technology, accounting, reporting, marketing, communications and tax issues.

Merrill Lynch and participating community foundations will hire NPO NPO [L.] nil per os (nothing by mouth).

NPO
abbr.
Latin nil per os (nothing by mouth)


NPO Nothing by mouth
 Solutions of Concord Concord, cities, United States
Concord (kŏng`kərd, kŏn`kôrd').

1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906.
, N.H., to develop, manage and maintain a Web-based technology platform to function as a central service bureau for the new fund. The fund will be accessible to donors, advisers and community foundations through a password-protected Web site, with multiple levels of access and security, depending on the needs of the user.

Revenue from donor fees, which have not been set but will be based on the size of the gift, will be split among Merrill Lynch, NPO Solutions and the investment managers and community foundations.

Using the Web-based platform, McGlaughon said, a financial adviser meeting with a client in a Merrill Lynch office will be able to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer.  and print out documents creating a donor advised fund. Once those documents are signed and forwarded to the community foundation designated by the donor, the adviser will be able to use the platform to move assets from the client's individual account to an account owned by the community foundation.

The donor then can go online at any time to recommend to the community foundation that it make distributions from the fund, and the community foundation's staff can go online to screen the proposed recipient, communicate its approval to Merrill Lynch and distribute the funds.

Each community foundation will be able to use the site to review all of its funds created through Merrill Lynch, while donors and financial advisers can use the site to review their own funds.

Participating community foundations must meet national standards created through the Community Foundation Leadership Team of the Council on Foundations The Council on Foundations is a membership organization of more than 2,000 grant-making foundations and giving programs worldwide. They provide leadership expertise, legal services and networking opportunities and other services to participating members and the general public.  in Washington, D.C., which is marketing the new fund to it members.

In 2001, the market value of assets at 658 community foundations in the United States totaled $31.4 billion, including $3.5 billion in new gifts to the foundations, according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 the annual survey of community foundations prepared by The Columbus Foundation in Ohio and the council's Community Foundation Leadership Team.

Todd Cohen cohen
 or kohen

(Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male.
 is editor and publisher of Philanthropy Journal, an online newspaper at www.philanthropyjournal.org. He can be reached at tcohen@ajf.org
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Title Annotation:Merrill Lynch to launch program in alliance with community foundations
Author:Cohen, Todd
Publication:The Non-profit Times
Geographic Code:1USA
Date:Dec 15, 2002
Words:796
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