Merrill Lynch Community Charitable Fund^® Program

WHAT IS THE MERRILL LYNCH COMMUNITY CHARITABLE FUND^® PROGRAM?

The Merrill Lynch Community Charitable Fund^® program is an innovative philanthropic service that allows Merrill Lynch clients to create a donor-advised fund, with the guidance of a Merrill Lynch Financial Advisor. Your donations will go to one of a number of leading community foundations in a nationwide partnership to support charities throughout the United States.

Donor-advised funds are one of the fastest growing forms of philanthropy today. With a donor-advised fund, you can match your philanthropic goals with a community's charitable needs.

WHEN SHOULD YOU CONSIDER THE MERRILL LYNCH COMMUNITY CHARITABLE FUND PROGRAM?

Consider establishing a donor-advised fund through the Merrill Lynch Community Charitable Fund program if you want a simple yet flexible way to make tax-deductible charitable contributions.¹ You may contribute to your fund through a one-time donation or a series of donations over time. Contributions to your fund are deductible in the year they are made, even if distributions to charities are made at a later date.² Fund assets are managed in a tax-exempt environment in line with management requirements for a public charity, and the proceeds and/or income derived from such assets are tax-exempt. You may recommend investment of the fund in any one of five institutionally managed pools and/or an interest-bearing bank deposit account.

A minimum of $25,000 is required to establish a donor-advised fund through the Merrill Lynch Community Charitable Fund program. Additional contributions to the fund may be made at any time, and the minimum grant recommendation amount is $250.

WHAT ARE THE BENEFITS OF THE MERRILL LYNCH COMMUNITY CHARITABLE FUND PROGRAM?

Make charitable gifts with ease

• Have your donor-advised fund administered by participating community foundations from across the country that know the nonprofit organizations in their area.
• Create a consistent legacy of philanthropy in a named or memorial fund and join the family of donors at the community foundation that maintains your donor-advised fund.
• Request charitable distributions from your donor-advised fund at any time to qualifying nonprofit organizations anywhere in the U.S.
• Name a family member or another individual to succeed you as advisor for grants from your donor-advised fund after your death.
• Take advantage of the ability of community foundations to make anonymous gifts.

Benefit from professional services

• Eliminate the need to oversee the day-to-day responsibilities of managing philanthropic gifts.
• Use the grant-making expertise and other support services of your local community foundation to help maximize the impact of your charitable gifts and develop your philanthropic strategy over time.
• Access exchange-traded funds and leading professional investment managers to help build charitable assets over the life of your fund.
• Donations to your donor-advised fund are deductible in the year they are made, even if the money is not distributed from the fund to charities until a later date.
• —    Gifts of cash and unrestricted, publicly traded securities held more than one year may result in an income tax deduction equal to the value of the assets at the time of funding. That deduction can be used to offset up to 50% of adjusted gross income for cash gifts and up to 30% for gifts of long-term securities. Excess deductions may be carried forward for up to five tax years following the year of the gift.
• Your donor-advised fund will not pay any capital gains tax on appreciated securities.
• Future contributions to your donor-advised fund may also be fully deductible on a dollar-for dollar basis in the year they are made, within the tax law limits stated above.²
• Assets in your donor-advised fund grow tax-free, which may allow them to support greater charitable giving over time.
• Donated assets are removed from your taxable estate, thus avoiding potential gift and estate taxes.

Time tax deductions and charitable recommendations for maximum effect

• You advise the community foundation maintaining your donor-advised fund on which charities you want to receive grants from your fund. You also recommend when and how much to give. The community foundation performs due diligence for each grant recommendation to help ensure compliance with all applicable laws and regulations and, if approved, makes the grant from your fund. The community foundations will also investigate improper use of grant funds for the private benefit of a donor or advisor.
• Contributing to a donor-advised fund lets you separate your tax management needs from your charitable goals, addressing each more effectively. For example, if your income jumps in a given year, you can contribute to your fund to obtain a tax deduction in that year and decide later which charities you wish to support.
• Your fund can be a tool for implementing family philanthropy and imparting your charitable values to the next generation. You can name successor advisors, such as children or grandchildren, to carry on your legacy of giving through your donor-advised fund.

Leverage your charitable gifts through community foundation resources

• Community foundations make up one of the fastest growing sectors of philanthropy in the United States today. They build and strengthen communities by making it possible for a wide range of donors to create permanent, named component funds to meet critical needs. Community foundations, through philanthropy that is visionary, diverse and inclusive, have become catalysts for improvement within urban centers and in rural settings.
• The community foundation that maintains your donor-advised fund serves as your partner in the nonprofit world and makes your charitable giving efficient by:
• —    Exercising due diligence in screening the charities you wish to support.
• —    Advising you about needs in the community that best match your charitable interests.
• —    Identifying opportunities to leverage grants from your fund through such programs as matching challenge grants at nonprofit organizations that suit your fund's objectives.
• The community foundation maintaining your donor-advised fund can make grants to qualifying nonprofits anywhere in the country. There is no geographic limitation to the grants that can be made from your fund.
• The community foundation maintaining your fund also provides administrative and back office support services for your donor-advised fund (including all recordkeeping), freeing you and your family to focus on other aspects of your philanthropy.
• Community foundations offer donors many services and benefits. They routinely work with families, individuals, attorneys and estate and financial advisors to design gift plans to help donors receive the most benefit from their charitable contributions and that their philanthropic dollars are used to the fullest extent. All share the common goal of serving donors, nonprofit organizations and the community as a whole.
• Community foundations in the U.S. collectively hold $50 billion in assets and are located throughout the country.³ In 2007, community foundations gave more than $4 billion to a wide variety of nonprofit activities, including urban affairs, the arts, education, environmental projects, health and disaster relief.³

Benefit from professional investment management

• Your Merrill Lynch Financial Advisor will work with you to recommend an overall investment strategy for your donor-advised fund, based on your risk preference and your intended timing of distributions to the charitable recipients.
• Assets within the fund will be allocated among a selection of leading money managers from across the country to suit your fund's needs. As market conditions change, the program's institutionally-managed pools will be reviewed periodically and adjusted as necessary.
• Responsible stewardship and prudent management of these assets are important to optimizing your charitable dollars and fulfilling your long-term charitable aims.

WHAT ELSE DO YOU NEED TO KNOW ABOUT THE PROGRAM?

The Merrill Lynch Community Charitable Fund program was created by Merrill Lynch Trust Company⁴ through the Merrill Lynch Center for Philanthropy & Nonprofit Management, working jointly with participating community foundations. The Merrill Lynch Center for Philanthropy & Nonprofit Management is one of the leading providers of philanthropic services for individuals and nonprofits.

To establish your donor-advised fund through the Merrill Lynch Community Charitable Fund program, you must sign an agreement with the community foundation that you select. Merrill Lynch is not party to this agreement. As with any legal document, you should discuss such an agreement with your attorney before signing.

Your charitable gift is irrevocable. Once the gift is made, the assets belong to the community foundation. You may advise the foundation on distributions from your donor-advised fund, but the foundation has no obligation to follow your recommendations.

Merrill Lynch and each participating community foundation are separate entities and are not affiliates. The donor-advised fund will pay an administrative fee to the community foundation and an investment management fee to Merrill Lynch Trust Company, in accordance with the published fee schedule. Your Merrill Lynch Financial Advisor will receive a portion of this fee.