Method of making a leveraged charitable donation while increasing net worth

• US 20060085313A1
• Filed: 03/09/2005
• Published: 04/20/2006
• Est. Priority Date: 10/15/2004
• Status: Abandoned Application

• Current Assignee: Social Capital Insurance Services Incorporated
• Original Assignee: Social Capital Insurance Services Incorporated
• Inventors: Selby, John H.
• Application Number:
  US11/076,198
• Publication Number:
  US 20060085313A1
• Time in Patent Office: Days
• US Class Current: 705/35
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method of funding a tax-exempt organization. A donor utilizes an original principal sum that is separated into first and second distinct parts. The first part is given as a freely given, separate, and immediate cash donation to a tax-exempt organization. The second part is utilized to purchase an equity-indexed annuity contract, which provides a premium bonus for the initial premium deposit. The corresponding increase in the donor'"'"'s net worth due to the premium bonus offsets the loss in net worth caused by the cash donation to the tax-exempt organization, resulting in no reduction in the net worth of the donor. At the same time the donor has provided the tax-exempt organization with a cash donation.

Claims

1. A method of funding a tax-exempt organization, comprising:

dividing an original principal sum of a donor into first and second parts;

donating the first part as a freely given, separate, and immediate cash donation to the tax-exempt organization thereby evidencing donative intent; and

using the second part as a premium deposit for purchasing an equity-indexed annuity that provides a premium bonus for the premium deposit.

2. The method of claim 1, further comprising allocating the first and second parts so that the premium bonus is greater than or equal to the first part.

3. The method of claim 1, further comprising allocating the first and second parts so that the premium bonus is equal to the first part.

4. The method of claim 1, wherein the equity-indexed annuity is purchased through an agency, and wherein a contract for the equity-indexed annuity requires a commission donation to a tax-exempt organization from part of commissions to the agency.

5. The method of claim 4, wherein the equity-indexed annuity is issued by an insurance company, and wherein the commission donation is paid directly by the insurance company.

6. The method of claim 1, wherein the equity-indexed annuity is purchased through an agency, and wherein, as a result of the premium deposit, a commission donation is made to a tax-exempt organization from part of commissions to the agency.

7. The method of claim 6, wherein the commission donation is made directly by the agency to the tax-exempt organization under an agency contract that is separate from a contract for the equity-indexed annuity.

8. The method of claim 1, wherein a portion or all of the annual gains for the equity-indexed annuity are donated, by the donor, to a tax-exempt organization.

9. The method of claim 1, wherein a portion or all of annual gains for the equity-indexed annuity are donated, by the donor, to a tax-exempt organization without surrender penalties.

10. The method of claim 1, wherein a portion or all of principal of the equity-indexed annuity is donated, by the donor, to a tax-exempt organization on a periodic basis.

11. The method of claim 1, wherein a portion or all of principal of the equity-indexed annuity is donated, by the donor, to a tax-exempt organization on a periodic basis without surrender penalties.

12. The method of claim 1, wherein a portion or all of principal of the equity-indexed annuity is donated, by the donor, to a tax-exempt organization.

13. The method of claim 1, wherein a portion or all of principal of the equity-indexed annuity is donated, by the donor, to a tax-exempt organization without surrender penalties.

14. The method of claim 1, wherein a contract for the equity-indexed annuity permits a penalty free withdrawal during a term of the equity-indexed annuity, and wherein a portion or all of the penalty free withdrawal is donated, by the donor, to a tax-exempt organization.

15. The method of claim 1, wherein a tax exempt organization is a beneficiary of the equity-indexed annuity.

16. The method of claim 1, further comprising:

depositing an additional premium in the equity-indexed annuity so as to generate an additional premium bonus; and

donating an additional cash donation to a tax-exempt organization, the additional cash donation being less than or equal to the additional premium bonus.

17. The method of claim 15, wherein the additional cash donation is equal to the additional premium bonus.

18. The method of claim 1, wherein the equity-indexed annuity is purchased from an insurance company, and wherein a contract for the equity-indexed annuity requires that the insurance company make a donation to a tax-exempt organization responsive to the purchase.

19. A method of funding a tax-exempt organization, comprising:

dividing an original principal sum of a donor into first and second parts;

donating the first part as a freely given, separate, and immediate cash donation to the tax-exempt organization thereby evidencing donative intent; and

using the second part as a premium deposit for purchasing an equity-indexed annuity that provides a premium bonus for the premium deposit, the second part and the first part being apportioned such that a premium bonus for the premium deposit is equal to the first part.

20. The method of claim 19, further comprising:

depositing an additional premium in the equity-indexed annuity so as to generate an additional premium bonus; and

donating an additional cash donation to a tax-exempt organization, the additional cash donation being less than or equal to the additional premium bonus.

21. The method of claim 20, wherein the additional cash donation is equal to the additional premium bonus.

22. The method of claim 19, wherein the equity-indexed annuity is purchased through an agency, and wherein a contract for the equity-indexed annuity requires a commission donation to a tax-exempt organization from part of commissions to the agency.