METHOD FOR ENDOWING A TAX EXEMPT ORGANIZATION USING A KEY MEMBER AND WHILE INCREASING NET WORTH OF A DONOR

• US 20060206417A1
• Filed: 05/24/2006
• Published: 09/14/2006
• Est. Priority Date: 01/07/2004
• Status: Abandoned Application

• Current Assignee: Social Capital Insurance Services Incorporated
• Original Assignee: Social Capital Insurance Services Incorporated
• Inventors: Selby, John H.
• Application Number:
  US11/420,212
• Publication Number:
  US 20060206417A1
• Time in Patent Office: Days
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/207 Tax processing
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method for establishing a contractually guaranteed and lucrative endowment fundraising program. The program utilizes a third party lender, such as a bank, that finances a premium for a life insurance policy. The life insurance policy is owned by the tax-exempt organization for the life of a key person of the tax-exempt corporation. Interest on the loan for the life insurance policy is paid by assets of the tax-exempt organization, and may be paid, for example, by yearly donations by the key member for which the policy is taken, to the general account, or by others. Collateral for the loan may be a combination of the cash surrender value of the life insurance policy and a deposit of assets of the tax-exempt organization with the bank. The deposit may be, for example, an investment management account opened with the bank.

Claims

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

the tax-exempt organization procuring a loan from a lender;

the tax-exempt organization utilizing the loan to finance a premium for a life insurance policy on the life of a key member of the tax-exempt organization, the life insurance policy to be owned by the tax-exempt organization;

a donor;

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; and

the tax-exempt organization utilizing revenue from the equity-indexed annuity to make payments on the loan.

2. The method of claim 1, wherein the donor is the key member.