Articles To Give You Some Good Ideas

A Fund Raising Idea That Instantly Funds Any Special Project

In the next few minutes, you are going to learn the steps to implement a fund raising idea that can raise significant cash within a very short time frame. As opposed to simply asking donors to dig deeper into their pockets, this fund raising idea provides tax and increased income benefits to the donor. If you are involved in any facet of nonprofit fund raising, you can use this technique, for example, to buy or pay off the church organ, add another kennel at the local animal shelter or add a room on to the private school.

Three Steps to Funding Your Project

1. Select an insurance agent

This fund raising idea involves annuities; annuities can only be placed by a licensed insurance agent. I would suggest selecting an insurance agent from outside the organization. Look for agents with the CLU, ChFC or CFP professional designations.

My experience is that you are asking for trouble if you try to use an insurance agent who is on your board or active in your cause. Chances are there are several insurance agents to choose from and you don't want to hurt anyone's feelings. Resist the temptation to spread the business among several agents, as you want to keep things simple.

Having been in the insurance business for 35 years, here is my rationale: If any agent within the organization expects to earn the commissions resulting from this fund raising idea, they should have brought the concept to the organization long ago.

2. Communicate the Fund Raising Idea

Prospects for this fund raising idea are senior members of your organization support group. They should be age 70 or older. The older the donor is, the greater their benefit.

Here is a simple outline of the fund raising technique.

a. A person donates cash or a highly appreciated asset.

b. If an asset is donated, your organization sells the property and pays no tax on the sale.

c. A portion of the sale proceeds purchases a single premium immediate annuity on the life of the donor.

d. Your organization keeps the difference and can immediately fund your need.

e. The donor receives an income tax deduction, which can be spread over 6 years if necessary.

f. The donor also receives a guaranteed life income. The rate of return that the income represents is normally much greater than they have been receiving.

g. The net result is that the donor receives an income tax deduction and increased income benefits. Your nonprofit receives immediate cash.

The agent can assist with presenting this fund raising idea to your constituents. That is his or her forte. Many types of media can be used to communicate the idea; for example, a mailing, a post on your web site, a seminar, or an audio CD outlining the benefits.

3. Set Up the Simple Administrative Procedure

Mechanically, this is how the entire fund raising idea flows:

a. Your organization uses the cash or the proceeds from the donated asset to buy a single premium immediate annuity on the donor. A simple letter is usually required, signed by the donor, to establish insurable interest. A one-page agreement, which complies with the laws of your state, outlines each party's obligations.

b. Each month your organization receives a check from the insurance company for each donor.

c. Your organization could endorse these checks over to each donor or you could issues separate checks. The process is very simple. It is just a couple of new line items in your accounting system.

Summary

You may recognize this fund raising idea as a charitable gift annuity. Many national nonprofits have gift annuity programs. However, most small nonprofits do not. This is the power and simplicity of this fund raising idea. It is simple, straightforward and your organization receives funds immediately upon the completion of each transaction.

National gift annuity programs do not fund your program immediately. Furthermore, national programs do not realize any gain until the person dies and then the gain goes into their coffers, not your organization's.

If you are involved in a charter school, a church or any nonprofit, here?s how the numbers could work out.

Let's assume there are 500 supporters and this fund raising idea applies to just 2%, or ten individuals. Further, assume that the range of donations is between $10,000 and $50,000, with the average being $25,000. This would bring in $250,000. The cost of the immediate annuities will vary by age, but let's assume this cost is $125,000. That puts $125,000 in your organization's pocket.

This fund raising idea appeals to the average person. The donor benefits financially in two ways: a tax deduction and a guaranteed life income. Moreover, they get to see the end result of their gift. Your organization receives a large influx of cash quickly to fund a pressing need. This fund raising idea is a win-win for everyone.

Robert D. Cavanaugh, CLU is a 36-year financial and estate planning veteran and author of the free newsletter, "The Estate Preservation Advisor". For cutting-edge, easy-to-understand financial planning resources and techniques to increase your income, reduce taxes and preserve your estate and to claim the free video, "How to Sell Your Life Insurance Policy for More than the Cash Value", go to http://theestatepreservationadvisor.com/rd/subscribe.htm

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