In the next short while, you will learn the steps to implement a fund raising idea that can raise significant cash inside a very short time frame. Instead of simply asking donors to dig deeper into their pockets, this fund raising idea provides tax and increased income benefits to the donor. Should you be involved in any element of nonprofit fund raising, you can use this technique, for example, to buy or pay back the church organ, add another kennel at the local animal shelter or put in a room to the private school.
Three Steps to Funding Your Project
1. Select an insurance agent
This fund raising idea involves annuities; annuities can only just be placed by way of a licensed insurance agent. I will suggest selecting an insurance professional from beyond your organization. Search for agents with the CLU, ChFC or CFP professional designations.
My experience is that you will be asking for trouble in the event that you make an effort to use an insurance professional who is on your own board or active in your cause. Chances are there are various insurance agents to select from and you don’t desire to hurt anyone’s feelings. Resist the temptation to spread the business among several agents, as you want to keep things simple.
Having experienced the insurance business for 35 years, here is my rationale: If any agent within the business expects to earn the commissions caused by this fund raising idea, they should have brought the idea 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 must be age 70 or older. The older the donor is, the greater their benefit.
This 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 house and pays no tax on the sale.
c. Some of the sale proceeds purchases an individual premium immediate annuity on the life of the donor.
d. Your company keeps the difference and may immediately fund your need.
e. The donor receives money tax deduction, which may 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 web 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. instant funding prop firm ‘s their forte. Various kinds of media can be used to communicate the idea; for instance, a mailing, a post on your own internet site, a seminar, or an audio CD outlining the benefits.
3. Set Up the easy 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 get a single premium immediate annuity on the donor. A simple letter is normally required, signed by the donor, to determine insurable interest. A one-page agreement, which complies with the laws of one’s state, outlines each party’s obligations.
b. Each month your company receives a check from the insurance company for each donor.
c. Your organization could endorse these checks to each donor or you could issues separate checks. The procedure is very simple. This is a couple of new line items in your accounting system.
Summary
You might recognize this fund raising idea as a charitable gift annuity. Many national nonprofits have gift annuity programs. However, most small nonprofits usually do not. This can be a power and simplicity of this fund raising idea. It really is simple, straightforward and your organization receives funds immediately upon the completion of every transaction.
National gift annuity programs do not fund your program immediately. Furthermore, national programs do not realize any gain before person dies and the gain switches into their coffers, not your organization’s.
If you are involved with a charter school, a church or any nonprofit, here’s how the numbers can work out.
Let’s assume there are 500 supporters which fund raising idea pertains to just 2%, or ten individuals. Further, assume that the number of donations is between $10,000 and $50,000, with the common being $25,000.
This would generate $250,000. The expense of the immediate annuities will change 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 final result of their gift. Your organization receives a big influx of cash quickly to invest in a pressing need. This fund raising idea is really a win-win for everyone.