Charitable income strategy

A method for generating income by a charity comprising:

• a) borrowing a given amount of funds from a lender naming said charity as the debtor;
• b) purchasing an immediate annuity providing periodic payments to said charity with said borrowed funds, the term of the annuity being the remaining life of a selected participating member of said charity;
• c) purchasing a life insurance policy, the amount of said policy being at least equal to the amount of funds borrowed;
• and
• d) paying the premiums on said life insurance policy and the interest on the borrowed funds from payments received from said annuity, the actuarial life of the participating member being such that excess funds for use by the charity are available from annuity payments after payment of the insurance premiums and interest.

A method of generating income for a charity using a given amount of investment funds from a funds source comprising:

• a) selecting a designated individual from participating members of the charity based on the age and insurability of available participating members;
• b) determining the amount of premiums required to purchase a life insurance policy having a face value equal to the amount of said investment funds and naming the participating member as the insured;
• c) purchasing a first immediate annuity with a portion of said investment funds naming the selected participating member as the annuitant, the value of said first annuity being sufficient to pay the premiums on said life insurance policy;
• and
• d) purchasing a life insurance policy having a face value equal to the amount of said investment funds and naming the participating member as the insured;
• and
• e) using the proceeds of the life insurance policy to reimburse the funds source for said investment funds upon the death of the participating member.