$1 Trillion to Charities — CREDIT FUNDING
How would you fund $1 Trillion to charities?
[Hint: This is not a fantasy question].
$1 Trillion to Charities – CREDIT FUNDING
Create charity funding without $1 donated or given away!
Let’s double Habitat for Humanity’s (H4H) $240 Million operating budget. They build low-income housing, and then sell homes at around 50% of the fair market value to qualifying low-income earners who can afford a reduced mortgage.
Let’s suppose, three major corporations who want to increase sales of their home building products decide to help H4H double their operations.
Weyerhaeuser: forest products
Lowes: building supplies superstores
Honeywell: integrated systems
These companies have $billions in cash on hand and in securities. Anything that creates jobs and strengthens the economy eventually increases their profits.
Instead of asking them for a donation (they all contribute generously to diverse charities) let’s change the formula. Let’s ask them to keep their money!
We want them each to buy a 3-year Certificate of Deposit for $80 million dollars, and pledge that CD as a collateral guarantee, so banks loan H4H cash equal to the CDs. H4H receives $240 million in funding—doubling their current net operating budget.
H4H would have to raise $300+ million to net $240 million due to expensive fund raising costs. THAT is a lot of money to ask people to just give away.
Why would the corporations do this?
The most each could ever lose is $4 million.
H4H goes to Warren Buffet’s Berkshire Hathaway Special Insurance Group and buys two policies; a Completion Bond—that H4H will build the appropriate number of houses (like it has for decades) and a Stop Loss Assurance Policy— which guarantees the Corporations that the most they can lose of the face value of the CD is 5% or $4,000,000.
The combined cost for both policies would be about 4% of funding. In other words, the total fund raising costs would be 75% less than normal.
After two years, qualified low-income families buy H4H built homes with new affordable mortgages. All the purchase funds from the mortgages go directly into a “lock box,” so that all three loans are paid off equally. $240 million in loans plus interest are paid back. The CDs are released from being pledged, and the cycle is complete. Ready to do again, and again.
The CDs can also come from publicly traded Master Limited Partnerships dedicated to buy CDs and fund charities through Credit Funding Loans.
This works for a broad spectrum of charities and other projects. Credit Funding could fund the following:
$100 Billion: Low Income Housing
$200 Billion: Micro Finance – small loans to women
$300 Billion: Job / Education Training
$400 Billion Urban & Infrastructure Renewal & Smart Energy Grid
Without $1.00 Given Away or Donated
© Copyright 2015 Neal H. Katz
2016 Winner of three Gold Medals: IBPA Ben Franklin, Bill Fisher Award for Best First Book by a Publisher, the IPPY Award for Best Historical Fiction, and Gold Medal for Historical Fiction/Personage by Reader's Favorite. Other Awards: Finalist in the Historical Fiction category of the 2016 Next Generation Indie Book Awards, Second Place winner of the IndieReader Discovery Award for Best Fiction, Best New Fiction in the International Book Awards for 2016, Finalist in two categories Independent Author Network Book of the Year, Chantecleer Goethe Award Finalist, Shelf Unbound Notable 100, and one of IndieReader's Best Books of 2016.