Classifications

• • G—PHYSICS
  • G06—COMPUTING; CALCULATING OR COUNTING
  • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
  • G06Q40/00—Finance; Insurance; Tax strategies; Processing of corporate or income taxes
  • G06Q40/06—Asset management; Financial planning or analysis
• • G—PHYSICS
  • G06—COMPUTING; CALCULATING OR COUNTING
  • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
  • G06Q30/00—Commerce
  • G06Q30/02—Marketing; Price estimation or determination; Fundraising

Definitions

• TITLE METHOD OF CHARITABLE GIVING/INVESTING
• the present invention relates to a method of charitable giving. More specifically, the present invention relates to linking charitable giving with investing and consumer purchasing.
• a primary objective of the present invention is to provide a method of charitable investing/purchasing that will help address problems and deficiencies in the art.
• Another objective of the present invention is to provide a method of charitable investing/purchasing that will increase the amount of funds that are donated to charitable groups.
• a further objective of the present invention is to provide a method of charitable investing/purchasing that will decrease the need for governmental assistance programs.
• a still further objective of the present invention is to provide a method of charitable investing/purchasing that spawns new charitable financial instruments.
• Another objective of the invention is to provide a method of charitable investing/purchasing that is easy to implement and efficient in operation.
• a method of charitable investing/purchasing involves the use of a financial instrument or a financial account or service that normally has an embedded fee structure.
• a financial instrument is a mutual fund which typically charges an annual fee to investors for investment management and administration.
• Other examples would include unit trusts, life insurance policies, annuities, brokerage accounts, and trust accounts, among others.
• a portion would be redirected to a charitable community foundation account (a "donor advised account") over which the donor has the right to provide nonbinding instructions with respect to charitable distributions to be made from the account.
• Further steps include introducing a donor to the community foundation and this charitable giving process, and advising the donor on the financial and philanthropic benefits of this process.
• the investment advisor and the person who introduced the donor to this charitable giving/investing process would receive compensation from specified parts of the standard fee.
• a second embodiment involves a purchasing account, such as a credit card or debit card account.
• a purchasing account such as a credit card or debit card account.
• the difference between what the consumer pays for purchases and what the credit/debit card company pays the merchant represents a fee paid to the card issuer.
• Part of the fee from this specially structured credit/debit card would be given to a charitable community foundation donor advised account.
• Other parts of the fee would be used to compensate the consumer's investment advisor, if any, and to compensate the charitable liaison.
• the account could be a brokerage account, or any other account or financial service to which a fee is applied.
• Part of the fee is given to charity.
• Other parts of the fee can be used to compensate the donor's investment advisor and the charitable liaison.
• Figure 1 is a flowchart of a preferred method of charitable investing/purchasing according to the present invention.
• Figure 2 is a block diagram of the fee structure that is utilized with the preferred method (mutual fund).
• Figure 3 is another block diagram of the fee structure utilized with the preferred method (insurance/annuity product).
• Figure 4 is a flowchart of a second method of charitable investing/purchasing according to the present invention.
• Figure 5 is a block diagram of the fee structure that is used with the second method.
• FIG. 1 A preferred method of charitable investing/purchasing is schematically shown in Figure 1.
• the preferred method consists of six steps.
• the first step in the process is the establishment of a charitable community foundation, known as the "Foundation for Giving.”
• donor advised accounts are established. These donor advised accounts are the recipients of donated funds.
• the Foundation for Giving controls how the donated funds are disbursed from the donor advised accounts.
• the Foundation for Giving is a tax exempt charitable organization, as defined in the Internal Revenue Code.
• the second step in the preferred method is the creation of a fee structure to be applied to a financial instrument or account wherein part of the fee is sent to the investor's donor advised account within the Foundation for Giving.
• the fee shall be expressed as an annual percentage (for example, 1.85%) of the value of the underlying instrument or account.
• the annual fee will equal the product of the percentage (1.85%) multiplied by the value of the mutual fund at the time the fee is assessed.
• the dissection of this fee is shown in Figure 2.
• the mutual fund with this type of fee structure is referred to as a "charitable giving mutual fund.”
• the various recipients of the fee dissection in Figure 2 will be discussed later.
• the fee is no greater than the fee usually charged for similar investments.
• the charitable liaison After the mutual fund has been established, potential donors are introduced to the idea of making charitable gifts through mutual fund investing.
• the individual or entity that introduces potential donors to the idea of giving through this charitable mutual fund is referred to as a charitable liaison.
• donors can be introduced to this charitable giving/investing process.
• the charitable liaison would be an individual or an organization that promotes planned giving to its constituent base. The individual or organization would not be involved in giving investment advice.
• the charitable liaison will be a charity or an individual affiliated with a charity.
• the charitable liaison would not give the donor investment advice, but merely educate the donor on the merits of this charitable giving/investing process.
• the donor's investment advisor could serve as a charitable liaison.
• the investment advisor educates the donor on the societal importance of charitable giving and also gives the donor advice on asset allocation. Regardless of who serves as a charitable liaison, that person would receive compensation for the donors introduced by him/her who elect to participate in this charitable giving/investing process.
• the fourth step of the preferred method consists of advising potential donors on asset allocation. This role is usually played by the donor's professional investment advisor.
• the investment advisor helps the donor decide where to allocate the donor's money amongst stocks, bonds, and various other financial investments.
• the fifth step in the preferred method consists of the donor investing in the charitable giving mutual fund or other financial instrument utilizing this charitable giving/investing process. After the donor makes an investment, the percentage fee (1.85%) is charged to the investment on a systematic basis.
• the final step in the preferred embodiment consists of dissecting the percentage fee (1.85%) among various individuals and entities. For example, the donor's advised account with the Foundation for Giving receives 0.5%; the charitable liaison receives 0.6%; the donor's investment advisor receives 0.5%; and the entity which manages the mutual fund or other investment advisor receives 0.25%.
• the donor's investment advisor or the. mutual fund company will keep records regarding the identity of the charitable liaisons. These records will help ensure that the charitable liaisons are compensated for their efforts out of the fees.
• the Giving Group A second entity, called "The Giving Group," has also been formed.
• the Giving Group will educate people on the merits of this charitable giving/investing process and will encourage participation in this process.
• the Giving Group will coordinate the activities of the independent charitable liaisons and will itself be a charitable liaison.
• the fee dissection ( Figure 2) will vary depending on how and by whom the various functions are performed. For example, a charitable organization, such as a church, might want to inform its constituent base about this charitable giving/investing process. In this case, the charitable organization itself would receive the 0.6% charitable liaison portion of the fee.
• the charitable organization might not have the ability to provide information to its constituent base about this charitable giving/investment process. In that situation, the charitable organization could utilize the resources of The Giving Group to provide this information. In this case, the charitable organization and The Giving Group would divide the 0.6% charitable liaison fee.
• a third possibility as a charitable liaison is the donor's investment advisor.
• the investment advisor gives advice as to asset allocation and also introduces the donor to this charitable giving/investing process.
• the investment advisor receives both the advisor part of the fee and the charitable liaison portion.
• FIG. 4 A second method of charitable giving/investing is shown in Figure 4.
• This embodiment involves the use of a credit card, debit card, or other similar payment device.
• the credit/debit card company does not pay the vendor $1 for every $1 charged by the credit/debit card user.
• the credit/debit card company pays the vendor 96 for every $1 charged.
• the 4 ⁇ difference represents a fee charged by the credit/debit card company.
• the credit/debit card company usually devotes a part of the fee to promotional giveaways such as airplane tickets or magazine subscriptions. These promotions are designed to attract new customers and retain existing ones. Usually, about 1.6 ⁇ out of the 4 ⁇ is spent on these promotional giveaways.
• the portion of the fee (for example, 1.6 ⁇ ) is not used for promotional giveaways.
• the money is used for this charitable giving/investing.
• O. ⁇ out of every dollar that is charged by the consumer is put into the consumer's donor advised account within the Foundation for Giving; 0.6 ⁇ is also paid to the charitable liaison who introduced the donor to this charitable giving/investing; and O. ⁇ is paid to the donor's investment advisor.
• the portion of the fee that is used for this charitable giving/investing process is no less than the amount normally spent on promotions, such that the net profit to the credit/debit card issuer neither increases nor decreases.
• the method of this charitable giving/investing can be used with other types of investments and different types of accounts.
• a brokerage account that charges a fee to the account could dissect the fee so that part of it is given to a donor advised account. Other parts of the fee would be used to compensate the donor's broker, the donor's investment advisor, and the charitable liaison.
• the brokerage account may be managed by someone other than the donor. In that context, part of the fee would also be used to compensate the account money manager. If the donor manages his own account, the management portion of the fee would be eliminated.
• the method of this charitable giving/investing could also be used with a brokerage account that charges a commission rather than a fee. Instead of dissecting a fee, the commission is dissected. Parts of the commission would be used to compensate various individuals in the same manner discussed in the preceding paragraph.
• the method of this charitable giving/investing can also be applied to trusts or IRAs. Any account that charges a fee could dissect the fee so that part of it is automatically given to a donor advised account within a community foundation. The type of account is not a limiting factor. The key point is that part of the fee is guaranteed to be given to the donor advised community foundation account in a systematic manner.
• the method of this charitable giving/investing can also be applied to investments such as life insurance and annuities. (Fig. 3). In this context, part of the fees usually deducted from the earnings on the cash value build up of the life insurance policy or the amount invested in an annuity policy would be sent to the policyholder's donor advised community foundation account. In the box labeled "insurance costs/ M and E" in Fig. 3, "M and E” is an abbreviation for mortality and expense charge.
• Much of the method of charitable giving/investing will be implemented through the Internet. For example, profiling of donors can be done over the Internet. A potential donor is asked a series of questions to enable the investment advisor to give advice based on the responses. The donor can also be introduced to this charitable giving/investing over the Internet. The donor can also use the Internet to invest in the charitable giving mutual fund or other charitable giving investments. The donor can access both his/her charitable giving investment accounts and his/her donor advised account with the Foundation for Giving account to see the performance of these accounts. It is believed that the donor will be able to take a tax deduction for the part of the fee that is given to the Foundation for Giving, and also for the part of the fee that is paid to the charitable liaison, when the charitable liaison is a charity.

Applications Claiming Priority (1)

Publications (2)

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Family Applications (1)

Country Status (5)

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Citations (3)

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• 2002
  • 2002-04-04 JP JP2003582690A patent/JP2005521972A/ja active Pending
  • 2002-04-04 AU AU2002247480A patent/AU2002247480B2/en not_active Ceased
  • 2002-04-04 EP EP02715276A patent/EP1490806A4/de not_active Withdrawn
  • 2002-04-04 IL IL16440302A patent/IL164403A0/xx unknown
  • 2002-04-04 CA CA002481359A patent/CA2481359A1/en not_active Abandoned

Patent Citations (3)

Non-Patent Citations (1)

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