provides tax deduction for donation pays investor dividends if
profitable per best terms offered The Old Philanthropy Charitable
Giving Model The Old Risk Investment Model Investor Makes risk
investment Charity uses assets to further its mission makes
charitable donation Donor with cash or other assets Confidential
Patent Pending Copyright 2010 iCRROD, LLC Slide 2 Introducing
Insurance-Linked (securitization) NIMCRUT (Net Income with Makeup
Charitable Remainder Unitrust) with Return on Donation - iCRROD or
herein CRD What if you could make a income tax deductable donation
to a charitable trust, then direct a portion of the funds to be
invested in worthy businesses of your choosing, and also receive a
positive IRR and the realistic potential of a double- digit IRR
& a 5+X ROI from that charitable donation? Additionally, upon
your death, your beneficiaries or a designated charity receive
tax-free income twice that of the original donation. Confidential
Patent Pending Copyright 2010 iCRROD, LLC Slide 3 The New
Philanthropy Investment Platform Insurance-Linked Net Income with
Makeup Charitable Remainder Unitrust (NIMCRUT) providing a
securitized Return on Donation - iCRROD Confidential Patent Pending
Copyright 2010 iCRROD, LLC Slide 4 CHARITY CHARITY Receives any
assets remaining in trust when the Donor is deceased Balance of
Trust CRD Invests $50K in ILS CRD Invests $50K into Businesses 1
This deduction may have to be spread over more than one year, if it
exceeds certain percentage of income limitations. Receives 5% to
50% of Value Annually 3 Returns 100% 2 Pays Dividends = to % of
Gross Revs. Deductable Donation $100K DONOR/Trustee Transfers cash
or Assets to CRD Receives income tax deduction 1 Receives 5% to 50%
Annual payout from CRD current value 3 CRD Trustee receives cash
and/or assets (sells) & re-invests 50% in Business & 50% in
ILS Trustee pays out 5% to 50% of CRD value each year to Donor
BUSINESSES Ventures of Choice Insurance- Linked Securitization
Products (ILS) 2 Protects corpus of original donation &
guarantees required payouts 3 Can be a credit income to
beneficiary, if a deficiency exists to pay the minimum, to be made
up in later years Net Income with Makeup (NIM) Confidential Patent
Pending Copyright 2010 iCRROD, LLC Slide 5 BUSINESS Venture
Enterprises NewCoLLCFormedNewCoLLCFormed Advance d NIMCRUT Design
Advance d NIMCRUT Design Payout Donate Private Placement Offering
Private Invests Qual. Accredited Investor Invests Returns %
Dividends Returns 100% of Donations CHARITY CHARITY Receives
balance of assets in trust when Donor is deceased or end of trust
term End of Term Donation Confidential Patent Pending Copyright
2010 iCRROD, LLC Slide 6 NewCo LLC Donor & Income Beneficiary
Incorporate LLC Entity Draft Operating Agreement Draft Reg. D 506
PPM Securities Compliance Corporate Admin Compliance Business
Enterprise Draft Reg. D 506 PPM Securities Compliance Royalty
Accounting Third Party Providers, Advisors & Managers ILS
Professional Manager of ILS Source/Manage Portfolio (acquisition,
structuring, execution, administration & ongoing management)
Reserve Account Admin Asset Value Protection NIMCRUT Donor Trustee
(Fiduciary decision-making, investment management, CRD
administration, tax matters) & communications Draft NIMCRUT
Trust Charitable Beneficiary Coordinate the Charitable Beneficiary
Transfer of remaining CRD balance upon Donor death or CRD
termination Confidential Patent Pending Copyright 2010 iCRROD, LLC
iCRROD, LLC Slide 7 Beneficial Interest Transferred Into CRD
Re-Insurance Guarantee to Pay 100% of Life Insurance Benefits in
10-Year Term Secures Required Portfolio of Benficial Interest in
Death Benefit of Life Ins. Policies of People 70+ Years Old
Portfolio of Senior Life Insurance Policies Which Transfer
Beneficiary Interest to NIMCRUT NIMCRUTNIMCRUT Confidential Patent
Pending Copyright 2010 iCRROD, LLC Slide 8 Insured Dies 1 Yr
$750,000 $250,000 $1,000,000$500,000 Insured Dies 18 Months Initial
Donation $ -5,000,000 At End of Term Re-insurance Pays all Policies
that have not Matured 100% Guaranteed As Insured's Die Policies Pay
to Beneficiary CRD Increasing Return Balance $1,000,000* $
1,000,000 $500,000* $ 1,500,000NIMCRUT $3,500,000* $ 5,000,000 *
Less premiums & administrative fees to manage and maintain
ILS,s ILS Re- Insurance Confidential Patent Pending Copyright 2010
iCRROD, LLC Slide 9 Donor Immediate Income Tax Deduction for
Donation 50% of Donation goes to invest in donor selected
businesses and ventures 100% of Donation is securitized &
returns are directed to the CRD and passed on to Charity and become
income back to Donor Potential of life-long annual income stream
& Attractive IRR & ROI NIMCRUT Has a re-insured guarantee
(via ILS) to protect corpus of CRD & payouts to donor &
charity. As policies mature, a large % goes back into the CRD &
a portion goes to a maintenance side account. Funds continue to
accumulate and grow through- out the life of the CRD from % of
annual Gross Revenues designated from Business (as a pro-rata % of
investment) Businesses of Choice Receives 50% of a Donors
contribution to the CRD Businesses pay CRD agreed % of annual Gross
Revenues, which grows tax free and pays income to Donor No equity
or debt obligation incurred, just Royalty Agreement to CRD Charity
&/or Other Beneficiary(s) Guaranteed (reinsured) donation of
any remaining accumulation from the Revenue Sharing, ILS and any
balance of the original donation upon the maturity of the CRD or
upon the early death of the donor Allows future contributions of
cash or assets Allows deferral of required payouts if ILS and/ or
Business contributions are less than enough to pay the minimum
payout of CRD annual value Is able to direct remainder income to
charity & beneficiaries of choice May benefit from additional
investments as Donors have the flexibility to contribute future
cash or assets which CRD could re- invest Confidential Patent
Pending Copyright 2010 iCRROD, LLC Slide 10 Q. Would investment in
a Business create UBTI to the CRD? A. The Business would be taxable
on its own income. Dividends paid by Business, however, would not
be unrelated business income to the CRD by virtue of 512(b)(1) of
the Internal Revenue Code. (see next slide for specific code
language). Q. What are the Tax ramifications on CRD distributions?
A. Distributions from unitrusts are first ordinary income, then
capital gain, then tax-free income and finally corpus. Q. How are
the premium payments and administrative fees on the ILS paid? A. If
Life Settlement maturity occurs during the term, these costs are
covered out of the maturity, if not, the costs become the
obligation of the CRUT (first) then Donor, or a LS is sold short or
term. Q. With multiple CRD Donors, how does the Business determine
the payout to each CRD? A. The total Royalty percentage is backed
into from the pro forma financials and/or existing financials of
the business. The business determines how much capitalization is
required and what percentage of their gross revenues they are
willing to pay out for that investment. That percent is then
extrapolated into a percentage per thousand (or ten-thousand, etc.)
of the whole of the capitalization required. This then becomes the
Royalty percentage per thousand for each CRD investor. Q. How can a
ILS be created for small CRD investments? A. Each CRD will be a
Sub-Trust under a Master Trust which holds a large portfolio of
life settlements each CRD then becomes a pro-rata owner/beneficiary
of the Master Trust assets. Confidential Patent Pending Copyright
2010 iCRROD, LLC Slide 11 A fundamental principle of a NIMCRUT
design is to take full advantage of the opportunity to write your
own accounting rules into the trust document, to achieve the
donor's planning objectives, and to build flexibility into the
investment and administration of the trust. See Advanced NIMCRUT
Design for further details (see section on treatment of Zero Coupon
Bonds which would also apply to a ILS).Advanced NIMCRUT Design
Section 512(b)(1) of the Code Generally Applicable Exemptions. The
following are generally applicable exemptions to UBTI treatment. a.
Passive Investment Income. Passive investment income is not UBTI
unless it is derived from a leveraged investment or a controlled
entity. 512(b). Passive investment income includes: i. Interest,
dividends, and annuities. 512(b)(1). iii. Royalties. 512(b)(2). Per
the following Gift Law ruling, a CRD can freely invest in a
for-profit Business without creating UBTI, if the rules are
followed. This ruling sets precedent for the CRD to directly invest
into, start-ups & be a shareholder in a for-profit entity and
have dividends paid back to it without incurring a UBTI event.
http://www.aarpgift.org/giftlaw/glawpro_plr.jsp?WebID=GL2002-0431&ID=200252096.
However, the CRD investment in a for-profit company may fall under
SEC rules requiring it to qualify as an Accredited Investor. This
can be accomplished easily enough as the CRD can be carefully
structured similar to a charitable remainder mutual fund with
multiple donors in order to qualify for the $5M in total assets
required, and/or under a Reg. D exempt PPM, up to 35 non-accredited
investors would be allowed. The Donor can also be a corporation,
partnership or limited liability company formed of multiple people
to meet the $5M minimum of assets required.
http://www.aarpgift.org/giftlaw/glawpro_plr.jsp?WebID=GL2002-0431&ID=200252096
Confidential Patent Pending Copyright 2010 iCRROD, LLC Slide 12
Slide 13 The New Philanthropy Investment Platform Insurance-Linked
Net Income with Makeup Charitable Remainder Unitrust (NIMCRUT)
providing a securitized Return on Donation - iCRROD
