AVI CHAI concluded its general grant making on December 31, 2019.

Life Insurance: Potent Tool for Day School Finance

Posted by: dperla

June 3, 2013

This article is cross-posted from Ravsak’s HaYidiyon.
A donor gift of a permanent life insurance policy can help provide long term support for non-profit institutions such as day schools. Despite the long term benefits of such policies, few of the more than 300+ day schools that I interact with have secured donor gifts of life insurance. While schools clearly prefer a cash gift today over a legacy gift tomorrow, donor-gifted life policies can nonetheless provide much needed, long term financial support for day schools.
This article explores and critiques two new insurance-related ideas that have been proffered by members of the Jewish community.  It also offers for consideration two modified approaches to securing donor-gifted polices. The first approach which I discuss involves the use of matching premium programs. Under these programs, non-profits essentially agree to co-invest in a life policy with a donor in order to induce the gift. The second approach which I discuss is a premium finance program which is under development. Under the program, banks would offer wealthy individuals a loan to cover the cost of life insurance premiums during the insured’s lifetime. The program takes advantage of the wide differential between the loan rate and the expected investment returns of the policy.
Read the whole article.
I hope you find the ideas explored in the article of interest. Feel free to call or write with any questions or comments.
Daniel Perla is program officer, day school finance, for The AVI CHAI Foundation

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