How You Can Give $1million to Charity

March 19, 2014
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What are the best ways to give money to charity? Here are a few options:

Sell your share in a business.

Rohini Nilekani, wife of Infosys founder Nandan Nilekani, just sold some of the shares she owns in that company. She intends to use the proceeds from the sale (worth $27 million pre-tax) to fund charities in the areas of water, education, environment and governance.

Set up a private equity fund.

Tim Gocher set up a private equity fund for Nepal. It is an “impact fund” with the goal of creating wealth, creating jobs, and creating a better life for residents.

Buy life insurance.

Life insurance can turn a small premium into a large benefit for the charity of your choice. You don’t have to sell any property or start your own investment fund. You simply buy a policy and make the proper arrangements.

To give you an idea of how economical this gift can be, here is some sample pricing. All rates are for $1 million of universal life guaranteed to age 100. The rate class is preferred nonsmoker.

Male age 40, preferred nonsmoker rate: approx $6000/year for $1million guaranteed to age 100.

Female age 40, preferred nonsmoker rate: approx $5000/year for $1million guaranteed to age 100.

Male age 50, preferred nonsmoker rate: approx $8200/year for $1million guaranteed to age 100.

Female age 50, preferred nonsmoker rate: approx $7200/year for $1million guaranteed to age 100.

Male age 60, preferred nonsmoker rate: approx $15,500/year for $1million guaranteed to age 100.

Female age 60, preferred nonsmoker rate: approx $12,500/year for $1million guaranteed to age 100. 

Can you think of any other financial instrument that can give such a benefit for pennies on the dollar – on a guaranteed basis?