INdirect Tax-efficient Equity Financing:
A new source of capital for 501(c)3 public charities
INdirect
Tax-efficient Equity Financing
The innovative INTEF structure creates a financial instrument that for the first time allows equity investors to provide capital to nonprofit organizations. The result is a financial windfall for participating charities.
INdirect Tax-efficient Equity Financing:
Core Features & Benefits
MARKET RETURNS
INTEF Capital is built around a new and innovative financing structure that promises to raise significant amounts of capital from domestic investors and put it into the hands of 501(c)(3) public charities. More precisely, the Structure acts like a tax ‘wrapper’ that can be used with any number of underlying equity investments, including widely-held products like S&P 500 stocks.
In so doing the Structure will be able to generate millions of dollars for participating charities while also providing individuals with a market return or better on their investment, a combination long sought in the nonprofit finance sector.
CHARITABLE IMPACT
INTEF’s ability to combine philanthropy with market-rate investment returns is the first of its kind. Consider the impact of an S&P 500 index fund that delivers the same after-tax return as a traditional fund while also handing over 30% or more of its invested capital to charity free and clear.
This represents a tremendous charitable ‘punch’ that investors can deliver just by making some of their normal portfolio allocations via a fund that utilizes the Structure, not as a replacement for bespoke giving to individual charities but as a much larger adjunct to it.
TAX HEDGE VALUE
Finally, the Structure also acts as a natural hedge against future tax increases on both ordinary and preferential income, making it especially attractive to HNW and UHNW investors and other top-bracket individuals, particularly those who hold low-basis stock or other capital gain property.
INTEF Capital will soon begin contacting private banks, brokerages and wealth management firms to introduce the concept, provide documentation and obtain market feedback.
ADDITIONAL MATERIALS
INTEF Capital has assembled a number of PDF documents that summarize the Structure’s purpose and utility at a high level for both investors and the firms they work with. Supporting materials suitable for due diligence review have also been drafted and will soon be available under nondisclosure to interested parties.