new philanthropy investment platform

pays investor dividends if profitable

per best terms offered

The Old “Risk” Investment ModelInvestor

Makes “risk” investment

Business/Venture

Business Enterprises

Confidential Patent Pending Copyright 2009 Venture Funding Advisors, LLC

provides taxdeduction for donation

The Old Philanthropy Charitable Giving Model

Charityuses assets to

further its missionmakes charitable

donation

Donorwith cash or other assets

IntroducingInsurance-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 and 1-5X 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.


The New Philanthropy Investment PlatformInsurance-Linked Charitable Remainder “Return on Donation” - iCRROD™

The New Philanthropy Investment PlatformInsurance-Linked Net Income with Makeup Charitable Remainder Unitrust

(NIMCRUT) providing a securitized “Return on Donation” - iCRROD™ Confidential Patent Pending Copyright 2009 Venture Funding Advisors, LLC

CHARITYReceives any

assets remaining in trust when the

Donor is deceased

Bala

nce

of Tr

ust

CRD

Inve

sts $

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.

Securitized NIMCRUT “iCRROD™” (CRD)Receives 5% to 50% of Value

Annually3

Retu

rns 1

00%

2

Pays Dividends = to % of Gross

Revs.

Deductable Donation $100K

DONOR/Trustee Transfers cash or Assets to CRD Receives income taxdeduction1 Receives 5% to 50%Annual payout fromCRD current value3

CRD Trustee receives cashand/or assets (sells)& re-invests 50% inBusiness & 50% in ILS Trustee pays out 5% to 50% of CRD valueeach year to Donor

BUSINESSESVentures

ofChoice

Insurance-Linked

Securitization Products

(ILS)

2 Protects corpus of original donation & guarantees required payouts3 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)


BUSINESS

VentureEnterprises

NewCoLLC

Formed

iCRROD™ Flow Chart

Advanced

NIMCRUTDesign

Payout

Donate

Donate

PrivatePlacemen

tOffering

ILS

Invests

Qua

l. A

ccre

dite

d In

vest

or

Inve

sts

Retu

rns %

Divi

dend

sReturns 100% of

Donations

CHARITYReceives balance of assets in trust when Donor is

deceased or end of trust term

End of Term Donation


Governance, Construction, Supporting DocumentsOrganizational Chart

NewCo LLC Donor& Income Beneficiary

Incorporate LLC EntityDraft Operating Agreement

Draft Reg. D 506 PPMSecurities Compliance

Corporate Admin Compliance

Business Enterprise

Draft Reg. D 506 PPMSecurities Compliance

Royalty Accounting

Third Party Providers, Advisors & Managers


ILS

Professional Manager of ILSSource/Manage Portfolio

(acquisition, structuring, execution, administration & ongoing management)Reserve Account AdminAsset Value Protection

NIMCRUT

Donor Trustee(Fiduciary decision-making, investment management,

CRD administration, tax matters) &

communicationsDraft NIMCRUT Trust

CharitableBeneficiary

Coordinate the Charitable Beneficiary Transfer

of remaining CRD balance upon Donor death or CRD termination

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

What is a Insurance- Linked Securitization (ILS)

Portfolio of Senior Life Insurance Policies Which Transfer Beneficiary Interest to NIMCRUT

NIMCRUT


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* $ 1,500,000

NIMCRUT

$3,500,000* $ 5,000,000

ILS Return on Donation


* Less premiums & administrative fees to manage and maintain ILS,s

ILS

Re-Insurance

Benefits & Features

Donor Immediate Income Tax Deduction for Donation 50% of Donation goes to invest in donorselected businesses and ventures 100% of Donation is securitized & returns aredirected to the CRD and passed on to Charityand 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. Aspolicies 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 GrossRevenues designated from Business (as a pro-rata %of investment)

Businesses of Choice Receives 50% of a Donors contribution tothe CRD

Businesses pay CRD agreed % of annual Gross Revenues, which grows tax free and paysincome to Donor

No equity or debt obligation incurred, just Royalty Agreement to CRD

Charity &/or Other Beneficiary(s) Guaranteed (reinsured) donation of anyremaining accumulation from the RevenueSharing, ILS and any balance of the originaldonation upon the maturity of the CRD orupon 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 enoughto 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 contributefuture cash or assets which CRD could re-invest

Q & A

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.

Key Functional & Regulatory Information

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).

Section 512(b)(1) of the Code Generally Applicable Exemptions. The following are generally applicableexemptions 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.pgdc.com/pgdc/article/2001/02/advanced-nimcrut-design

http://www.aarpgift.org/giftlaw/glawpro_plr.jsp?WebID=GL2002-0431&ID=200252096

Pro forma Returns for Donor(s)


Contact:James R (Jim) Nash

Venture Funding Advisors, LLCLaguna Niguel, CA

jrnash@VFundAdvisors.comwww.VFundAdvisors.comwww.iCapVentures.com

(949) 485-5252


The New Philanthropy Investment PlatformInsurance-Linked Net Income with Makeup Charitable Remainder Unitrust

(NIMCRUT) providing a securitized “Return on Donation” - iCRROD™

mailto:[email protected]

http://www.VFundAdvisors.com/

http://www.iCapVentures.com/