An Easy Way To Raise Public Money

DO YOU BELONG TO A RELIGIOUS ORGANIZATION of any kind that needs money? If you do, and the organization has a nonprofit status, you can:

1. Raise money for the organization by selling bonds to members of the congregation and others

2. Using "exempt securities" which are not regulated by the US Securities and Exchange Commission (SEC)

3. Offering high interrest rates to buyers of the bonds to encourage them to buy the bonds

4. Being able to advertise the availability of the bonds in local newspaper and magazines, if you wish



IF YOU DON'T WANT TO SELL BONDS YOURSELF, you hire one of the 20 or so national finance companies specializing in church bonds. The typical fee charged by such firms can run 7,5% of the amount raised. For this:

1. The finance company will prepare the business plan (called a "prospectuse") describing the offer, detailing how much money is neede, the purpose(s) for which it will be used, and how the money will be repaid to the bondholders

2. The finance company will hold public meetings for the members of the religious organization at which the offering will be described and quetions answered

3. The finance company will place ads in suitable media (nespapers, magazines, etc.) to sell the bonds to the general public

4. The finance company will receive $75,000 for this work if it raises $1,000,000 for the religious group, leaving the group $925,000 for itself



THE MONEY RECEIVED BY THE RELIGIOUS ORGANIZATION from the bond sale is nontaxable to the organization. Typical interest rates offered by exempt-securities can run up to 10%, depending on the demand for such bonds. The money received by a religious organization (or other nonprofit) can be used for:

*Construction of new buildings, facilities, etc.

*Pay off earlier debts incurred for the organization

*Reimburse the finance company that raised the money

*Pay current expenses, such as salaries, rent, etc.



BOND PRICES CAN RANGE from $250 to $500 or $1000 each. Such bonds can mature--that is--be paid off in 3 years, 5 years, 10 years, or 15 years. Meanwhile, the bonds pay interest to their owners twice a year. The regular income of the religious organization or nonprofit pays the interest expense. This interest is taxable to the bondholder.