Fantastic news! Miriam Bergen, former owner and president of Appleton Holdings, gave 100 percent of Appleton’s shares, valued at about $500 million, in her will to the Winnipeg Foundation. Miriam’s legacy gift is the largest any individual has ever made to a Canadian charity.[i] The foundation announced the donation on Giving Tuesday, Nov 29, 2022, a day dedicated to encouraging people to give and to act generously.
You could do this too! All you need to do is have a small amount of seed money compound for a very long time. After you pass away, you have unlimited available time, so why not put it to use?
As these blogs advocate, anyone can give $500 Million and much more using our Funds Generator (when built one fine day). In combination with many others, we can build an abundant future for our society. This article will explain how.
I call this Funds Generator proposal "Bensway" in honour of Ben Franklin, who inspired this via his great experiment after he passed away. Franklin set up a microlending business with a contribution from his estate designed to last 200 years. Read the whole story as a gift when you sign up for my monthly article here.
Funds generators grow donations for decades and centuries, earning unlimited money via compounding. The multiplying effect of compounding takes a very long time, but if grown sufficiently, eventually the same large gift can be done repeatedly every 25 years.
How big could this proposed new giving become for charity? Billions and trillions in today's dollars are possible, all via the power of compounding over time. Trillions are certainly possible collectively. At a time when the very largest of donations are measured in hundreds of millions, your personal billion-dollar donation would be groundbreaking.
As an individual, here is an estimate of your potential:
Say you were thinking of making a gift of $100,000 in your will. That would be fantastic. If you choose, you could set aside $10,000 of that $100,000 for your 'Personal Heritage Fund' (PHF) to put into the Funds Generator.
Charities get the $90,000 immediately (90%) of your total gift, which balances charities' need for money now against the $10,000 put forward to change our future dramatically. Charities will receive money every 25 years from the ongoing growth of your initial seed fund contribution.
For this example, we will aim for a repeating donation of $1 Billion every 25 years. Here is how that could happen:
The $10,000 is invested in standard Stock market index funds and multiplies in constant dollars by 3.61 times every 25 years on average (based on our estimated 5.27% long-term growth rate). After 25 years, half of the entire fund is given to charities to assist the current needs of the day, and half remains invested for the future.
In this example, this 50/50 split is used until the $ 1 Billion level is reached, at which point about 70% of the fund total is given at each anniversary. While growing to the $1 Billion level, giving half at each 25-year anniversary would be intergenerationally fair: half is for now, and half continues for all the generations that follow.
After the first 25 years, Table 1 - PHF Growth Estimates below shows the gifts at payout dates. The charity's first gift at year 25 would be $18,050, way more than the original $10,000 contributed. Gifting from then on would be 'playing with house money' as your original total gift has now been received.
Table 1 shows the average gift after every 25 years. Returns are, however, subject to market volatility (discussed here). But over 100 years and more, average estimates are the most reliable prediction - which is what is shown.
In the year 100, the seed fund donates $106,147, bringing the total cumulative donation to $215,585, more than double the original $100,000 entire donation. The program is paying off!
In the year 200, the seed fund will give $1,126,724. The cumulative 200-year gift level of $2,503,959 includes gifts from years 125, 150 and 175, not shown in the table for brevity.
Similarly, Years 300 and 400 give $11.9 and $126.9 Million, respectively. In Year 475, we reach a re-investment level large enough to begin generating a billion dollars every 25 years. The first billion-dollar donation occurs in Year 475 and every 25 years thereafter.
By the year 500, the cumulative gift reaches $3 Billion, and by the year 1000, $20 Billion. By the year 2000, the gift has grown to $60 Billion. For every millennium thereafter, another $40 Billion is added. Your eventual gift could surpass some of today’s largest donors worldwide.
As an individual, how much should you give?
How much should you contribute to your personal heritage fund? The answer: give what you like, but know that the more you give, the earlier big money could come into the charities of your choice. Remember, charities need money now, so for balance, most of your legacy giving should be money for today.
In Table 2, we display the time it takes for money to grow into an ongoing gift of over a billion dollars, in today’s dollars, every 25 years. I start the table with a billion-dollar gift to the future in the hope that a multi-billionaire reads this (fingers crossed!):
Note: At the year of reaching a $ 1 Billion gift level, the cumulative total of all the prior gifts made every 25 years totals approximately $1 Billion. So you would have given a great deal every step along the way.
Once a Funds Generator organization is established to offer this way of growing your donations in a PHF service, the amount of initial money per gift should be within everyone’s financial capability. However, as we see, the larger the gift, the sooner your billion-dollar impact begins.
Almost any amount set aside can make a huge difference over the long term of posterity.
Canada-wide, we have amazing collective potential:
Canada has about 40 Million people, and about 5%, or about two million people, plan to leave money to charity as a legacy gift via their will. If ten percent of this legacy group agreed to seed a funds generator for charity, then about two hundred thousand seed fund donors would make a gift. If the seed fund size averaged $1,000, then the overall value of the starting funds is $200 million.
On average, individual funds starting with $1,000 reach the year of $1 Billion level in year 575 per Table 2 above. At year 575, the group plan based on a $200 Million seed fund would generate $229 Trillion in gifts every 25 years. As Canada’s Annual GDP is about $3 Trillion in Cdn funds, such a huge contribution would likely be excessive. Let's consider levelling off earlier.
For example, per Table 3 below, the program could level off at Year 400 and give $3.6 Trillion every 25 years. Note that $3.6 Trillion moving into charities would increase the Disbursement Quota minimum charitable operations spend by $180 billion annually – about nine times today’s annual donations.
After 800 years, the combined cumulative gift has accumulated $54 Trillion, which is enough to fund twice the annual entire Canadian economy. Uses for this money will no doubt be found - like reducing taxation. This highlights that donors' wishes and the Funds Generator plans should be carefully crafted.
Conclusion:
This article demonstrates how anyone could give billions of dollars via a yet-to-be-built Funds Generator. With an investment program that kicks in after we pass way, every individual can make a huge difference, no matter the amount they give. The amount of money that can be generated is staggering, individually and collectively.
How should donors prepare long-term gift plans to give such huge donations? More to come next time.
Photo by Superkitina on Unsplash