Results 1 to 9 of 9
  1. #1
    Pro
    Points: 22,441, Level: 45
    Level completed: 88%, Points required for next Level: 109
    Overall activity: 2.0%
    Achievements:
    Veteran10000 Experience Points
    EggMcClone's Avatar
    Join Date
    Mar 2006
    Location
    Michigan
    Posts
    2,374
    Points
    22,441
    Level
    45
    Thumbs Up
    Received: 0
    Given: 0

    New fundraising scheme at OSU

    T. Boone Pickett has come up with a new scheme to raise $280 million for Oklahoma State.

    Cowboys Athletics, Inc., took out a $20 million loan to pay a $357,000 premium for 28 OSU supporters who range in age between 65 and 85, each agreeing to make OSU athletics the beneficiary of a $10 million policy. The insurance company invests the $357,000 to turn a profit while the 28 supporters are living. Once all 28 OSU supporters die, the athletic department will have been paid $280 million.
    "There is no financial obligation to the people who are supporting this,” said Craig Clemons, vice president of athletic development. "It doesn't detract from their personal life insurance policies for their families.
    "Their asset is their health, not their wealth. It's rewarding that we have supporters who maybe can't write a seven-figure check but want to have this legacy.”
    It seems like a pretty good deal and says that Texas Tech and UT are looking into a similar program. It's kind of an interesting article about a school finding a new way to raise money (as if having Pickett as a booster wasn't enough...). Although there are some questions about the tax-exempt status of schemes like this.

    EDIT: Whoops, BenEClone beat me to this.



  2. #2
    All-Star
    Points: 40,773, Level: 62
    Level completed: 33%, Points required for next Level: 877
    Overall activity: 0%
    Achievements:
    Veteran25000 Experience Points
    tec71's Avatar
    Join Date
    Apr 2006
    Location
    Ankeny, Iowa
    Posts
    1,180
    Points
    40,773
    Level
    62
    Thumbs Up
    Received: 44
    Given: 7

    Re: New fundraising scheme at OSU

    Here's a somewhat dark version of that. I had a friend who got cancer. He had to leave work. His work had provided term life insurance of about $130k free to him. He had the option to roll that over upon terminating his employment without an examination. Of course becuase of his age 65, the premiums were like $1200 per month. It had no disability value. The doctor gave him no more that 36 months to lieve. So he found a charity to put up the $1200 per month in return for him leaving them the death benefit. He had no one else to leave it to particularly. Frankly it came out of a discussion over a couple beers he and I were having. I jokingly offered to put up $1800 per month, $1200 to the co & $600 to him in return. We laughed about it. a week later it was a done deal with the charity.



  3. #3
    All-Star
    Points: 35,282, Level: 57
    Level completed: 86%, Points required for next Level: 168
    Overall activity: 0%
    Achievements:
    Veteran25000 Experience Points

    Join Date
    Apr 2006
    Location
    ic
    Posts
    1,851
    Points
    35,282
    Level
    57
    Thumbs Up
    Received: 1
    Given: 0

    Re: New fundraising scheme at OSU

    Maybe I am stupid but isn't there still a risk involved? Insurance premiums for a 10,000,000 policy for someone 70 years old is a million dollars a year. What happens if they live for ten more years?



  4. #4
    All-Star
    Points: 35,282, Level: 57
    Level completed: 86%, Points required for next Level: 168
    Overall activity: 0%
    Achievements:
    Veteran25000 Experience Points

    Join Date
    Apr 2006
    Location
    ic
    Posts
    1,851
    Points
    35,282
    Level
    57
    Thumbs Up
    Received: 1
    Given: 0

    Re: New fundraising scheme at OSU

    Nevermind, I get it.



  5. #5
    Pro
    Points: 27,808, Level: 51
    Level completed: 24%, Points required for next Level: 842
    Overall activity: 0%
    Achievements:
    Veteran25000 Experience Points

    Join Date
    Apr 2006
    Location
    Ankeny, IA
    Posts
    2,357
    Points
    27,808
    Level
    51
    Thumbs Up
    Received: 21
    Given: 4

    Re: New fundraising scheme at OSU

    Quote Originally Posted by EggMcClone View Post
    T. Boone Pickett has come up with a new scheme to raise $280 million for Oklahoma State.

    It seems like a pretty good deal and says that Texas Tech and UT are looking into a similar program. It's kind of an interesting article about a school finding a new way to raise money (as if having Pickett as a booster wasn't enough...). Although there are some questions about the tax-exempt status of schemes like this.

    EDIT: Whoops, BenEClone beat me to this.
    Unless my math is way off, the premium is $357K each/year, or about $10MM . OSU has to pay interest on the loan, which at prime is over $1.6MM a year. If one of these dudes doesn't buy it in the first two years, the first $20MM is gone and they have to borrow more to keep paying the premiums.

    All that asise, I can't see an 85 year old getting life insurance period, let alone at a premium less than 4% of the face amount, so I hope the NCAA has done theri due diligence to see that this is all above board.



  6. #6
    All-Star
    Points: 15,771, Level: 38
    Level completed: 16%, Points required for next Level: 679
    Overall activity: 0%
    Achievements:
    Veteran10000 Experience Points
    Dormeezy's Avatar
    Join Date
    Nov 2006
    Location
    Cedar Rapids
    Posts
    1,158
    Points
    15,771
    Level
    38
    Thumbs Up
    Received: 0
    Given: 2

    Re: New fundraising scheme at OSU

    That sure sounds like a morbid practice.. kind of creepy...



  7. #7
    Speechless
    Points: 391,925, Level: 100
    Level completed: 0%, Points required for next Level: 0
    Overall activity: 100.0%
    Achievements:
    SocialOverdriveVeteran50000 Experience Points
    Wesley's Avatar
    Join Date
    Apr 2006
    Location
    Omaha
    Posts
    57,265
    Points
    391,925
    Level
    100
    Thumbs Up
    Received: 325
    Given: 264

    Re: New fundraising scheme at OSU

    College Sports is now big business - life or death for some.


    CFH HMagic bball season next year.
    Let my Fred's Four Horsemen ride: Georges, Hogue, Nader, and McKay.

  8. #8
    Addict
    Points: 81,314, Level: 88
    Level completed: 65%, Points required for next Level: 636
    Overall activity: 6.0%
    Achievements:
    Veteran50000 Experience Points

    Join Date
    Apr 2006
    Posts
    5,733
    Points
    81,314
    Level
    88
    Thumbs Up
    Received: 57
    Given: 0

    Re: New fundraising scheme at OSU

    I'm not a finance major, but I just don't see how this is going to work. Insurance companies are trying to make money. If they give out more than they receive in premiums and interest they lose money. Thus, they must be making more than the $280M from the investments. Therefore, why doesn't OSU cut out the middle man and invest that money on their own?



  9. #9
    Speechless
    Points: 391,925, Level: 100
    Level completed: 0%, Points required for next Level: 0
    Overall activity: 100.0%
    Achievements:
    SocialOverdriveVeteran50000 Experience Points
    Wesley's Avatar
    Join Date
    Apr 2006
    Location
    Omaha
    Posts
    57,265
    Points
    391,925
    Level
    100
    Thumbs Up
    Received: 325
    Given: 264

    Re: New fundraising scheme at OSU

    Maybe they are picking bums off the street and they hope they kick the bucket early. Insurance money is tax free up to $2M?


    CFH HMagic bball season next year.
    Let my Fred's Four Horsemen ride: Georges, Hogue, Nader, and McKay.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
  • Football
  • Iowa State vs. North Dakota State
  • August 30, 2014
  • 11:00 AM