A non-profit launched a planned giving friendly taxable bond issue to support its expansion.
Type of Financing
Taxable General Obligation Bond Issue
Financing Amount
$100,000,000 (maximum issuance amount)
The Need:
A quickly growing non-profit needed a new source of financing to support its nationwide expansion efforts. Its successful capital campaign and planned giving programs are expected to create significant future revenues, but will not provide sufficient current funds to pay for programs and facilities needed today. A taxable bond issue allowed a new way for benefactors to immediately support the non-profit and earn a return on their investable funds.
Our Solution:
Coughlin worked with the non-profit to establish a Master Trust Indenture, which will allow the issuance of up to $100,000,000 of taxable general obligation bonds in many separate closings. Since the third quarter of 2019, the borrower has issued over $11,600,000 from three bond sales with fixed interest rates and maturities from 2024 to 2049. Purchasers of the bonds include board members, benefactors, employees and Charitable Remainder Trusts. The non-profit issuer expects that a significant portion of the principal and interest payment associated with these bonds will be given back to the borrower. The various maturities offer the investors a variety of terms to meet their specific needs. Also, the development team at the non-profit now has a new way to approach donors and supporters knowing that benefactors often have more fund available for investment than they do for current cash donations.