CAPITAL LEASING

If you would like to assist YET in a substantial way but would prefer not to lose access to your capital, you could consider the unique ‘capital leasing’ concept.

Simply, it means you have a private portfolio invested in your name, where the income generated from the investments is donated to YET for an agreed period.

YET pioneered this structure when three long term supporters of the Trust sold their business and wanted to explore how they could help the Trust in a significant way, without necessarily giving away their capital permanently.

They suggested that they ‘lease’ their capital to YET for a set period (in this case, three years), where they retained ownership of the capital and YET receives the income from that capital.

The three donors decided on a structure called an IMA (Individually Managed Account), tailored to their individual risk profiles and managed by a reputable fund manager specialising in IMA’s.

So what are the key attributes of ‘Capital Leasing’?

• You have complete control and security, having assets held in your own name and at call should your circumstances change and you need access to your funds.
• You continue to build your capital and accumulate wealth, whist donating the dividend and interest  income to YET
• YET receives the income stream from that capital, usually paid monthly, thereby supporting the Trust’s youth programs with important regular cash flows
• You tailor your own portfolio to suit your personal investment profile and risk appetite
• Use whichever entity suits your needs – your family trust, a company, in your own name etc
• Use whichever  IMA provider you choose – your existing wealth manager who may like to also maximise benefit to the Trust by foregoing normal fees and commissions or work for an ‘at cost’ basis on this special IMA. Or we can introduce your to organisations that have tailored ‘at cost’ investment options specifically for YET supporters.
• Full tax deductibility for all income donated, as YET is a certified deductible gift recipient.
• YET provides you with monthly and annual tax receipts for monies donated over the financial year.

IMA stands for an Individually Managed Account, which offers you direct ownership of a portfolio which is managed by professional fund managers.

The IMA is your private mandate, investing in a range of Australian and overseas shares, property trusts, cash and fixed interest securities. It enables you to hold the assets in your own name and accumulate capital growth, whilst donating your dividend and interest income to YET for an agreed period at your discretion. The founding donors, for example, have decided to look at capital growth of this special IMA in the future and may at that time choose to donate the capital, donate over inflation, share the capital or may choose to keep the capital – a decision for later with total flexibility.

An IMA provides some attractive benefits to an investor / donor.

• It enables you to continue to build your capital and accumulate wealth, whilst donating income to YET.
• You deal with your current portfolio manager, one you have a relationship with and trust, or YET can put  you in touch with a professional portfolio manager that is a supporter of the Trust
• Most portfolio managers provide on line access so you can see your funds working and proceeds flowing to the Trust, also providing regular statements and reports for tax purposes
• You will receive an annual tax receipt from YET for monies donated over the financial year.

The IMA proposal is one where everyone wins;

For you…..

• Maintaining ownership and control of your capital
• You decide how long a period you will donate your income to YET
• A tailored investment strategy to suit your requirements
• Fee structures can be designed to cover costs only, so that donations to YET are maximised
• Full tax deductibility of donations
• Assisting a great cause directly

For YET….

• Predictable monthly donations that underpin the operation of YET Programs. Enabling YET to plan on regular cash flow
• A significant step toward financial sustainability

Note that it is important to obtain independent financial advice in order to assess the sustainability of the YET – IMA for your personal circumstances. Youth Enterprise Trust is NOT licensed to provide financial advice.