Abstract:
A multiple level gift-giving system and method in which a negotiable philanthropy check is issued by a qualified charity to a consumer. The name of the payee is blank on the check. The name of any qualified charity is filled out either by the consumer or another who has received the philanthropy check as a gift or sale or other form of distribution. A comparison is made between the identity of the payee and a list of qualified charitable institutions and the check is honored if the payee is confirmed to be a qualified charitable institution but is not honored if the payee is not confirmed to be a qualified charitable institution.

Description:
PRIORITY CLAIM  
       [0001]    This application claims the benefit of U.S. Provisional Application Ser. No. 60/171,450 filed Dec. 22, 1999. 
     
    
     
       FIELD OF THE INVENTION  
         [0002]    This invention relates to systems and methods for enabling and promoting charitable giving and particularly multiple level charitable giving.  
         SUMMARY OF THE INVENTION  
         [0003]    Over 150 years ago, Alexis Tocqueville in his classic  Democracy in America  noted America&#39;s support of organized philanthropies. Today, we have hundreds of thousands of qualified tax exempt organizations and America&#39;s interest in organized charities remains a significant and notable aspect of our culture. Employee deduction plans and employee matching plans are, of course, common today. However, other than these, the manner and means of actually contributing moneys to these organizations has not changed a great deal over this 150 year period of time.  
           [0004]    The preferred embodiments of this invention provide a novel system and method for managing, promoting, teaching, and enabling multiple levels of giving to philanthropies. A novel philanthropy “check” having a face value of a given dollar amount is given in return for a contribution of this amount plus service fee to a qualified charity. The contributor may directly contribute the face value of the check by filling in as payee the name of a qualified organization, or, the contributor may use the philanthropy check to promote multilevel giving. Rather than contributing the money directly to the qualified charity, the contributor can, for example, give the philanthropy check to anyone, for example, to an employee, to his or her child, or to another relative. Or, the contributor may choose to give philanthropy checks to a school, which in turn, gives the philanthropy checks to a class of students.  
           [0005]    As a result, a single philanthropy check in accordance with the system and methods of this invention promotes multiple levels of giving with each level of participants receiving the pleasurable experience of charitable giving.  
           [0006]    In this manner, multiple levels of entities and individuals gain the satisfaction and experience of giving. For example, an individual or company purchases 50 philanthropy checks, each having a face value of $50 and these checks are given to an elementary grade class of students as a class experience. Each student not only is taught the virtues and importance of supporting philanthropic organizations but given the hands-on experience of personally selecting a particular philanthropic organization, filling out the name of the philanthropic organization, and then mailing or otherwise delivering the philanthropy check to the organization.  
           [0007]    The philanthropy check also offers an opportunity for a company to give a unique form of bonus to its employees by giving each employee a philanthropy check to give in turn to his or her favorite charity or to, in turn, give the check to a relative or friend who then fills out the payee portion of the check to his or her selected charity.  
           [0008]    Another form of corporate giving is to match a portion of the face value of the philanthropy check. In one example, the employer issues a $100 philanthropy check upon receipt of only $30 from the employee with the corporation contributing the balance. In another example, the corporation offers the checks at face value and contributes the service fees.  
           [0009]    In still another example, the employer, while not itself making a cash payment, facilitates and encourages its employees to contribute by buying and selling the philanthropy checks to its employees via a salary withholding plan.  
           [0010]    These employer/employee uses of philanthropy checks thus promote giving at multiple levels. Another feature of these plans is that they have the attributes of (a) lowering the accounting, bookkeeping and other expenses incurred by a conventional matching fund program, (b) divorcing the employer from the charity selection process, and (c) makeing the program far more interesting to the employee because each employee has hundreds of thousands of charitable institutions to select from.  
           [0011]    Other forms of distributing the philanthropy checks include point of services sales of the checks at businesses, awarding the philanthropy checks as sales incentives, awarding the philanthropy checks for frequent flyer miles, and marketing the philanthropy checks over the Internet. Whatever form of distribution is used, the philanthropy check maintains its character of encouraging individuals to make a unique gift that enables the ultimate donor to personally select a favorite charity of his or her choice. 
       
    
    
     BRIEF DESCRIPTION OF THE DRAWINGS  
       [0012]    [0012]FIG. 1 is composed of FIGS. 1A and 1B, the figures illustrating the multiple giving levels promoted and enabled by the preferred embodiments of the invention.  
         [0013]    [0013]FIG. 2 illustrates the front side of a typical philanthropy check used in the systems and methods of this invention;  
         [0014]    [0014]FIG. 3 illustrates the reverse side of the philanthropy check of FIG. 2;  
         [0015]    [0015]FIG. 4 is a flow chart illustrating a preferred embodiment of a system and method of this invention; and  
         [0016]    [0016]FIG. 5 is a detailed flow chart illustrating the handling of the philanthropy checks between the issuing charity and its bank 
     
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT  
       [0017]    The preferred embodiments of this invention enable a novel system and method for enhancing and facilitating the giving of money to organized charities. A feature of the invention is that philanthropic giving is encouraged and enhanced on at least two levels of giving.  
         [0018]    [0018]FIG. 1 is illustrative of the multilevel charitable giving provided by the invention. In the example shown, a consumer  20  purchases a package of 10 philanthropy checks denoted as “Charity Checks.” In the example shown, the consumer is an individual. However, as described in detail below, the invention is applicable to and useful by corporations, partnerships and business and institutions in general.  
         [0019]    A replica of a typical philanthropy check  25  is illustrated in FIGS. 2 and 3. The front face of the check  25  conforms to a bankable negotiable instrument in which a payor  26  “Charity Check, Inc.” orders a drawee 27 “Bank of North America” to pay $50 to the payee identified in line  29 . The rear face of the check shown in FIG. 3 includes a specific warning that check must not be presented by any entity that is not a qualified charity under the U.S. Internal Revenue Code (IRC). It will be understood that the specific identity of the payor  26  and drawee  27  will be determined in accordance with actual entities authorized to provide the systems and methods of this invention.  
         [0020]    In addition, the face of the philanthropy check front may also include an additional notice to this effect that the transfer of the checks to a qualifying charity is not a charitable contribution. As noted below, the tax benefits are received when the consumer  20  initially contributes the face amount of the philanthropy check plus handling fee to the payor  26 .  
         [0021]    In one embodiment of the invention, the consumer&#39;s name or logo is imprinted on the philanthropy check  25 . This would be particularly appropriate for a corporate donor. In another embodiment, the identity of the contributor is not indicated. This type of philanthropy check facilitates anonymous gifts.  
         [0022]    It will be apparent that the check  25  may be issued in any convenient dollar denomination amount or other currency when used outside of the United States.  
         [0023]    The consumer or purchaser  20  of the check  25  will pay the face value of each check plus a service fee to the authorized qualified charitable entity  26  shown in the example as Charity Checks, Inc. Thus, in the example shown in FIG. 1, the consumer will pay a total of $500 plus service fee for the 10 philanthropy checks. At this stage, by donating $500 plus fee to the Charity Checks, Inc. a charitable institute, the consumer  20  has performed a first level of charitable giving by making a charitable tax deductible contribution to the payor  26 .  
         [0024]    The second level of charitable giving is shown at block  40  in FIG. 1B. When the consumer  20  distributes three of the philanthropy checks  25  as gifts to others, shown by way of example, as a birthday present to a nephew (block  41 ), a contribution to a holiday grab bag at the office (block  42 ) and won by the boss (block  43 ) and a year-end bonus to the consumer&#39;s gardener (block  44 ).  
         [0025]    A third level of giving occurs as shown in FIG. 1B when the nephew, the boss, and the gardener fill in the payee line  29  with the name of a particular qualified charity and send the check to such charity. Thus, in the example shown, the nephew contributes his $50 check to the Alumni Association (block  50 ), the boss contributes his $50 to the Public Broadcasting System PBS (block  51 ) and the gardener contributes his $50 check to the Wildlife Fund (block  52 ).  
         [0026]    Another feature of the invention is that it facilitates anonymous giving since the identity of the actual contributor is not shown unless he or she makes known his or her identity. As illustrated in block  55  of FIG. 3, the consumer  20  makes three $50 anonymous gifts by mailing a $50 check to the Red Cross (block  56 ), the Cancer Society (block  57 ) and the library (block  58 ).  
         [0027]    Another significant feature and advantage of the invention is that it enables children to have a very meaningful introduction and hands-on experience in charitable giving. Thus, in block  60  of FIG. 1B, the consumer  20  has given a $50 check to each of his or her children. Each child can then select which particular charity they wish to give to. Thus, as shown, the eldest child  61  donates his check to the Boy Scouts (block  62 ) by filling out the payee line  29  with the Boy Scouts and transmitting the check to the Boy Scouts. The middle child donates her check to the Orphan Fund (block  14 ) and the youngest child  65  donates her check to the Animal Shelter (block  66 ).  
         [0028]    A feature of the preferred embodiments of the system and method of this invention is that the payor  26  itself is a qualified charity. As a result, the consumer  20  makes a charitable tax deduction contribution when the checks  20  are initially purchased. Thereafter, the person can, as shown by block  70  of FIG. 1B, hold on to the check to make a second level donation to a particular qualified charity (block  71 ) at a later date. In the meantime, the payor  26  can deposit the funds received and earn interest thereon with the money being used to promote the growth of charitable giving using the system and methods of this invention.  
         [0029]    The system and method of a preferred embodiment of the invention providing the multiple levels of giving are illustrated in FIGS. 4 and 5. As described above, consumer  20  makes a donation (arrow  80 ) to a philanthropic institution  26  such as Charity Checks, Inc. Checks  25  are then issued by the charitable institution  26  to the consumer  20  (arrow  81 ). The philanthropic institution  26  maintains an account at the drawee bank  27  and deposits (arrow  82 ) consumer&#39;s donation and service fee at this bank.  
         [0030]    Consumer  20  then, as described above, distributes the individual philanthropy checks  25 . The consumer  20  can personally give (arrow  85 ) the checks  25  to any qualified charity  29 , either in person or anonymously as described above. In addition, as also described above, the consumer  20  can distribute philanthropy checks  25  to create multiple levels of charitable giving. Thus, in the example of FIG. 1, a second level of giving is accomplished when the consumer  20  gives a philanthropy check  25  to another person  86  (arrow  87 ) such as the nephew, gardener, or children examples of FIG. 1.  
         [0031]    The third level of giving occurs when the recipient person  86  fills out the payee line of philanthropy check  25  with the name of a qualified charitable institution  29  and forwards the check to such institution (arrow  88 ). The recipient qualifying charity  29  deposits the philanthropy check  25  in its bank  100  (arrow  101 ) in the same manner as all of the checks it receives. Following standard procedures, the philanthropy checks are ultimately received by the drawee bank  27  from the charity receiver&#39;s bank  100 .  
         [0032]    After confirmation that this institution that deposits the check in bank  100  is a qualifying charity  29 , the issuing drawee bank  27  honors the philanthropy checks  25  and the amount there of is credited to the qualifying charity  29  in the usual manner.  
         [0033]    A preferred embodiment of the system and method for qualifying the philanthropy checks  25  is shown in the flow chart of FIG. 5.  
         [0034]    In block  125 , the bank of first deposit  100  upon receipt of a philanthropy check notifies the drawee bank  27  of an incoming charge. The drawee issuing bank  27  receives a scanned image of the philanthropy check  25  (shown by block  126  of FIG. 5 and arrow  105  of FIG. 4). The drawee bank  25  then ascertains whether or not the organization depositing the philanthropy check  25  in bank  100  is a qualified charity under the U.S. Tax Code (block  127 ). Two systems and methods of accomplishing this are shown. In one method, the drawee issuing bank  27  compares the identify of the payee institution to determine whether the check depositor is qualified. Since the list of best known charities, e.g., Red Cross, Salvation Army, American Heart Association, etc. is relatively short, bank  27  can efficiently confirm whether or not the identity of the depositor is on its list. If the depositor is on this list (block  127 ), then the drawee bank electronically transfers money equal to the face value of the philanthropy check  27  to the payee&#39;s bank  100  (block  129 ) of FIG. 5 and arrow  106  of FIG. 4. If the name of the institution that deposited the philanthropy check does not appear on the drawee list of qualifying charities (block  135 ), the drawee bank  27  notifies the payor philanthropic organization  26  to review the status of the depositor (block  136  in FIG. 5 and dotted arrow  107  of FIG. 4). The payor then reviews a complete list of qualified charities. If the depositor is a qualified charity (block  137 ), the payor  26  instructs the drawee issuer bank  29  to honor the check (block  138  of FIG. 6 and arrow  108  of FIG. 4). If, however, the payor philanthropic organization  26  determines that the depositing institution is not a qualified charity (block  139 ), the payor philanthropic organization  26  instructs the issuing drawee bank  27  to refuse payment and not honor the check  25  (block  140 ) and returns the improper philanthropy check  25  to the bank of first deposit  100  (block  141  of FIG. 5 and arrow  106  of FIG. 4).  
         [0035]    In an alternate system and method, images of all of the incoming philanthropy checks  25  are initially screened by the payor who instructs the drawee bank  20  to not honor any check that is not deposited by a qualified charity. In another alternative system, all of the philanthropy checks  25  are screened by the drawee bank  27  itself to prevent the honoring of a check made out to a nonqualified charity.  
         [0036]    The specific examples shown in FIG. 1 illustrate a typical use of a preferred embodiment of the invention by an individual for both his or hers personal giving and also encouraging and teaching others to give to charitable institutions. Another example is an employer in the role of consumer  20  in which the philanthropy checks are given out as bonuses to employees, in which all or part of each of the cost of a check is borne by the employer. Each employee is thus involved in making his or her personal contribution to a charity of their choice or the recipient, in turn, can give the check to a friend or relative to give to an organized charity, thus amplifying the effect of a single philanthropy check to multiple levels of gift giving. A significant feature of the preferred embodiment of the system and method exemplified by the employer/employee example is that the employer is not burdened with many of the administrative costs associated with matching funds or salary deduction plans. For example, the employer has no follow up steps to take to qualify or make payment to the recipient charity since this is all accomplished when the employee fills out the name of the payee charity and transmits the philanthropy check  25  to such charity.  
         [0037]    In another very important example, the consumer  20  presents a plurality of philanthropy checks to an elementary school. During class time, the students are taught the importance that Americans have always placed in charitable giving and, as part of the class participation, each student is given one of its donated philanthropy checks  25  to fill out with the name of a qualified charity selected by the student. In this manner, even young children can personally experience the satisfaction of a meaningful giving.  
         [0038]    A significant feature of the philanthropy check is that it can be distributed in a number of very different channels. Airlines can award them for frequent flyer miles. Stores can award them as discounts on purchases. Stores and restaurants can sell philanthropy checks imprinted with their business logo. Dot corn companies can offer them as discounts, incentives, or gifts to their good customers. In every case, the recipient of the philanthropy check experiences the satisfaction that comes from the act of giving when the person fills in the name of a particular qualified charity on the payee line  29  of the philanthropy check  25 .