Chapter 12: The "People's Bailout" -- Full Disclosure

[Founder (Greg Unruh)]

It's long overdue for me to post a new blog entry. I'd like to start by talking about our newly launched program titled, "The People's Bailout" (http://peoplesbailout.givewithoutgiving.org). The "People's Bailout" is a new and innovative ad-based real estate program designed to help struggling home owners, and at the same time help raise money for designated charities. Functionally it's very similar to a raffle, but we've been careful not to classify it as a raffle so as not to be bound by State gaming and lottery laws. A good or service must be purchased, and in return the consumer is entered into a promotional home give-away or cash prize drawing. The service we are providing is a free ad-based virtual billboard allowing home owners to sell blocks of ad space to potential consumers. This ad space can be used however the consumer chooses -- some may choose to advertise a business (i.e. legal practice, dental practice, taxidermy, Mary Kay, Amway, Avon, etc.); while others may use the space to share a personal or inspirational message with those that visit the virtual billboard. In exchange for their purchase, they are entered into a promotional drawing where the virtual billboard owner surrenders their home as the grand prize. A minimum number of ad-blocks must be sold before the home give-away drawing is validated. If the minimum number of sold ad-blocks are not achieved before the promotion deadline, then a cash prize drawing will be held. The cash prize drawing will be equal to 50% of the collected ad revenues for the promotion (less a 7% administrative/processing fee). The remaining balance (less the administrative/processing fee) will be donated to the designated charity for the promotion.

Here's an example of how this might look if the minimum requirements for the home give-away are achieved:

Total virtual billboard ad-blocks = 5,000
Price per ad-block = $50
Total value of virtual billboard = $250,000
Remaining balance after 7% administrative/processing fee = $232,500
Total debt associated with home = $200,000
Remaining balance to be donated to designated charity = $32,500

Breakdown of 7% administrative/processing fee:

7% of $250,000 = $17,500
Credit card processing fees:
- 2.9% per transaction = $7,250
- Flat fee of $0.30 per transaction = $1,500
Total credit card processing fees = $8,750
Remaining balance after credit card processing fees = $8,500
Remaining balance is used to offset other operational expenses (i.e. hosting fees, legal fees, development, compensation, benefits, etc.). If there is a remaining balance after operational expenses have been paid, it will be deposited into the GiveWithoutGiving.org General Relief Fund.

Here's an example of how this might look for a cash prize drawing if we don't meet the home give-away minimum requirements:

Total virtual billboard ad-blocks = 5,000
Price per ad-block = $50
Total number of ad-blocks sold = 2,500
Total ad revenues collected = $125,000
Remaining balance after 7% administrative/processing fee = $116,250
50% of remaining balance awarded as cash prize = 58,125
50% of remaining balance to be donated to designated charity(s) = $58,125

Breakdown of 7% administrative/processing fee:

7% of $125,000 = $8,750
Credit card processing fees:
- 2.9% per transaction = $3,625
- Flat fee of $0.30 per transaction = $750
Total credit card processing fees = $4,375
Remaining balance after credit card processing fees = $4,375
Remaining balance is used to offset other operational expenses (i.e. hosting fees, legal fees, development, compensation, benefits, etc.). If there is a remaining balance after operational expenses have been paid, it will be deposited into the GiveWithoutGiving.org General Relief Fund.

I believe in full-disclosure, so I want you to know exactly where the money is going and how it is being used. In the event there is a cash prize drawing because the minimum number of sold ad-blocks where not achieved for the home give-away drawing, none of the collected ad revenues would be applied to the associated debt of the home. The debt of the home is only settled if the minimum number of sold ad-blocks are achieved.

At the end of the day, someone will either win a home free and clear of all debt and with instant equity, or a cash prize equal to 50% of the collected ad revenues of the promotion (less administrative/processing fees). What are the odds of winning? In the home give-away example, it could be a 1 in 5,000 chance of winning. In the cash prize example, it could be a 1 in 2,500 chance of winning. Where else are you going to get those type of odds with such a high payout? Everybody wins! It's a win for the home owner in that they have a viable alternative to selling their home - it's a win for the consumers in that they get to promote something of interest and earn a chance to win either a home or cash prize - and it's a win for the designated charity as the ultimate benefactor! Keep in mind...the goal isn't to have a cash prize drawing; the goal is to sell the minimum number ad-blocks required for a home give-away promotion so a home can be awarded to a lucky winner! The cash prize drawing is just an added incentive as we try to reach the minimum requirement of the home give-away promotion.