National Heritage Foundation Bankruptcy
A San Jose bankruptcy attorney comments on the bankruptcy of National Heritage Foundation
Generally, in our Bay Area bankruptcy practice, when we hear of bankruptcy in the news we think of a major company such as GM filing bankruptcy. In this instance, however, the non-profit organization National Heritage Foundation has filed for bankruptcy protection. While bankruptcy normally seeks to eliminate debts to creditors and banks, the National Heritage Foundation wiped out $25 million of debts not to lenders, but to charitable donors.
These donors had charitable gift annuities with the National Heritage Foundation. Charitable gift annuities are a common practice here in Fremont and all over the country. A charitable gift annuity is where a person donates a fixed amount of money to the non-profit organization, and then the donor or another person of their choosing is paid a fixed monthly amount for the rest of their life as a return. Many people have found this an excellent use of their money because they want to support a charitable organization, and it also creates a fixed income while having tax and risk advantages over other investment options.
While we do not know of anyone in San Jose who was affected, Maurice and Theresa Townsley of Monterey, California had donated $1.2 Million to the non-profit.
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