Tax-Exempt Bonds
Fight climate change, protect the environment, create ecosystem services, support indigenous philanthropy, plant trees, and much more with an Ecology Crossroads tax-exempt managed project investment.
Tax-Exempt 501(c)(3) Bonds
Program supporters can purchase a bond that acts like a investment, counts as a donation and is combined in a capital asset fund which doubles the investor's bond investment over the course of the depreciation of project equipment assets and the appreciation of agricultural or forest based sustainable development initiatives (over a period of 8-10 years). A $10,000 private-activity bond can be purchased for $6,750 until December 2022, the principal immediately becomes a tax-exempt asset (endowment) and the gains earned over the term of the bond are special tax-exempt earnings which are paid in carbon credits or as benefits from ecosystem services. The bonds are pegged to the retail value of Fairtrade carbon offsets for forestry programs, the number of credits that can be claimed is based on the cost per ton to sequester carbon at the time of purchase.
$10,000 Private Activity Bond
Ecology Crossroads has developed a tax-exempt private activity bond fund program for eligible 501(c)(3) nonprofit projects that create a public benefit. A qualified borrower (Globcal International or other program member) can typically commission and finance a project at a lower interest rate than available through conventional financing because the interest paid to bondholders is exempt from federal income tax. Pretty much any long-term long-term asset a nonprofit needs to carry out its mission is a potential reason to issue bonds. Tax-exempt bonds cannot be issued for operating expenses, to cover professional fees or for salaries; all funds invested into bonds must be applied to equipment, supplies, and tools under a depreciation schedule, invested in agricultural growth projects or in creating capital assets. Normally bonds will only be developed for time and performance based projects during their first 3-5 years until a project can be proven sustainable on its own merit.
To be qualified as tax-exempt private activity bonds the activity being created to develop an asset must help fulfill charitable or otherwise non-profit purposes for which the organization was established. Each bond instrument issuance is created based on specific details that are relative to a particular program.
Because our bond program is safe, direct, is not a municipal bond and because it compares directly to investment in a for-profit enterprise to deliver investors a tax-free income our bond records are open to public inspection which will be outlined in our IRS Return Form 990 Schedule K beginning July 15, 2023.
To save costs our financial instrument is developed as a private placement tax-exempt bond. The bonds issued directly by the organization as the project sponsor. A private placement is an arrangement with single investors, or a small number of investors, to buy all the bonds in a greatly simplified process. This is done without bond counsel, borrower's counsel, underwriter, financial advisor or conduit issuer, the savings can be as high as 3-5%.
Each bond issuance includes an Official Statement and the Bond Certificate which are guaranteed directly against the project asset. Bonds are based on liquidable common capital such as buildings, equipment, furniture, machinery and vehicles; bonds are not issued for events, intangible property, labor, professional fees or operational expenses.
A nonprofit that issues bonds must be aware that this responsibility to investors remains in place for the life of the bonds. Further, failure to provide accurate continuing disclosure in a timely manner could be a violation of federal securities laws.
Funds transfer and platform service fees are not negotiated and can vary ranging from 1% up to 12% or more depending on the provider, these fees must be deducted from the total or prepaid at the time of purchase. Funds can be transferred directly to Ecology Crossroads using Zelle, PayPal, Bank Transfer, or Electronic Check.
Ecology Crossroads developed the non-profit charitable tax-free bond as a solution for international project development with the United Nations Sustainable Development Goals and indigenous peoples directly through non-governmental organizations and non-state actors.
The Official Statement will show all the maturities and associated interest rates of a bond issue, the terms differ based on various factors. Activity and municipal bonds generally give the borrower the right to buy back the bonds prior to maturity, a right usually utilized to refinance the bonds if interest rates drop in the future. Such “call provisions” typically provide that right after ten years.