PHILANTHROPY

	Sign In Sign-Up

Main Index | Funding Garage Inventions | Garage Shares | Example Ads | Small Business and the SEC | Funding Philanthropic High Tech R&D | The New Regulation D | Form U-7 | Regulation A | Executive Summary Gallery | Executive Summary Submission | This Site | How To Make Professional-Looking Web Sites | Links To Capital | Spanish/French Version of Garage Capital | The Razor's Edge

PHILANTHROPY

&

FUNDING HIGH RISK R&D

Let us say one has an exceptional idea, but it requires some noodling, and one is either financially "exposed" already, or unprepared to make a serious sacrifice for the unproven project's sake. As long as the idea is philanthropic -- can lead to less suffering for humankind, beit for bungeying out of burning buildings or burning dung for fuel -- it follows that the project should be assisted by the many forms of government.

1. Produce "edutainment" which incorporates the inventive project; applying the Golden Rule to what one would expect regulatory agencies to prefer in research, documentation, budgeting, etc. This "edutainment" can lead to sales materials, CD publishing, television programs, seminars, etc., which, if donated-to and distributed-by a non-profit corporation, may offset some portion of the production expenses. Another nice thing about "documenting" a project is that if it turns out to be insane, it still may have some merit.

2. Produce and enter a "Prize" or "Competition," sponsored by a non-profit corporation, organized by you, probably. The Holographic Screen prize would benefit IMAX, IWERKS, and SONY, so their participation could include stock or products. The philanthropy of holographic technology for educational media is relatively sound, as numerous government grants have been made in this area (and reason enough for realizing one may "lose" the grant competition, thus making it a fairly high risk). Essentially the same as a "standing order."

3. Apply for a public grant. SBIR has "open" proposal windows, during which any project may be submitted if it has technological and commercial potential.

4. Apply for a private grant. There are thousands of private foundations with good intentions though often their money is committed to particular projects.

5. Create and apply-for a private grant. Approach friends with the opportunity of no-taxes, and the ability to work-off future years' taxes... (Bearing in mind that one may lose the competition.)

6. Incorporate or partner, and carry-forward development expenses of several projects at once, trusting one will "hit." One may want to approach a gambler for this one, and incorporate a less toxic strategy, such as by figuring a date "window" to add a "prize" or "production." This also assumes one will protect the investor to the best of one's ability. If nothing "hits," this is a mess. Another heinous abuse of this is to look for investors after a project has carried-forward debts like owing worker's back-pay. Do not go there. That is not implied here in any way.

7. Hold a non-profit "raffle" to pay for the objective, and attach "stock" in the "idea" for the winner. This is actually two ideas: a raffle, which is valid for a fund-raiser for a non-profit, and the prize of an interest in one's project or invention, as opposed to a percentage of the cash raised. The theory here is that one might attract investors to one's project through a means indirect to the conduct of the non-profit corporation, in which the non-profit grants tax-deductions, and the final tax-basis of the prize may be offset for a year or more (the offset is one for a CPA). The abuse implied is that one's project might not later receive funding from the non-profit by winning an achievement competition, in which case a pile of equity in the project will be transferred to the investor, and the field will be advanced, but one's company will be cash and equity poor, stalled. There is also the possibility that the donated gift may be used by the non-profit for some other purpose (if tax laws, for instance, require no stipulations on donated prizes), since arm's length protections will govern its operations.

8. Have open bidding from a non-profit corporation for the projected objective. That is, create a standing firm-offer for examples of the R&D objective, and try to find businesses to contract the product or service, which could include yours. An example could be "radar absorptive paint." This was a standing order from the Department of Defense for years.

9. Another idea is to approach the project as a business, and "expense" the project as a complete failure from the start, and then recoup the difference in a different tax year. This assumes one has a high tax burden on one's business or a partner's business. The field of R&D taxation is a tax specialty, so I hope I have the gist of it correct here. This is a variation of #6 above. It is also NOT a reduction of risk.

10. The underlying metaphysical truth is that as we liberate others, we are liberated, as Jesus taught. So, complete disclosure is one direction. Formatting one's information as a production that can be donated to a library is another. Donating the results and/or mechanisms to a college or other public/non-profit institution is another. The ultimate repositories of hard facts are supposed to be the NIST (the National Institute of Standards and Technology), and the Library of Congress, and foundations like the Smithsonian Museum.

11. Asking for donations of surplus items or "samples" that can become value-added via R&D, with the intention of then giving the value-added version to the lender... I am thinking of a car converted to natural gas, for instance. The pertinent issues would be having several tanks or one, and whether or not to supercharge in some way. As long as the method were documented and put on the Internet, one might also make this activity tax-deductible.

12. Dual-purpose objectives. A piece of software used to produce a scale model of a project might also be used for web publishing? This may complicate R&D funding, but high tech R&D is a personal matter until it becomes public.

13. Approach college teachers. Although some are prohibited from moonlighting as experts or consultants, this is rare. The endorsement of one's research by a leading scholar is easier than ever before over the Internet, and investor companies seem to take these endorsements seriously.

14. Begin as a non-profit, and then become a for-profit. This very scary proposition is supposedly impossible, except that organizations like the National Association of Securities Dealers, NASD, which owns NASDAQ, seem to think it is possible and worthwhile and in the public interest. Certain states, such as California, have been vehemently opposed to this possibility, so it might behoove one not to operate there.

15. And finally, consider the Office of Technology Transfer for one's project, at whatever stage of development. One may also be able to benefit by encouraging one's favorite College to start an OTT program if they don't already have one. And it might become possible to work at the College in a consultant's power. The downsides of the OTT mechanism have been that the project royalty will be a small royalty of a royalty, tax deductions tend to be hampered, and the talent of the evaluating experts of the College may have been available in any case.