Israel reports on Lambuth University


By Cathy Farmer

 Dr. Jerry Israel, Interim President of Lambuth University, reported to the conference: “For all the difficulties we’ve experienced this year, our mission, which is teaching and learning and spiritual formation, has never been questioned. When the accreditation team visited Lambuth, the team documented the exemplary nature of our programs. That sustains me and should sustain you!”
Israel said the school’s greatest hope for the future is the balanced budget for next year.
“Our greatest fear is that all the bad news will result in our students abandoning us. So far they have not,” he said. “So far, things are holding together about as well as we can possibly expect.”
He then asked everyone to go back home and tell the “folks not to give up hope. We will continue together.”
In addition to spreading “reasonably good news,” Israel also introduced Lambuth’s new Capital Acquisition Plan (C.A.P.). C.A.P. is a means for persons who are 75-85 years of age to make a lasting contribution to Lambuth University at no expense to them, to their estate, or to their heirs by donating unused insurability.
Under the encouragement of Bishop Joe Pennel and Dr. Vin Walkup of the Nashville Area Foundation, Foundation for Resource Enhancement (F.R.E.) representatives contacted Lambuth University to present C.A.P. as a means to help Lambuth meet its immediate and long-term financial needs. 
F.R.E. is a not-for-profit entity whose mission is to help other not-for-profits raise capital for operating and capital improvement campaigns. Like other not-for-profits it acquires funds through loans and grants.
What is insurability?
Every person has a maximum amount of life insurance they can purchase based on assets and income. Most persons do not completely utilize their entire amount of insurability. For instance, a person may be currently insured for $250,000 but could be insured for $500,000. That means they have $250,000 of life insurance insurability coverage that they could purchase if they desired. However, if they do not plan to purchase more life insurance, that excess insurability can be donated to Lambuth University through the C.A.P. program. 
How can participation in C.A.P. help Lambuth?
When unused excess insurability is donated to Lambuth, the Foundation for Resource Enhancement purchases a life insurance policy on the donating individual. The Foundation for Resource Enhancement makes all premium payments on the policy.
When a significant pool of donors is amassed, F.R.E. issues a 20 to 25 year loan to Lambuth. For example, with a pool of donors numbering 125, F.R.E. might purchase $10 million in life insurance policies collectively. So by July 30, F.R.E. would be able to make a loan of $6 million dollars to Lambuth. 
F.R.E. then invests the other $4 million dollars to pay the premiums on the policies and principal on the loan itself.   Lambuth would receive a low interest loan on which they would be responsible for paying only the interest. 
How would participating in C.A.P. impact someone financially?
There is no expense or liability to the donor of insurability or to Lambuth—ever! The Foundation for Resource Enhancement pays the premium on the policies and the principal on the loan. Lambuth gets an immediate interest-only loan. By donating unused insurability, benefactors make possible a much needed immediate cash flow for Lambuth. The gift of insurability does not affect their estate, their current life insurance policies, or what their heirs will receive. If this program sounds too good to be true, rest assured that research has been done and it is sound. The underwriting insurance company is ING, and other institutions, such as the Cleveland Clinic, Cincinnati Children’s Hospital, and Ashland University have used this program.•