Donor Proposes Life-Insurance Program to Raise Funds

Barry Kaye, a Florida insurance tycoon and newly appointed member of the Florida Atlantic University Foundation, in Boca Raton, says he will raise $100-million for the university if it accepts a program he is proposing to use one of his new life-insurance plans, the Palm Beach Post reports.

Under the proposal, which is similar to one recently adopted at Oklahoma State University, in Stillwater, a philanthropist would allow the university’s foundation to take out a multimillion-dollar life-insurance policy on him or her, at a cost to the foundation. After holding the policy for a couple of years, the foundation could then sell it to an investor and pocket the money. When the philanthropist dies, the investor could collect the original amount of the policy.

In June 2005, the university established the Barry Kaye Institute of Insurance Philanthropy to specialize in using insurance as a financial-planning and philanthropy tool after Mr. Kaye donated $5-million to the university’s business college.

Mr. Kaye, who has donated and pledged more than $20-million to the university, said he believes his proposal could be approved within three to four months.

At least 40 athletics departments, including some of the biggest in the country, are considering establishing life-insurance policies on their boosters to help defray the rising cost of college sports, The Chronicle of Higher Education has reported.