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					Humanitarian Funding / Forgivable Loan Program
               The World Alliance of Mayors
               and Local Officials (WAM)
               Presented by Christina M. Rosario
               August 2007
                                                             Overview

The World Alliance of Mayors and Local Officials
(WAM) is a vital organization that represents,
promotes, supports, and materially advances the short
and long-term interests and goals of mayors and
officials of cities, towns, and villages across the United
States and around the world.

The cities, towns, and villages, which WAM represents,
are the unchallenged centers of commerce and culture,
and the powerful engines that drive enterprise and
worldwide economic growth. These are also the
bodies of the vital commercial and industrial centers
that produce long-term economic growth throughout
the new emerging “Global Village,” which is now the
home and workplace of more than three out of four
taxpayers, producers, and consumers worldwide.

WAM is a non-profit, non-partisan, non-governmental
global organization with a Benevolent Fund established
at the National Heritage Foundation.
                                                                                    Program Officials

Benjamin Burkes, Director General
  –   Dr. Benjamin Burks has been the Director General of the World Alliance of Mayors since 1994 and was appointed as a
      Regent to the National Heritage Foundation in 2005.
  –   Benjamin Burks has extensive experience in Foreign Policy, Economic Development, Lobbying and Management of large-
      scale national and international programs.
  –   He works closely with the current Administration, the State Department, and Congress on post cold war policies and
      programs. He is a member of the National Council for Policy Review (NCPR) as well as a member of various task forces
      for the current administration.
  –   He has held key positions in U.S. Government agencies including Commerce, Energy, Treasury, Transportation, and
      Department of Defense prior to joining The World Alliance of Mayors and has been a key speaker for such organizations
      as the American Management Association.
  –   Mr. Burks holds a Bachelors Degree from California State University Long Beach and a Masters Degree in Business
      Administration from George Washington University. He is a graduate of Harvard University JFK School of Government,
      Senior Managers in Government Executive Program and has been awarded a host of certificates of Merit.

Joel Griffing, Business Consultant & WAM Special Envoy
  –   Joel Griffing has been commissioned by the World Alliance of Mayors and Local Officials as its Special Agent and Envoy
      for its organization’s programmatic objectives.
  –   Joel is authorized to solicit and acquire projects, programs and funding for WAM’s Stimulus program, "Virtual Enterprise
      Zones", for Employment and Economic Development
  –   Expertise in Capital Mobilization, Technology Applications, Economic Development & Revitalization, Membership
      Expansion & Service, Marketing, Incentives & PR, Finance Services, Accounting & Insurance, Supply Chain Management
      & Global Sourcing, Procurement and Barter, Personal & Executive Coaching, Commercial Real Estate Development &
      Construction, Bio-Tech, IT Solutions and Communications tools, HR, Employee Benefits & Medical Records, Security,
      Waste Remuneration & Energy Conversion, Virtual Business and Consumer Malls
  –   Joel Griffing has found clients from around the world, the White House, the House of Lords, the USGA, seats on various
      Boards and Charities, Church leadership activities and speaking engagements in every place in between.
                                                 Humanitarian Forgivable Loan

In the past, humanitarian aid was limited to providing
funding for food, medicine, and shelter to both
developing and war-torn nations.
The definition of humanitarian aid has been expanded
to include projects that provide “substantial and
sustainable social and economic effort” such as:
  –   Housing: affordable, age 55 plus, special needs
  –   Educational: degree candidates, schools, job
      training, distance learning, SMB businesses
  –   Energy: fossil fuels, wind, solar, waste conversion, etc
  –   Agriculture: development and food distribution
  –   Water: purification, deselination, etc
  –   Faith-based programs: individuals, kids, families at risk
  –   Infrastructure: development and repair                      An economic development project that can
  –   Medical and health: hospitals and medical facilities,       show the fulfillment of a humanitarian need
      screening, research, etc                                    and for which there is a comprehensive
  –   Environmental: cleaning and prevention                      business plan, appropriate relationships with
                                                                  contractors and vendors and is certified to
  –   Cultural, public policy and enterprise exchange             be financially viable through the acquisition
  –   Technology: security, communications, supply-chain          of a Standby Letter of Credit, may be a
      logistics                                                   candidate for a “Forgivable Loan.”
  –   Sustainable economic development programs
                                                       Other Funding Projects

•   Schools in Texas and other Gulf states where the
    communities can’t muster the tax base to support their
    children education needs.
•   Health and educational facilities, infrastructure and
    energy projects in Puerto Rico, Costa Rica and other
    Central and South American countries. Similar projects are
    under consideration in China, Cambodia, Viet Nam and
    the Philippines.
•   Proton Cancer Treatment Centers to evolve into full
    service hospitals on Native American soil near population
    centers of 6 million so that jobs and prosperity can be
    sustained. Additional hospital projects are being evaluated
    in Ohio, Kentucky, West Virginia and Texas.
•   Affordable housing, assisted living centers or “55 and
    older” projects in FL, DC, NC, and NY in addition to
    being involved with the acquisition and development in
    Washington DC of the Hunt Place property and the
    Washington Post facility in the Southeast quadrant near
    the Capitol, Navy Yard and the new baseball stadium.
•   ”Reach The Children” in 14 international communities and
    assist BarOne Resources, a multinational faith based
    humanitarian initiative.
                                                              Application Process

The Application Process is as follows:
  1. An Executive Summary overview is required by the Loan Committee and a Reputable Accounting
     Firm. It should be a comprehensive, yet simple 15-20 page document that describes the project(s) and
     plans for its future use.
    Once the loan is approved and funded, an “arms length” administrator (e.g. Price Waterhouse), will
    require a detailed business plan that will be used as the actual blueprint for the project(s) including
    draw down amounts and schedules for disbursements, as well as insurances and performance
    bonding for contractors, etc. before funding can be allocated.
  2. The developer obtains a Bank Capacity Letter from a qualified financial institution for the value of the
     Forgivable Loan.
  3. A Non-Disclosure Agreement is signed by the developer, the World Alliance of Mayors and all parties
     involved in the financial administration and oversight of the capital project.
  4. The developer submits a completed Application Package, including a comprehensive business plan
     and a Standby Letter of Credit along with an Application Fee ($5,000.00 USD). The Standby Letter
     of Credit acts as validation that the project is financially viable and is part of our due diligence
     procedure.
  5. The developer enters into a Joint Venture Agreement with the World Alliance of Mayors and a
     financial administration entity selected for the oversight and the disbursement of escrowed funds to the
     project’s contractors and subcontractors through the completion of the capital phase. All vendors and
     contractors receiving compensation must be identified within the comprehensive plan and listed on the
     application documents.
Humanitarian Funding Program                                                                                                          Non-Governmental
Conceptual Process Flow                                                                                                               Organization (NGO)
                                                                                                                                       (manages the project
                                                                                                                                        upon completion, to
                                                                                                                                        assure sustainability)
                                 Submit application:                World Alliance of
                                 1. Non-Disclosure Agreement
                                                                     Mayors (WAM)                          Joint Venture
                                 2. Joint Venture Agreement
                                 3. Executive Summary                                                         Created
                                                                                                                                       Joint
       Developer                 4. Bank Capacity Letter*              My Business Warehouse                                          Venture
                                 5. Application Fee
                                                                                                                                        (JV)
                                     Standby Letter of Credit* (SLOC/SBLC), Line of Credit (LOC) or Bank Guarantee (BG)
                                       (Note: This never used, liened or attached, it simply triggers the funding process.)
                                                                                                                                           Sent for
                     Contractors                                                                                                           Approval
                      Must register Virtual Enterprise Zone (VEZ)
                      “storefront” to receive disbursements
                                                                                                                       Copicard, Inc.
    Issues
   “funding
                                                                           Auditing
                                                                                                               National Heritage
 instrument”                                                                 Firm
  (i.e., Bank                                                                 (i.e., KPMG)                     Foundation (NHF)
Capacity Letter)                               Accounting
                       Distributes all funds                                                                               SIMCO Corp.
                                                  Firm
                                                     (i.e., PWC)                                                              Once approved:
                                                                                                                              1. Process is initiated with banks
                                                                                                                              2. Comprehensive business plan
                                                                                                                                 to include draw down amounts
        Guarantor                       1. Bank Remittance Guarantee of Return* is
                                                                                                                                 and schedules, insurances,
       (Bank or Individual)                Issued (aka Cancellation Letter, so               World Bank                          performance bonding for
                                                                                               (i.e., Credit Suisse)             contractors, etc.
                                           SBLC/LOC/BG is never at risk.)
                                                                                                                              3. Formal closing
                                        2. Matching funds are deposited into escrow
                   Escrow                  account.

                                                                                                                   * Sample PDF documents also provided as a
                                                                                                                   part of this application package.
                                                                                                                              Occurs simultaneously
                                                              Key Contacts



       Christina M. Rosario
          Business Consultant
  (973) 789-1527 • wamfunds@ptd.net

         Ralph C. Wunder
         Public Affairs Consultant
(570) 994-6222 • ralph@theimpactteam.net



                                            The World Alliance of Mayors
                                                        Benevolent Fund
                                             Attn: Joel Griffing / Funding Committee
                                                   1421 K Street NW, Suite 350
                                                     Washington, D.C. 20005

                                                           www.ourwam.org
                                           www.ourwam.org/index.php?pr=Humanitarian_Funding
        APPENDIX
Frequently Asked Questions
                                                                                           Executive Summary
Is there a template or suggested format for the initial business plan submission?
  I.     Cover – Name of Project, Street address and mailing address, Business Telephone, Name and title of Principal(s), Prepared by, or person to
         contact, Submitted to (Loan Committee), and Date.
  II.    Introduction to Business Plan and Request for Funds – The introduction should be a summary to the entire
         package, emphasizing its high points, keep it short and simple. This section should prompt the loan committee to make their decision as to
         whether or not to lend the money solely on the basis of your introduction. The introduction will give the committee a positive idea of the
         business project(s) before they are presented with potentially confusing facts and figures. Tell them exactly what you want and keep it short
         and be specific..
  III.   Table of Contents
  IV.    Principal(s) – Participants and their titles and individual expertise. Please provide a bio on the key participants. To make this section
         graphically clear, you may want to start with a simple organizational chart that lists specific tasks and show, who will do what, indicated by work
         flow and lines of responsibility and/or communication. Then go on to detail the personal history of principals and related work or
         experience. Identify professional resources that you plan to use.
  V.     Humanitarian Description – Current Economic Profile, Desired Economic Profile, Description of Substantial and Sustainable Social and
         Economic Effort for this project, Describe the 501c or equivalent that will be participating, Describe the future plans for the project(s) after
         completion. The Recipient and/or end-user must be a 1) government, 2) Non-profit organization (in the U.S.A., an entity entitled to the benefits
         of a 501c, (3) of the Internal Revenue Code of 1986, as amended, or a foreign equivalent), or 3) not-for-profit organization which is organized
         and conducted for the public benefit and operated primarily for charitable, civic, education, religious, welfare or health purposes, which is
         sponsoring or developing the project for the “better or common good of its citizens or members.”
  VI.    Major Elements – Describe the major elements. If a construction loan, description of construction desired (i.e. if affordable housing
         describe if it is single or multi dwelling, community center, etc.). Describe the Infrastructure required. Provide examples of the kinds of assets
         that are desired within the infrastructure being built; i.e. telecommunications, equipment installed, etc.
  VII.   Financial Plan – Costs, Describe estimated costs, describe how costs were determined, estimate time frame for each phase (estimated
         start date & finish date), and identify risks. Clearly this is the most critical section of your business plan is the Financial Plan. In formulating this
         section, you should establish vital schedules.
  VIII. Guarantee – Describe how the guarantee will be provided; who is providing the Guarantee. Before contracts are negotiated and agreed, the
         sponsor or borrower must provide in Irrevocable Standby Letter of Credit or Irrevocable Bank Guaranty, issued for the full amount of the
         proposed loan plus annual interest and fees during the construction or implementation period. The funding entity and the borrower will enter
         into a Loan Agreement and related documentation. It is the Guarantor’s sole and exclusive responsibility to demonstrate capacity to provide the
         Irrevocable Standby Letter of Credit or Irrevocable Bank Guaranty.
  IX.    Appendix – Documents and supporting information belong here. Industry studies or demographic data, copies of any relevant and favorable
                                                                 Standby Letter of Credit
What is a Standby Letter of Credit?
  A financial institution, or wealthy individual, may issue a Standby Letter of Credit to guarantee obligations under a contract or
  agreement. The term “standby” reflects the expectation that you will satisfy your obligations to the beneficiary according to the
  terms of your contract or agreement with the beneficiary and there will be no need for payment under the Letter of Credit.
  However, should you not fulfill these obligations, or should a dispute arise between you and the beneficiary, the beneficiary will
  be paid by the issuer under the Standby Letter of Credit by the beneficiary meeting the requirements for payment specified in
  the Standby Letter of Credit.
  The issuer of the Standby Letter of Credit must make payment if the beneficiary meets the requirements for payment. If the
  issuer makes payment under the Standby Letter of Credit, you are obligated to reimburse the issuer for the amount the issuer
  has paid plus any related fees and expenses. Because a Standby Letter of Credit requires payment by issuer if the beneficiary
  meets the conditions for payment, it is considered an extension of credit and must be issued under a line of credit or backed by
  acceptable collateral.
Why do I need to obtain a letter of credit?
  Projects funded by the Forgivable Loan Program utilize hundreds of millions of dollars donated by individuals and organizations
  to private and public foundations for humanitarian purposes. The Standby Letter of Credit acts as a guarantee that the project is
  financially viable and economically sustainable because it has been deemed so by the issuer of the Standby Letter of Credit.
  The charitable funds are therefore protected from losses which might result from investments made in projects which are
  speculative or too risky for a financial institution to guarantee. A Standby Letter of Credit requires due diligence by a financial
  institution independent of the World Alliance of Mayors and is a further guarantee that the funds donated will be used in a
  responsible manner. The developer’s Standby Letter of Credit is never drawn upon and is returned to the developer ten days
  after its period expires, which in most cases is after one year and one day.
What is the difference between a Standby Letter of Credit and Commercial Letter of Credit?
  A Standby Letter of Credit is used to guarantee payment in the event of an individual’s or company’s default or non-
  performance under a contract. This differs from a Commercial Letter of Credit which is commonly used in international trade to
  ensure payment for the purchase of goods, provided the seller meets the terms and conditions specified in the Letter of Credit
                                              Standby Letter of Credit, cont’d
How long does it take to issue a standby letter of credit?
  Approximately 4 to 6 business days from the time your completed application is received. To avoid issue delays, you and the
  beneficiary should agree to the terms of the Standby Letter of Credit, the types of documents and exact wording for statements
  or certificates required before submitting the application to the prospective issuer.
What fees are generally associated with a standby letter of credit?
  There is a commission fee for the issuance of the Standby Letter of Credit, based on the dollar amount. An amendment fee is
  typically charged for any changes you may make to the Standby Letter of Credit (including changes in wording or increases in
  amount) after it is issued. An automatic renewal fee if the Standby Letter of Credit contains an “automatic renewal” clause,
  payable annually at time of renewal. A cancellation fee if the Standby Letter of Credit is canceled prior to its expiration (which is
  subject to the beneficiary’s consent). A negotiation fee if the Standby Letter of Credit is drawn upon. Any out-of-pocket fees
  such as express mail, courier or cable and telex fees. Fees and charges of the advising, confirming or negotiating bank, if any.
  Fees for consulting on issues in standby Letters of Credits that are no longer ordinary or routine in nature, exceeding the
  minimum time provided in a Schedule of Fees.
How do I cancel a standby letter of credit?
  The Standby Letter of Credit cannot be revoked by you or issuer acting alone. The Standby Letter of Credit can only be
  canceled if the beneficiary returns the original to the issuer along with a letter signed by an authorized representative of the
  beneficiary agreeing to the cancellation and releasing issuer from any future liability. A cancellation fee will be charged.
When do you return the collateral securing my reimbursement obligations under the standby letter of
credit?
  The collateral for a Standby Letter of Credit expiring in the U.S. is released 10 business days after it expires. The Business
  Lending Division’s Collateral Department will notify the branch when your collateral can be released.
                                                                                             Joint Venture
Why is a Joint Venture required? Do I lose control of the project and my interest?
  In order to be the legal recipient of charitable donor funds originating from private and public foundations to be transmitted to the
  capital project through the World Alliance of Mayors Benevolent Foundation, a new non-profit foundation must be established.
  The newly formed foundation would be dedicated to the capital construction phase of the project being funded by the Forgivable
  Loan.
  This is accomplished through a Joint Venture Agreement. A board of directors of the new foundation is formed with the
  developer, the World Alliance of Mayors and the entity providing financial administration and oversight. All are represented with
  equal voting privileges. An account is created in the name of the Joint Venture at the bank where the funding for the capital
  project is to originate. All funds attributable to the Joint Venture are distributed from this account. The ultimate funding for the
  projects will come from an escrow account at the bank that has issued the Standby Letter of Credit. An appropriately
  experienced accounting firm will be retained to do the draw-downs itemized in the comprehensive business plan through an
  online banking interface.
  When all the administrative processes are in place, the Joint Venture’s bank will issue a “confirmation letter” on the behalf of the
  Joint Venture enabling it to obtain a Bank Guarantee, for a year and a day, from Credit Suisse* in exchange for the developer’s
  Standby Letter of Credit. This removes all risk from the developer’s Standby Letter of Credit. Reasonable bank or business
  expense for such instruments is reimbursable.
  Once Credit Suisse issues the bank guarantee to the Joint Venture, the total funding for the capital phase of the project is
  transferred from the World Alliance of Mayors Benevolent Fund and placed in escrow at the bank that issued the developer’s
  Standby Letter of Credit, for draw downs in accordance to the itemized list submitted in the application package.
  Draw downs continue until the capital phase of the project is completed. At the end of the capital phase, the project will have
  been paid for without the need for repayment; the Standby Letter of Credit will have been returned; the accountant’s satisfactory
  audit will have validated the funding program and the World Alliance of Mayors will then provide a letter that certifies project
  completion.
  Upon completion, the Joint venture partners continue oversight of the infrastructure funded through the Forgivable Loan Program
  so that it remains in place for the purposes for which it was originally funded. The Joint Venture contracts with the project
  developer, or a selected management team, to run the activity of the project going forward. The Joint Venture does not take a
  financial interest in the operational phases of the funded project. The project developer, or the selected management team, has
  the freedom to commence the commercial operation of the project in accordance with its originally funded purpose.
                                                                                   Application Fee
Why is there an Application Fee involved?
  The Forgivable Loan program regularly funds capital projects in excess of $500 million (USD). Because of the large sums
  involved and the complexity of very large economic development projects, the World Alliance of Mayors retains the services of
  several reputable financial institutions and business consultants who have the necessary experience and judgment to provide
  the appropriate level of professional advice as to the integrity and viability of the application.
  The fee of $5,000 per application is to cover the cost of the professional fees incurred by the World Alliance of Mayors in the
  review and consultation process. It is also to discourage the submission of speculative projects that cannot be funded because
  they are not substantive, viable or sustainable or have no humanitarian element which would merit financial assistance through
  a Forgivable Loan program.
  NOTE: The application fee will be returned to successful applicants upon the completion of the application process and
  approval thereof.
                                                                        Useful Links
Where can I research additional information?

          Professional Services         Business Partners               Humanitarian Links
          www.kpmg.com                  www.usbenefits.net              www.un.org/millenniumgoals
          www.pwc.com                   www.stanetwork.com              www.ifad.org
          www.credit-suisse.com         www.nhf.org                     www.oecd.org
          www.thaneycpa.com             www.mybizwarehouse.com          www.undp.org/mdg
          www.ybw-usapayroll.com        www.yourbankpal.com             www.unhabitat.org
          www.adr.org                   www.thehopecollection.com       www.who.int/mdg/en
                                        www.kerridgeinternational.com   www.un-ngls.org/mdg

				
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