Business Idea #150 – Direct Cy Pres Funds

by Byron on August 2, 2012

The Problem:

Non-profits everywhere are wondering how to get some cy pres funds.  Courts everywhere are wondering how best to distribute cy pres funds.  What a dilemma.

The Business

Helping courts direct cy pres funds and helping worthy recipients obtain cy pres funds.

You would need to track litigation with possible funds and build an army of non profits seeking funds.  You’d be doing what the Internet does best… hooking up two people who need to know each other.

Doableness

Building an army of people who want your donated funds won’t be hard.  I guarantee it.  Getting the court – those with the funds – to distribute to you and your clients is a little harder.  Especially because the revenue model is a percentage of the funds you secure for your clients.

Other than that sticky issue, this is a very doable idea.  It will take a lot of knowledge, excellent systems for retaining and disseminating the knowledge, and excellent communication.  It will also take passionate people.  Part of cy pres funds are getting the funds to the right place.  Doing it right matters.

My Thoughts

Anytime you put a for-profit, money making venture in the middle of a completely not for profit situation you have issues – real or perceived.  For example, in this situation, you are a broker.  What if a court or a client doesn’t want to pay?  Do you not distribute the funds to them?  What if they are the best recipient?

Might the court let you “represent” it in finding recipients?

Right now, it’s often the defendants finding their own recipients.  Take a look at this story from Fortune/CNN involving Google and Facebook.

I am uncertain how big the entire marketplace is, and that may be the issue.  With some quick searching, I wasn’t able to find anything reliable.  If there are $10M distributed annually, you have a problem.  If there are $100M worth of funds, you can squeeze a business out of it.

I would brand a company and a website.  Then I would run a blog with the url cypresfunds.com.  You can buy it from me.

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