Technically a portemanteau, "loanation" is comprised of the
words "loan" and "donation." Loanations are
hybrid for-profit/not-for-profit transactions that are at the root of the microfinance and
new philanthropy movements.
People either lend money directly for charitable causes, or indirectly to donors, who are inclined to leverage their own donations, or simply borrow to donate. Contrarily, a loanor (or "loanator") may borrow at a low
rate for a long term, donate all or most of the loan proceeds, and use the applicable tax benefit in a consolidation arrangement that either pays off higher interest yielding debt, or invests the tax benefit to strategically pay off the debt, most often profitably, using the time value of money.
Let me get this straight. A nice girl like me is interested in making a loanation to support a good cause, and then benefits too,
cuz either the donor or the donee has gotta pay me back...within, say ten years, and with a
little interest even? Who needs a tax
break for a donation when you can make a profitable loanation? Converting debts into donations, by combining loans with donations.
