ASAP: AIDS Shelter Alliance Partners

ASAP ASAP ASAP ASAP ASAP AIDS Shelter Alliance Proposal

Apocalypse Now
For the second time in 700 years, a disease threatens to wipe out 25 million people. Unless the AIDS pandemic that has taken 22 million lives and left 13 million orphans is slowed, it will do what an atomic bomb could not: kill off an entire generation. That’s why a group of Harvard professors is promoting an aggressive plan to fight AIDS in poor nations.
The Indianapolis Star, April 17, 2001

During the past 12 months
Value of real estate sold in the US last year was over $1 trillion
Mortgage financing, including refinancing, approached $2 trillion
During the same period, the US government has authorized just $200 million to the Global AIDS Fund
In 2001, the Global AIDS Fund has amassed $1.5 billion from all sources, well short of it’s goal of raising $7 to $10 billion
During this time, 3 million people died of AIDS, and the number of orphans rose by the same figure
8,300 people have died everyday for the past year from AIDS

A Generation of AIDS Orphans
26 million HIV positives in Africa = 65% of 40 million worldwide
16 million AIDS orphans, up from 13 m last year
40 million AIDS orphans predicted by 2010
1 orphan for every 150 people now on the planet
1 new orphan every 11 seconds
Half of all orphans being raised by other children

Translating the Scale of the Problem
Currently 16 million AIDS orphans
Twice the size of New York and
Larger than Afghanistan
40 million AIDS orphans predicted by 2010
Roughly equivalent to the entire population of US public schools

Africa Not Only Area at Risk
India on trajectory to pass Africa by 20??
Get exact figures from conference at Harvard held during World AIDS Week, December 2001
UN estimates that China may have as many as 20 million HIV infections by 2010
New York Times, August 24, 2001

Why Target Real Estate in US?
$1 trillion dollars in annual sales from residential real estate
Bigger than the soft drink industry
On par with the telecommunications industry
Half the size of the computer industry
$110 billion fees annually / $60 billion in RE commissions
Structural changes = $30 billion CONSUMER savings
ASAP goal: redirect some of those savings to AIDS orphans

Why Real Estate in US? Part 2
#1 wealth building vehicle for the average American
Value of residential estate = $11 trillion in 2001
Value rising to $25 trillion by 2010 -- Fannie Mae
10,000 times US’s fundraising goal of $2.5 billion annually
25,000 residential closings every day in the US
3 closings for each person who dies of AIDS every day
Goal: ask parties to each closing to make donation to AIDS orphans

Orphans as Real Estate Comps
Century 21 marketing slogan @ 1999: “We sell a home every minute.”
AIDS orphans are increasing more than 5 times that rate in Africa alone
3 million new orphans per year till 2010
1 new AIDS orphan for every 2 homes sold in US
3 new AIDS orphans for each new home built in US

Housing Needs: African Orphans Alone
80,000 boarding schools / orphanages will be needed over next 10 years
500 children per school
Compare to number of apartments built in US with more than 500 units in past decade
Compare to number of schools being built in the US in coming decade

Alternative Shelter Solutions
Presently half of orphans being raise by other children
Hybrid orphanage / boarding school
Rev. Eugene Rivers, leading advocate
Two non-institutionalized approaches
Orphans placed with extended family
Community-based alternatives (UN-Habitat)

Cost of Alternative Solutions
Annual cost per child
$$$$ per child in orphanage/boarding school
$$$$ per child in extended family
$$$$ per child in community-based alternative
Grand total needed annually

Something a
little short of a miracle
will be required to cope with the enormous
battle ahead and for
Sub Sahara Africa in particular,
only a concerted international effort is
going to have any kind of impact.
Towards Earth Summit 2002
Social Briefing #1:
HIV / AIDS Briefing Paper

Call to Action
Nothing short of an industry-wide response will be adequate
Develop voluntarily campaign to encourage consumers to donate to global AIDS trust fund
Funding goal for Global AIDS Fund: $7 to 10 billion annually, $2.5 -$3 Billion from US
Only $200 million pledged by US in 2001
Multiple sources of real estate related revenue

Potential RE Revenue Sources: 1st Tier
Donate portion of e-commerce savings on real estate transactions
Donate a portion of the sales price
Donate portion of capital gains on sales of existing homes
Donate portion of real-estate related inheritance
2nd & 3rd tier proposals in Appendix

1. Donate Part of Savings Online
$30 billion annually in consumer savings from industry restructuring from e-commerce (McKinsey & Co, 1998)
$10 billion from reduced mortgage fees
$10 billion from reduced real estate commissions
$10 billion in new efficiencies from transaction managers
Developed partial database of savings in each area
Ask their clients to donate part of savings

2. Pledge Part of Sales Price
Value of properties rising from $11 trillion to $25 trillion by 2010--Fannie Mae
$1 trillion in sales in 2001, rising to $2.5 trillion annually by 2010 = 0.1% of US funding goal
Goal: Ask sellers to pledge a small amount of their sales price before putting their home on market
Alternatively, challenge full commission RE brokerages to make the donation themselves
Ask eBay to be lead player before they launch their new $695 flat fee MLS listing package this Spring

3. Donate Part of Capital Gains
Change in tax law now shelters the first $500,000 from capital gains tax, up from $250,000
Between 1995 and 2000, sellers realized $700 BILLION in capital gains
$200 billion in 2000 alone--nearly 100 times US Global AIDS fund
Home equity increased $7 trillion in last 5 years (confirm?)
Develop legislation to allow sellers to contribute part of the capital gains on the sale of their property for tax credit
Lincoln, Massachusetts considered a voluntary capital gains tax

4. Donate Fraction of Inheritance
Baby boomers already inheriting $1 trillion per year
$10 to $41 trillion in inheritances by 20?? (check BC report)
Work through bank trust departments, estate planners and estate attorneys, rather than real estate brokerages
Inherited wealth will skyrocket under new tax laws
Exemption level rises from $1 million to $3.5 by 2009, while tax rate declining from 50% to 45% by 2009
Estate tax phased out all together in 2010, then reverting back to 2001 (confirm)

Summary of Tier 1 Revenues E-commerce savings: $30 billion annually or 10 times US fundraising goal Sale of existing homes: Pledge part of $1 trillion in annual sales Voluntary capital gains: $200 billion annually or 100 times US fundraising goal Inheritances: $1 trillion per year, 400 times US fundraising goal

Preliminary Interest in ASAP
Rebate providers : MonsterMoving.com (9 mil registered users), LendingTree.com (7,000 agents), ZipRealty.com
Listing sites : Microsoft’s HomeAdvisor.com (3 million visitors per month), Yahoo! Real Estate
Real estate media : Inman.com (syndicated to XXX sites, including CBSMarketWatch, Yahoo!)
State / Local Associations : California Assoc. of Realtors, Greater Milwaukee Assoc. of Realtors
Sites with International audiences : Immobel.com (10 languages, South African partner w/ 41 franchises); IRED.com / International Real Estate Digest, (Best of Forbes 2001), Monstermoving.com

Phased Implementation
Phase 1: Begin ASAP
Revenue #1: Existing rebate providers
Revenue #2: Pledge a portion of sales price
Phase 2: Begin ???
Revenue #3: Inheritance under new estate laws
Revenue #4: Voluntary capital gains tax
Phase 3: Begin ???
Explore 2nd & 3rd Tier revenue opportunities

#1 Target: Existing Rebate Providers
Targetting companies already generating millions in consumer rebates or other savings
LendingTree.com : 7,000 agents, partnered with Costco, already offering $1,000 rebate
$3 million in rebates in 2001 (confirm?)
Now exclusive referral for Microsoft’s HomeAdvisor, leading RE web site w/ 3 million visitors / month
Monstermoving.com : Offering referral rebate up to $1,000, international audience
ZipRealty.com : $5,000 average rebate

Why Target Rebate Providers?
Not asking real estate companies to donate anything out of their shrinking profit margins, but asking their clients
Ask consumers to donate part of rebate, discount, or savings, at NO expense to themselves
Unique opportunity to generate revenue without asking company or consumers to pay anything out of pocket
Assumption: Because they are not being asked to pay anything out of pocket, corporate partners will be eager to join coalition to demonstrate they are good world citizens

Interfaith Implementation Strategy
Focus on opportunities to partner faith communities in the US with faith communities in Africa, particularly those operating orphanages or providing shelter subsidies to extended families or community groups
Build on base of infrastructure of existing housing groups, Habitat for Humanity, GAIA, Catholic Relief Services, etc.
Tap into President’s office of Faith-Based Initiatives, and it’s $100 million budget
GAIA and other interfaith groups already hope to raise $100 million to fund their efforts, ASAP could expedite that goal

Demonstration project(s)
Attempt demonstration project in Greater Boston before attempting to expand to other parts of the country, or internationally
Could also try running one or more other regional demonstration projections:
West coast
Mid-west

Key Success Factors
High credibility spokesmen
High credibility implementation partners
Endorsements inside & OUTSIDE industry
Coalition approach involve lenders, builders, & vendors, not just RE brokers
Target RE consumers, not agents

Key Success Factors
Build coalition with eye towards the industry 2 years from now, not the traditional players from the past
Run parallel for profit effort if non-profit gets bogged down in industry politics?

Timeframe: Overall
CANCELLED BY 9/11/01
9/21/01: Announce ASAP at UN Special Assembly on Children
4/02: Drafted proposal in response to Call for Papers
5/02: Made presentation to Rockefeller Foundation
6/02: Hired by UN-Habitat as consultant
7/02: Client delivered keynote at Connect 2002 SF
9/02: Reopened retail storefront in Cambridge
9/03: Entered ASAP into MIT Ideas Competition
ASAP: Establish working group?

Timeframe: Industry events in 2006-07
4/18-24: Online Real Estate convention
32,000 people from 38 countries in 2003
4/21-24: REIPA Convention, DC / VA
5/1-15: NAR Mid-Year Legislative Meeting & Expo, DC
Spring: Consumer advocacy related conferences
5/24: National Assoc. of Real Estate Editors, Houston
11/5-8: NAR Annual Convention, Orlando
25,000 agents from 50 countries
12/1: World AIDS Day, 2004

Next steps (edit by audience)
Recontact interested parties from RE summit
Invite to join steering committee
Meet with Rev. Eugene Rivers in Boston re: options for providing shelter subsidies for AIDS orphans
Ask CID to review & present to GBCAIDS
Get more feedback from Inman News
Present concept plan to global AIDS fund, UNICEF
Explore interfaith coalition building opportunities with GAIA

Summary: House AIDS Orphans ASAP
Changes in the real estate industry present a multi-million dollar fundraising opportunity for AIDS orphans
Seed industry-wide respond to the AIDS pandemic
Focus on providing shelter for AIDS orphans, an estimated 40 million by 2010
Target existing rebate providers to jump start ASAP
Match faith communities in the US with faith communities caring for orphans in Africa

The Defining Moment of our Age
I’ve come here to ask for your help. This is a big problem. We need some smart people working on it.
I think this will be the defining moment of our age. When the history books (that some of you will write) make a record of our times, this moment will be remembered for two things: the internet (probably), and the everyday holocaust that is Africa. Twenty-five million HIV positives who will leave behind 40 million AIDS orphans by 2010. This is the biggest health threat since the Bubonic Plague wiped out a third of Europe.
Harvard commencement address by U2’s lead singer, Bono (June 6, 2001)

Our response to the AIDS pandemic will be the measure of our humanity. our humanity. our humanity. our humanity.
Richard Marlink,
Harvard AIDS Institute,
New York Times, 6/7/01

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ASAP: AIDS Shelter Alliance Partners

by Bill Wendel on Nov 05, 2008

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