How a Charitable Tontine Could Work in Payson
An old idea with a new purpose
Most people in Payson have never heard the word “tontine.” It sounds like something from Victorian banking or an old Western novel, but the concept is simple—and surprisingly powerful when applied to community good.
In a town like Payson, where retirees, volunteers, and civic-minded folks make up such a large part of the community, a tontine could become a creative way to fund local needs for decades.
What Is a Tontine?
A tontine is a financial arrangement where:
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A group contributes money into a shared pool.
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The pool is invested and generates returns over time.
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As members pass away, their shares stay in the pool, increasing the benefit for those who remain (or, in a charitable model, increasing the benefit to the town).
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When the final member passes, the remaining principal goes to a designated purpose.
Historically, tontines funded everything from bridges to orphanages. Think of it as a longevity-based community endowment.
A Modern Twist: The Payson Charitable Tontine
Instead of a “last survivor wins” structure, a charitable tontine keeps the focus on community benefit.
Members would:
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Contribute a one-time amount
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Vote annually on charitable distributions
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Leave their principal invested
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Know their contribution becomes a legacy gift for Payson
Charities benefiting might include:
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Library programs
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Payson Humane Society
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Firewise initiatives
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Youth arts and sports
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Senior assistance programs
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Trail and park development
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Rim Country educational scholarships
Two Ways Members Could Be Rewarded While Alive
Traditionally, tontine members received all the investment payout as older members passed away. A charitable tontine takes a different approach, but there are two ways to structure member benefits while maintaining the charitable core.
Option 1: Pure Charitable Tontine
All investment earnings go directly to Payson charities each year.
Members receive no personal income, but their contribution grows into a permanent community gift.
This is the cleanest and most charitable form.
Option 2: Charitable Tontine With Annual Member Return
This is the alternative you asked to include—and it’s a smart bridge between personal and communal benefit.
Under this model:
✔ Each member receives the annual investment return on their own share
For example:
If a member contributed $5,000 and the fund earns 5% that year, they receive $250.
✔ The principal (“the capital”) stays in the tontine
They can enjoy the yearly earnings for the rest of their life, but they cannot withdraw the principal.
✔ When a member passes away, their principal does not leave the tontine
It stays in the pool, increasing the charitable power for future years.
✔ The charitable distributions grow over time
As members pass, their capital continues working for the community.
This version offers:
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A modest income benefit to members
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A strong long-term gift to Payson
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More incentive for people to join
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A predictable, steadily growing charitable impact
It’s a win-win structure.
Example: How It Would Work in Payson
Let’s imagine a Payson Tontine with the dual-benefit option.
Initial Setup
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100 members each contribute $2,500
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Initial pool: $250,000
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Invested at a conservative 5% return
Annual Payouts
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Each member receives 5% of their own contribution each year
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A $2,500 share pays $125 annually
Charitable Distributions
Members could vote to donate:
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A portion of the pooled return
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Flat amounts each year
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Growing amounts as the pool expands due to deceased members' shares staying in the fund
After Members Pass
Their $2,500 stays in the fund forever.
The annual charitable pool increases each time, creating a snowball effect that could eventually fund significant community projects.
Final Gift
When the last member passes, the full fund—possibly $500,000 to $1,000,000+—goes to the designated charity or endowment.
A long-lasting legacy for Rim Country.
Why Payson Is Especially Suited for This
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Older population with interest in legacy
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Strong volunteer culture
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Deep civic pride
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Local charities that need stable, long-term funding
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Community frustration over inconsistent town priorities
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Many retirees wanting to “leave something behind” without giving up their assets right now
A tontine leverages all of that into something meaningful.
Legal and Structural Notes
A Payson Tontine could be set up as:
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A 501(c)(3) foundation
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A charitable remainder trust with tontine rules
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A special fund inside the Rim Country Community Foundation
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A standalone local endowment
Members would sign an agreement clarifying:
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No withdrawal of principal
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Annual payout rules
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Voting procedures for charity distributions
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Final gift designation
Simple, transparent, and fair.
A Legacy for the Rim Country
At a time when Payson debates every tax increase, pool project, and bond measure, a tontine offers something rare:
A way for citizens—not politicians—to directly shape the future.
Everyone puts in a little.
Everyone gets a little income.
The town gets something permanent.
And someday, a major charitable gift bears the names of the ordinary citizens who built it.
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