Harnessing Annuity Income for Greater Good

Any entrepreneur will tell you that what you are looking for is an annuity business, something that makes money while you sleep (or play golf). I have been an entrepreneur all my adult life and I have had countless lunches and coffees where fellow entrepreneurs get together and discuss their next great idea, the one that will stop billing based on time and start generating annuity revenue streams. Few (if any) of these ideas have amounted to anything for the simple reason that it is difficult. If it were that easy to come up with a business idea that produces predictable and scalable annuity cash flows, then we would all be doing it – but in reality, very few of us are.

When I started working at Different Life, it took me about three months to realise the enormous power of a growth engine like a life insurance business. I have had my fair share of businesses and, to be honest, all of them start the month like it was day one – it is a constant slog to bring in projects to keep the cash machine moving. Life insurance, on the other hand, is very different: each month builds on last month’s successes, and each year builds on the last. As a business engine, life insurance is about as good as it gets.

So, what if we could leverage this growth engine for philanthropic good and create a scalable annuity stream for the good of South Africa? That would be awesome, right? Well that is exactly what Different Life has done and it is all made possible through the Different Donation.

So how does the Different Donation work? The Different Donation allows all Different Life customers to donate their first payment, and every subsequent anniversary payments, to a philanthropy project of their choice on Different.org. Now I know we go on about this, but it is really extremely powerful. By year 2, the Different Donation will start making a significant impact, year 3 will be even better and by year 7, the effect of the Different Donation will be downright staggering. Let me explain.

In year 1, Different Life facilitated R1 million in Different Donations. In year 2 we facilitated  R3 million, R1 million in anniversary payments and R2 million in first time Different Donations. The cycle repeats and in year 3, Different Donations will reach an estimated total of around R8 million. So by year 7, at reducing growth rates as the business approaches maturity, the Different Donation will be funding projects to the tune of R28 million per year, and this number will continue to increase. Now that is something to feel good about.