FundAmerica - The Business

The Business

For the annual cost of $100, Members received their FundAmerica Membership and their monthly savings were automatically tracked and reported to them in their Member’s Quarterly Magazine. This state-of-the-art, customized, printed magazine — the first of its kind ever to be produced by any organization in the United States — included a personalized statement, much like a monthly credit card statement, detailing Members’ monthly purchases through FundAmerica service providers and the attendant ‘rebate’ of discounted pricing. benefits as an individual Member began being demonstrated — in many cases, worth well beyond the annual cost of membership — FundAmerica achieved critical mass, and professionals from all walks of life began associating with the organization. With FundAmerica’s commitment to proper sales procedures, highquality service and uncompromising accuracy of Member purchase activity — demonstrated by the fact that the company refused to open more than one state at a time — financial and business sector leaders recognized the validity of the Membership. Certified public accountants, financial planners and mortgage bankers began offering Memberships to their clients and applauded the ‘forced savings accounts’ which they viewed as the quarterly Member rebate disbursements into retirement annuities. Real estate agents were giving away an annual Membership to their new homebuyers, and celebrities began inquiring as to how they might become involved. Arthur Laffer, noted supply-side economist and an economic adviser to former President Ronald Reagan, joined FundAmerica as a Member. After utilizing his Membership for several months, he was so impressed with the benefits and rewards of being a Member that he became a Member of the Board of Directors and appeared in a FundAmerica promotional videotape in which he spoke about the benefits and timeliness of participation in FundAmerica. A full twenty years before a young entrepreneur named Jeff Bezos decided that people would rather purchase their reading materials online than visit their local book store, FundAmerica began assembling consumers together in a virtual world without the aid of the Internet. Bezos, like Edwards, knew that profits would eventually come if the services and product offerings were first-class, and yet, they both understood that the first four to five years of a revolutionary concept would mean hard work building the solid foundation, and re-investing revenue streams in forging a loyal customer base and excellent relationships with providers. Additionally, behind the scenes, and in an attempt to mirror the success FundAmerica was establishing with its new, integrated digital network, the framework for the Discover Card was formed in 1987 by the Sears Financial Network. In time, this unique credit card would compete with the FundAmerica MasterCard program and be a direct rival to the VISA and MasterCard franchises worldwide.

These rebates were automatically calculated by the service and product providers and transferred directly into a Member Trust Account — the receipts and accounting of this Member Trust Account were audited by certified public accountants each and every month to verify the accuracy and safety of these Member-owned funds. Members then had the option, every quarter, of receiving their rebates, once they had reached $250 or more, either in the form of a check or as an individual Retirement Annuity from one of the nation’s oldest insurance companies, Mutual Benefit Life Insurance Company. When Mutual Benefit Life was sold, annuities were transferred to Lincoln Benefit Life, another well-established institution and a Member of the Allstate Financial Group. Sales of the annual Membership through Independent FundAmerica distributors soared, and Member purchases through the Membership skyrocketed as individuals realized the world of savings that was available to them through this unique and financially rewarding concept. With Fortune 100 service providers regularly verifying the consistently growing group purchases of FundAmerica Members, other mainstream organizations wanted to become involved in this remarkable ‘virtual store concept’. Basically what Saul Price of Price Club had made so successful with his brick and mortar super-stores throughout the Western United States, FundAmerica was doing with a Membership card, buying clout and a sophisticated software tracking system. Retailers and financial institutions began to take notice, and it was then that FundAmerica and MBNA America, the country’s largest affinity card provider, reached an agreement to provide qualifying FundAmerica Members with a FundAmerica MasterCard. Now, with the sophistication of FundAmerica’s back-office tracking software and integrated Trust Account audit streams, Members would soon have access to a much broader world of savings as FundAmerica negotiated additional group buying agreements with other national chains, institutions and product and service organizations. Within the first 120 days of its release, FundAmerica became MBNA America’s fastest-growing affinity group, outpacing new member signups of such organizations as the American Automobile Association and Ducks Unlimited. Indeed, the sky appeared to be the limit. Even though FundAmerica was only operating in the states of California, Arizona, Colorado, Oregon, Texas, Utah, Washington, and Florida, it began attracting major attention. As word of the income opportunity as an Independent Distributor marketing Memberships to individuals and local and national groups grew, as well as the tremendous savings

Realizing the incredible promotional benefits of an integrated member savings portfolio, VISA, MasterCard and Discover Card launched their own versions of the rebate programs, offering tiny percentages to cardholders on their purchases. This revolutionary concept was now adopted by leading financial institutions around the world.