GENEROUS AND DEVOTED alumni often wish to give something back to the GSB in return for the rewards of their education. One way to do so is through a planned gift. Such gifts include bequests and a variety of charitable life income plans.

Both have significant advantages. Bequests to the university help reduce estate taxes, and for some people, willing assets after their death is the only way they can make a significant contribution. Life income gifts allow the donor to give something back to themselves as well as the university. In addition to an immediate charitable tax deducation, the donor can often retain or even increase the return from an asset through such a gift. Three examples demonstrate the power of planned gifts.

The simplest and perhaps best-known form of planned gift is a bequest, like the one from
Jim Powers, A.B. ’50, M.B.A. ’53. Powers remembered with gratitude how his Chicago education shaped his life, and planned for years to will a portion of his assets to the GSB upon his death.

Powers, an Alabama native who enjoyed a long career as a certified public accountant, died in November, 1997. This spring, his family returned to campus to plant a tree in his memory and present the GSB with a $50,000 check.

His university and GSB experiences gave Powers an education, a career, lifelong friends, and his wife, Dorothy. They met while she was pursuing a master’s degree in bacteriology and married on campus in 1953.

"The University of Chicago, and the business school, really opened up the whole world to him. There was not an intellectual tradition in his family [so] his exposure here was just wonderful," his wife recalls.

He joined Peat Marwick and handled major accounts like J.C. Penney and Singer sewing machines, ultimately retiring as partner in charge of KPMG. He remained involved with the school as an active alumnus and fundraising volunteer. He was proud when his daughter, Victoria, chose to attend Chicago and earned her bachelor’s degree in 1980. He also maintained friendships with the southern boys he’d bonded with while suffering together through cold Chicago winters.

"He found work that he loved, and the university steered him there. And for that he was always very grateful. He remembered with gratitude how it shaped his life, and he wanted to share some of it, give it back to students coming after him," his wife says. "It was probably 20 years ago that he started talking about leaving a gift to the school. He stipulated that the money could be used in any way Professor [Sidney] Davidson (then Dean) saw fit." His bequest was fully deductible for estate tax purposes.

Robert Appelbaum, Ph.B. ’47, M.B.A. ’50, decided to get more mileage from his individual retirement account by naming the university as the beneficiary. The gift was wise estate planning, he says.

"My wife and children are taken care of," Appelbaum explains , "and my children would only get about 22 cents on the dollar after taxes" from anything left in the IRA. "Really, it’s just common sense to do this."

The current tax system makes it difficult to leave a qualified retirement plan–401(k), 403(b), Keogh Plan, or IRA–to individuals other than one’s spouse. Funds remaining in the plan upon the individual’s death can be subject to significant income and estate taxes. Using plan assets for a charitable gift may allow money that would otherwise go for taxes to support a charity instead.

Appelbaum, who is chairman of Penguin Frozen Foods, the suburban Chicago company he began in 1950, says he chose to give to his alma mater because he believes in the University of Chicago. "The longer I’m out of there [the university], the more I appreciate it," Appelbaum says. "It’s really a great institution; it gave me a foundation. And I believe education is the great equalizer."

Appelbaum began considering his gift six years ago. "We think we’re immortal," he says with a chuckle, "but I’m glad I’ve got it taken care of." He encourages others to consider this type of planned giving.

"Everybody who has any estate whatsoever should think about this. If you leave [retirement funds] to their family, they’ll end up with so little," he adds. "Instead they can do infinitely more with a charitable contribution."

Robert Nagel, ’63, has used a different type of gift–a deferred payment charitable gift annuity–as part of his personal financial planning. He gave appreciated securities to the university for the benefit of the GSB, in exchange for an annuity that will pay a fixed income for the rest of his life after he reaches age 65.

In honor of his gift, the GSB will name the faculty office suites at the Gleacher Center for Nagel. This amenity, he says, would have made his life much easier when he was a guest lecturer in the 190 program. "When I taught for Dick Thain [former senior lecturer at the GSB], they were always moving people around so that I could have a desk, make a phone call, get ready to teach," he recalls. "The idea of having the luxury of a faculty office is just wonderful. I saw a great need for it, and I wanted to support something near and dear to my heart."

Nagel regularly contributes to the Annual Fund–he has served as Dean’s Circle Fund chairman for several years–but he wanted to provide an additional gift. The annuity also made good financial sense and reflected his gratitude to the GSB.

"Financially, this was a good opportunity for me to realize paper profits," explains Nagel, who is president and CEO of Chicago consulting firm Newport Associates Inc. "But I would not have been in this situation, in the job where I accumulated wealth I could share, if I hadn’t gotten the Chicago M.B.A." He claimed an immediate, substantial income tax charitable deduction in the year he made the gift; when he begins to draw the annuity, a portion of the income will be tax free.

Nagel decided on an annuity because the rate was attractive, he said, and the university manages its money well. "I saw it as a good way to support the school and make a good investment," he says. "I’d like to encourage other people to do this as well."

There are many types of charitable life income plans that can provide income to the donor and immediate benefits to the school. Donating appreciated assets can also be a valuable strategy to consider as part of lifetime financial planning and estate planning. For more information on planned gifts, contact Reginald Best in the GSB Development Office at (773) 702-7571.

 


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