[Rhodes22-list] Financial question by Lady Sailor

Chris Geankoplis napoli68 at charter.net
Fri Dec 15 23:14:13 EST 2006 

Elle,
Hello.  I'm Chris' wife, Alice and he asked me to respond to this question.

First let me extend my condolences for your loss. Chris speaks very highly
of you.

To let you know my credentials, I'm currently Director of Development for
Annual Giving at Southern Oregon University.  I have worked with donors and
scholarships for seven years at this institution.
I understand from the communication that you want to establish a
self-perpetuating scholarship, what in the industry is called an endowment,
in your husband's memory.  I also understand that you would like it to
benefit a music student.  It sounds like a thousand or two was accumulated
in memorial contributions.  This is often the case.

I gather that you spoke with an institution, a bank maybe, and they said
$10,000 was required to form an endowment.  By way of comparison, our
University's endowment minimum was at that level six years ago, but with the
increase in tuition/fees the endowment level has risen to $25,000, in order
to provide a meaningful portion of tuition/fees.  You mentioned in your
email, that the $10,000 would provide around $500 annually.  That sounds
about right.

A couple of things to remember about endowments.

They are designed to exist forever, and hence are invested relatively
securely and do not distribute much more that 4.5% for annual disbursements.
The rest of the of the earning are re-invested to grow the value of the fund
to keep pace with inflation.  Keep in mind the inflation rate in education
is much higher than that of the general economy.  The investors of the
endowment are charged with protecting that value.

I would suggest to get the most value for the money, that you limit the
scholarship to a single college or university in your area or one that was
connected with your husband. You should contact the development office and
discuss forming a scholarship.  There are several reasons for this.  One,
more of the money goes to helping students, and two, most colleges disburse
the funds to students by term, in case the student drops out before
completing the year and uses the money for other things.  Many colleges and
universities offer multiple year pledge options for forming endowments.
Depending on the institution you choose, you might be able to make a five
year pledge to fulfill the endowment requirement.

If you don't want to limit the scholarship to a single institution, many
areas have community foundations that will be happy to administer the funds.
These are often "donor advised" funds, and hence there may be some greater
complexities in formulating the scholarship the way you would like.

If you want to forego the "endowment" option at this time, many institutions
have what are known as annual scholarships.  Some pool the money into one
fund, while others like SOU allow donors to sent up criteria for awarding
scholarships at a certain threshold.  For instance, our level is $2,000.
They can be a one-time scholarship, or the donor can plan to repeat the
donation on an annual basis.  You could then convert the annual scholarship
to an endowment in the future when funds may become available.

Gifts to Universities, and other 501(C)3 organizations are tax-deductable as
allowable by law.  The total deductable would depend on your particular
circumstances.

If you have any specific questions about what you learn, or if you want to
confirm that what you are being told is common practice, please feel free to
contact me at geankopa at sou.edu or 541-552-6128.

I would like to address the comments made by Ed K.  Reputable fundraisers
understand that charitable giving is a very personal activity.  They
understand that giving is based on the relationship between the donor and
the institution.  Pressuring a donor is counter productive.  It leaves the
donor unhappy, and therefore unlikely to give in the future.  Most loyal
donors start by giving a little, and then through the stewardship and the
relationship that is developed with the institution over time, give more.
Fundraisers know this, and won't want to jepordize those future gifts.
Also, it violates the Association of Fundraising Professionals Code of
Ethics.  We cannot receive bonuses, percentages or commissions based on the
gifts brought in to an institution.  We are in this profession because we
want to help both parties and make a positive difference in peoples lives.
If ever you feel pressured by a fundraiser, walk away and find a more
professional institution to give to.

One last thought.  Like you, I love our Rhodes and if ever something were to
happen to Chris, I would hope I would be just like you!  Happy sailing.

Alice





----- Original Message ----- 
From: "elle" <watermusic38 at yahoo.com>
To: "The Rhodes 22 mail list" <rhodes22-list at rhodes22.org>
Sent: Thursday, November 30, 2006 8:01 AM
Subject: Re: [Rhodes22-list] Financial question by Lady Sailor


> Rob,
>
> Right now the $$ is in the high school's
> account...they graciously accepted the donations &
> kept the names, etc for me. As the HS does not
> administer the funds, they have to move them to a
> recognized disbursement agency...hence the management
> co. (I think it is through a bank...have to go back &
> check...)
>
> What we hoped to do was to be able to award a decent
> amt to a deserving grad for music edu....
>
> elle
> --- Rob Lowe <rlowe at vt.edu> wrote:
>
> > Elle,
> > What type of school are you talking about?  If a
> > college or university,
> > could just go into general scholarship fund.  But
> > then you wouldn't have a
> > self sustaining fund, but perhaps your intent would
> > be met.  I expect there
> > are also more discriminating scholarship funds (say
> > for engineering or
> > business) that would serve the same purpose.
> >
> >
> > ----- Original Message ----- 
> > From: "elle" <watermusic38 at yahoo.com>
> > To: "The Rhodes 22 mail list"
> > <rhodes22-list at rhodes22.org>
> > Sent: Thursday, November 30, 2006 9:43 AM
> > Subject: Re: [Rhodes22-list] Financial question by
> > Lady Sailor
> >
> >
> > > Thanaks, Ed. We're trying several different
> > avenues
> > > and may have come up with an idea that will
> > > work....still open to new thinking, though...I'm
> > > looking into tax-friendly ways to donate to the
> > > fund...Bill, you appear to be a financial
> > guru...have
> > > you a direction I could pursue? It's a big
> > learning
> > > curve for me....thanks
> > >
> > > elle
> > >
> > >
> > > --- Tootle <ekroposki at charter.net> wrote:
> > >
> > > >
> > > > Elle:
> > > >
> > > >       So your money is small potatoes to the
> > school.
> > > >  Often it depends on
> > > > the school, but usually most smaller
> > institutions
> > > > will play ball with the
> > > > smaller contributors.
> > > >
> > > >       My first reaction is that they are trying
> > to
> > > > pressure you into giving
> > > > more.  The fund raisers are under serious
> > pressure
> > > > to get the most that they
> > > > can.  They do not know your real situation and
> > > > therefore try for more.  In
> > > > sales it is said you do not get a sale until you
> > ask
> > > > for the order.  This
> > > > just may be such a sales technique.  Just trying
> > to
> > > > up the donations.  Just
> > > > consider that they are just doing their job,
> > which
> > > > is to increase giving.
> > > >
> > > >        Just set up giving in a small amount each
> > > > year to placate them.
> > > >
> > > > Ed K
> > > > Greenville, SC, USA
> > > > Addendum:
> > > > "You must give some time to your fellow men.
> > Even if
> > > > itâ?Ts a little thing, do
> > > > something for others - something for which you
> > get
> > > > no pay but the privilege
> > > > of doing it."
> > > > Albert Schweitzer
> > > >
> > > >
> > > >
> > > >
> > > >
> > > > L. Sailor wrote:
> > > > >
> > > > > Hi, guys,
> > > > > Since the sailing season is over for the
> > majority
> > > > of
> > > > > us, I have a task to occupy your time, if
> > you're
> > > > up to
> > > > > it.
> > > > >
> > > > > Here is the problem:
> > > > >
> > > > > In lieu of flowers for the funeral last year,
> > > > friends
> > > > > sent donations for a scholarship fund in
> > memory of
> > > > my
> > > > > guy.
> > > > >
> > > > > It has several thousand dollars in it, but
> > > > according
> > > > > to the organzation that manages these types of
> > > > funds,
> > > > > it needs to be at least 10K to generate enough
> > > > income
> > > > > to be self-sustaining. ´even if I add some to
> > the
> > > > pot
> > > > > now (ha...gotta get #2 daughter through the
> > last
> > > > year
> > > > > of school before I can help someone else's),
> > it
> > > > will
> > > > > be several years before there is enough to
> > give
> > > > maybe
> > > > > $500/year and to keep it self-sustaining.....
> > > > >
> > > > > So I need a plan 'B,' as the $$ is sitting in
> > the
> > > > > school's account and needs to be moved as the
> > > > auditors
> > > > > will become antsy.
> > > > >
> > > > > I hoped to give $$ for quite a long time, not
> > just
> > > > for
> > > > > several years.
> > > > >
> > > > > I have one idea but I thought the creativity &
> > > > > expertise on the list might spark an idea.
> > > > >
> > > > > thanks for any ideas. I'll let y'all know what
> > > > > happens.
> > > > >
> > > > > elle
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > > >
> > > >
> > >
> >
>
____________________________________________________________________________
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> > __________________________________________________
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> > > > >
> > > > >
> > > >
> > > > -- 
> > > > View this message in context:
> > > >
> > >
> >
> http://www.nabble.com/Financial-question-tf2729185.html#a7618999
> > > > Sent from the Rhodes 22 mailing list archive at
> > > > Nabble.com.
> > > >
> > > >
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> > >
> > >
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> > >
> >
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>
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