MSU President's Column for Traill County Tribune
November 29, 2014
Amazing stewardship opportunities available for charitable donors until Dec. 31
The holiday season is a time for giving, and a time for being thankful. At Mayville State, we are very fortunate to benefit from the generosity of so many alumni and friends. Many of these benefactors are individuals who are grateful for what they have received from Mayville State and are helping to provide financial assistance so that others may also enjoy the benefits of a Mayville State education. Others are thankful for the fact that Mayville State plays an important part in our community, and they want to help ensure that this will continue. Whatever the reason for their gifts, these people are truly making a difference in the lives of others.
Especially as the end of the year approaches, we think about the many opportunities that are helping to provide great benefits to our donors who so generously are supporting Mayville State. Many of these benefits can make the impact of the gift extend well beyond the actual cash amount expended by the donor.
The 63rd North Dakota Legislative Assembly created an amazing program to spur philanthropic giving to North Dakota’s state universities and enhance academic excellence. This program will end Dec. 31, 2014. The program and funding, called “The Matching Fund for Enhanced Academics,” is providing a 50% match for each and every dollar donated to endowments and annual scholarships through the Mayville State University Foundation until Dec. 31, 2014. Every dollar given will receive a 50% match, creating the potential for $2,000,000 in new endowment and annual scholarship funding. This could allow for 60 or more new academic scholarships per year. Contributors can also make a pledge of up to seven years before the Dec. 31 deadline and have the entire pledge amount matched.
The North Dakota endowment tax credit adds yet another benefit to donors who make gifts of $5,000 or more in a year to an MSU endowment. They will receive a 40% tax credit for the gift amount on their state income tax. They also qualify for a federal deduction. This makes the average $5,000 gift cost about $1,600. (This scenario assumes the donor is in the 28% tax bracket. Donors interested in this should always consult with their financial advisors first to see how it would work for their personal situation.)
So, if a person were to take advantage of all of the programs available, the scenario could look something like this:
Joe and Margaret Smith love Mayville State University. They want to establish an academic scholarship endowment at the university. They know that a scholarship endowment must reach a funding level of $15,000 before it is eligible to begin producing scholarship funding. They also want to get the North Dakota endowment credit and take advantage of the 50% matching funds from the North Dakota Matching Fund.
They check with their tax advisor and find out they can make a gift of $10,000 and place the money into the Joe and Margaret Smith annual scholarship endowment through the MSU Foundation. The public private match then comes into play, and provides 50% match of their gift of $5,000. This match also flows into their endowment and the endowment is now fully funded!
In addition, the North Dakota endowment credit will give them $4,000 back in state income tax credit, thus reducing the cost of their gift to $6,000. If they aren’t able to use the whole credit this year, they can carry it over for up to five more years.
Joe and Margaret’s net gift cost is $6,000 and funded a $15,000 scholarship endowment! This endowment will now generate a scholarship in their name every year, forever, to help a student. This is both a legacy and amazing stewardship.
We’ve also had supporters who created retirement income charitable gift annuities that gave them an annual guaranteed retirement income payment of 6-8% of their gift amount, based on age, and a huge tax deduction and qualified for the 50% match. For these donors it was a lot better than the small returns available on their certificate of deposit.
Still another supporter had planned to leave a $10,000 gift through a life insurance policy, but decided instead to give it to us now and have the gift earn the 50% match and a big tax deduction. Best of all, they get to see the good that their gift will do now while they are living.
The end of the year is quickly approaching. If you would like to see how these various programs might work for you, I encourage you to contact your personal financial advisor, as well as John Klocke, the executive director of the MSU Foundation, to help you navigate these great gift opportunities that can stretch your charitable gift dollar. John can be reached at 701-788-4787 or john.j.klocke@mayvillestate.edu.
Go to www.msugift.org to find out more about philanthropic opportunities available at Mayville State University.