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Fall/Winter 2007 Texas Leader

Giving News

Texas Leader - Fall/Winter 2007

Back to the Forty Acres

Back to the Forty AcresWho says homecoming only happens in the fall?

Spring will also be a time of homecoming for members of the Texas Leadership Society as they gather for the group’s annual luncheon. Slated for April 11, 2008, the luncheon returns to last year’s location in the Texas Union Ballroom.

The luncheon was moved to the ballroom in 2007 from its previous location, the San Jacinto Residence Hall. Organizers had hoped that the ballroom would be more nostalgic for society members, many of whom are UT alumni. It worked.

“TLS members really did enjoy that setting,” said Gift Planning Director Jeff Glosser. “They enjoyed the historical part of it, the nostalgia, and reliving their student days.”

This year’s luncheon will also be members’ first chance to meet Laura Hansen Dean, the executive director of Gift Planning since April.

“I’m looking forward to meeting our donors who are helping UT be the best public research university in the country and learning about UT through their eyes,” Dean said.

The Texas Leadership Society’s annual luncheon gives UT faculty, students, and administrators a chance to tell society members about the accomplishments their gifts have made possible in the past year. For many donors, the luncheon is also a chance to get reacquainted with old friends.

Invitations will be mailed to all Texas Leadership Society members in March. There is still time to join if you aren’t already a member. Membership is automatic for those who support The University of Texas at Austin through estate gifts, including wills, trusts, insurance policies, retirement plans, annuities, or any other methods.

If you have already included the University in your estate plans, please let us know so that we can welcome you to the Texas Leadership Society and send you an invitation to the upcoming luncheon. You can reach the Office of Gift Planning by calling 512-475-9671 or 866-488-3927 toll-free, visiting http://www.utexas.edu/supportut/giftplanning, or emailing giving@www.utexas.edu. You can also let us know about your estate gift by completing and mailing us the form inside the back cover of this issue.

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Giving without taxation

A tax benefit for giving to the University and other charities will slip away at year’s end.

The Pension Protect Act, passed by Congress in 2006, allows people 70½ and older to give to qualified charities directly from their IRAs. Gifts may be rolled over directly to charity without having to be reported as income and may count toward donors’ required minimum distribution.

The law, however, is temporary and ends Dec. 31. The Office of Gift Planning is encouraging people interested in giving through IRA rollovers to contact the office by Dec. 1 so gifts can be completed by the deadline.

In the past, charitable rollovers from IRAs had to be placed directly into the IRA owner’s account before being given to charity. That meant that the distribution would show up on the person’s tax return, making income appear higher than it was. Because the temporary law allows the rollover to go directly to charity, the distribution does not have to be reported on a tax return. The bottom line: No federal tax consequences when making a qualified IRA charitable rollover.

Not all charitable gifts from IRAs qualify under the temporary law. Some restrictions:

  • The donor must be at least 70½ at the time of the transfer.
  • The gift must be from an IRA; gifts from other retirement plans such as 401(k)s or 403(b)s do not qualify. However, you may be able to roll assets from other types of qualified retirement plans into an IRA and then make the charitable gift.
  • The recipient charity may not be a donor-advised fund, a supporting organization, or a private foundation.
  • The gift must be made outright to the charity. Gifts to charitable trusts, gift annuities, pooled income funds, or other planned giving vehicles do not qualify.
  • You cannot receive any benefit from the charity in return for the gift.
  • Gifts must be received by Dec. 31, 2007.
  • Gifts made from an IRA cannot exceed $100,000 in one year. However, spouses, if 70½, may also give $100,000 per year from their IRAs.

Giving through an IRA rollover provides more than just tax savings — it gives you the chance to give during your lifetime and see the impact of your generosity. Previously, those who wanted to use IRA assets to make gifts to UT often avoided the tax burdens by having the assets paid to UT after their deaths.

Our Web site has more information about the IRA rollover at http://www.utexas.edu/supportut/giftplanning/IRAfactsheet/.

If you would like to explore this opportunity in more detail, please contact our Office of Gift Planning:
Phone: 512-475-9671 or 866-488-3927 toll-free.
Email: giving@www.utexas.edu

This information is not tax, legal, or financial advice. Please consult your attorney or other professional adviser before making any financial decisions.

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Honoring his parents

Mark MatthewsWhen Mark Matthews created an Endowed Presidential Scholarship, he had an ideal recipient in mind: his father.

The scholarship honors Matthews’ late parents, who encouraged his education despite humble circumstances. Matthews’ father was the first in his farming family to graduate high school. He even made it to college but didn’t finish because of work demands while raising a family. Matthews geared scholarship qualifications toward students who were working their way through school. He wanted someone like his dad to be able to qualify.

He also wanted to honor another important influence in his life — his mother, who as a public school teacher joined his father in stressing the importance of an education.

Matthews’ father’s belief in education stemmed from an upbringing in which the sons quit school at 15 and went to work raising cattle and hogs and growing cotton. J.M. Matthews thought there was a better way.

“‘If you don’t get an education you’re going to end up digging ditches,’ he’d tell us all the time,” Matthews recalls. Matthews’ father wanted his sons to have opportunities that he didn’t have. The J.M. and Florence Matthews Endowed Presidential Scholarship is Mark Matthews’ tribute to his parents, who died within 10 months of each other in 2003.

“After I grieved for a while, I had to do something,” he says. A scholarship at his alma mater seemed appropriate because education was so important to his parents. Along the way, establishing the scholarship helped his healing process. “It gave me a sense of satisfaction that I was doing something for them,” he says. “I can never pay them back, but here’s something in perpetuity in their honor.”

Matthews has also included the University in his will. The bequest will provide further support for the scholarship in his parents’ names.

The Fort Worth native grew up there and in Midland. His mother was a third-grade teacher and his father worked in accounting for Gulf Oil. They were poor when they first married, but they worked hard and saved so their two sons could get an education. Mark earned his bachelor’s in mechanical engineering from UT in 1972 and later a master’s from Berkeley; his brother, Mike, earned a bachelor’s degree from North Texas and a graduate degree from UT. Mark is now retired; Mike is an administrator at Tarrant County College in Fort Worth.

Matthews might never have become an engineer if not for an ill-fated party. He was enrolled in Plan II and was living with three other freshmen when his roommates threw a wild bash without him. The roommates were expelled, and Matthews was reassigned to a room with three seniors, one of them a major in mechanical engineering. The two got to talking about the different types of engineering.

“He said he liked mechanical engineering because it allows you to know a little bit about everything but not a hell of a lot about anything,” Matthews recalls with a smile. “He got me all excited about engineering, and I switched.”

After graduating, Matthews went to work for the Atomic Energy Commission and its later incarnation, the Department of Energy. For three years he worked in nuclear-energy development, then spent the next 25 years in nuclear-waste management. He worked cleaning up uranium mill tailings sites in the West, often battling communities that didn’t want waste sites as neighbors. The work wasn’t for everyone, but it suited him.

“I like challenges,” he says. “I’d go and stand up in front of a room of people who were hostile and try to change their attitudes. I just got a rush from that. I knew they weren’t going to like what I had to say, but I tried to use logic to change their minds.”

These days he meets with a friendlier audience. Every year he gets the chance to meet recipients of his parents’ scholarship at a recognition dinner on the UT campus. “I’ve met them, and they’re very smart people who are really applying themselves. They weren’t born with a silver spoon in their mouths, which is how the scholarship was designed to be,” he says. “They had struggles, they overcame them, and they went to UT. They seem very grateful and very happy. I’m gratified with the response.”

Matthews takes the opportunity to tell students about his parents and encourage them to give back when they can. He believes everyone can be a philanthropist regardless of circumstances.

“I think that I’m an example of that,” he says. “I grew up in a very simple household, and by coming to The University of Texas, working hard, and applying myself — and the blessings that I’ve had — I’ve been a success in my professional career.

“You feel better giving than you do getting. Giving stays with you a long time.”

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From student to benefactor

Jane HolseyJane Holsey was never afraid of a little weather. Especially if an adventure was involved.

Often as not, the University or one of the friends she made in school was involved. Take the time Holsey and her first UT roommate were staying together in Bay City and hurricane warnings began to sound. “They asked everybody to get out of Bay City, but since I had never been in a hurricane I wanted to stay,” Holsey recalls.

Her roommate promised to stay with her, and everyone else left Bay City. It wasn’t long before the pair got scared and decided to go stay with family in Richmond. There, the storm worsened, and windows began to break about midnight.

“That was my first hurricane,” Holsey says proudly.

The Texas heat fazed her even less. She attended her first football game as a UT student intent on making a fashion statement.

Jane Holsey — then Jane Leathers — was probably the only person at the game wearing a fur coat, but she worked hard for that coat, picking cotton, doing odd jobs, and earning money for her good grades. She wasn’t going to let the heat stop her from wearing it, even if the outside temperature was “110 degrees in the shade.”

That very hot football game was just one of Holsey’s many experiences while a UT student in 1936 and 1937. Fast forward to 2007: Holsey has chosen to continue her connection to the University by including the College of Liberal Arts and UT Libraries in her will. Her gifts will go to a dean’s discretionary fund in Liberal Arts and to support an extensive book collection she is donating to UT Libraries.

Holsey’s love of books and the University are intertwined. She published a book, “Through the Years,” in 1946 and conducted some of the research at UT. The University proofed the book, and Holsey gave UT the copyright.

After attending UT for a year, Holsey made plans to transfer to another school with a friend. The friend’s plans fell through, and Holsey ended up at Sam Houston State in Huntsville. She graduated in three years with majors in English, history, and Spanish. After that she took her first teaching job in Franklin. She also taught in her native Oakwood and in Corsicana, where she met her future husband, Seton Holsey.

“He and I didn’t see eye to eye at first,” she recalls. Nevertheless, the romance progressed with a little nudging from three of Jane’s fellow teachers — Seton’s cousins.

Jane Leathers and Seton Holsey were married in 1948 at Easter. In 1950 they moved to Washington, D.C., where Seton worked for the Pentagon. The couple returned to Texas in 1969 and settled in San Antonio. Seton Holsey died in 2005.

“The longer I work with my UT friends, the more I believe that I made the right decision in choosing them as the recipients of my estate,” Holsey says. “I believe my husband would agree with me.”

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Tax law: out with the old, in with the new

Sarah DanielThe new year will bring the end of one charitable giving opportunity and usher in another.

2007 is the last year for taxpayers age 70½ or older to take advantage of charitable giving opportunities using their IRAs. If you are 70½ or older, you may roll over up to $100,000 tax free from your IRA without reporting the distribution as part of your gross income. This limitation applies to individual taxpayers, so if a husband and wife are both 70½ or older and both have IRAs, each may contribute up to $100,000. You will not receive a charitable deduction, but you will not have to report the income. The distribution can also satisfy your required minimum distribution. The distribution must be made directly by the IRA trustee to a public charity.

A new opportunity presents itself in 2008, 2009, and 2010. The capital gains rate will drop to 0 percent for taxpayers in the 10 percent and 15 percent tax brackets. Funding charitable gift annuities with appreciated stock may especially appeal to lower-income-tax-bracket donors.

Although final numbers depend on inflation adjustments, in 2008 a single taxpayer with taxable income of about $33,000 should still be in the 15 percent tax bracket. The same holds true of married taxpayers filing jointly at an income level of about $66,000. These bracket levels will most likely increase due to inflation adjustments in 2009 and 2010.

Consider this example:

Scott and Ann, a retired couple in their late 70s, already have two charitable gift annuities. Because their taxable income is about $60,000 a year, the 2008 through 2010 capital gains portion of their current annuity payments will be tax free. They had been paying 5 percent.

Taking further advantage of this opportunity, they intend to transfer $10,000 in appreciated stock to charity in 2008 for a new gift annuity. Assuming a 20 percent cost basis, the reportable capital gain from the annuity would be about $4,000 (the remaining $4,000 of gain would be avoided as a charitable contribution). Because they are in the 15 percent tax bracket they will owe no tax on this gain. Similar repeat gifts in 2009 and 2010 will allow them to take further advantage of this 0 percent tax rate even if Congress later raises the capital gains tax rates.

Sarah Daniel is a certified public accountant with the El Paso firm Lauterbach, Borschow & Co.

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The future of communication

James Moroney, Jr.An estate gift will help transform the University’s College of Communication.

The estate gift from former Dallas Morning News publisher and CEO James Moroney Jr. — plus gifts from foundations with ties to Moroney — contributed $1.5 million of a $15 million gift to establish the Belo Center for New Media in the College of Communication.

The bulk of the gift, $12 million, comes from the Belo Foundation, the philanthropic arm of the Belo Corp. The Belo Corp. owns the News, and Moroney served on its board of directors for 48 years. The remainder comes from Robert W. and Maureen H. Decherd. Robert Decherd is chairman of the Belo Foundation and chairman and CEO of Belo Corp.

The current three-building College of Communication complex was completed in 1974 to serve 1,000 students. Today, the college serves more than 4,200 students. The Belo Center for New Media will augment teaching and research space for the college. Construction costs for the center, projected to be between 100,000 and 125,000 square feet, are estimated at $45 million. The new building will feature state-of-the-art classrooms, advanced production labs and seminar rooms, along with large auditorium spaces for introductory classes, film showings, and conferences.

In addition to his estate gift, two foundation gifts can be credited to Moroney. One is from the Jim and Lynn Moroney Foundation; the other from the American Electric Power Foundation. Moroney was on American Electric Power’s board of directors and gave through a “corporate director charitable plan designation.” Such designations, typically insurance policies, are often one of the fringe benefits of serving on a corporate board. As a show of gratitude for their service, corporations often allow board members to direct contributions to their favorite charities after their lifetimes.

Moroney died in February 2007 at the age of 85. He graduated from the University in 1943 with a bachelor of business administration.

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