University Park, Pa. -- Making gifts ranging from several hundred dollars to the maximum $100,000, Penn State donors are taking advantage of benefits afforded by the recently passed Pension Protection Act, according to Rod Kirsch, senior vice president for development and alumni relations.
"I'm pleased with the initial reports of donors who are using this new legislation as yet another opportunity to support Penn State," he said.
The Pension Protection Act of 2006 allows donors to make tax-free withdrawals from a traditional or Roth Individual Retirement Account (IRA) directly to a qualified charity. Distribution amounts are not included in the donor's gross income and do not factor into any charitable deduction that otherwise would apply to the donor, but will count toward the donor's minimum required distribution.
The donor must be at least age 70 years and six months at the time of the distribution, and the distribution must be made outright to the charity and not to a donor-advised fund or supporting organization. The qualified charitable distributions are limited to $100,000 per taxpayer per year for transfers made in 2006 and 2007.
Alumnus Hal Marcus, who with his wife, Inge Marcus, have been benefactors of the College of Engineering, urged other donors to consider the opportunities presented by the Pension Protection Act in making their gifts.
"Over the years, Inge and I have made gifts of cash, appreciated securities and even real estate to support students, faculty and programs at the University," said Marcus, a 1949 graduate in industrial engineering. "This new legislation has given us one more creative way to give, and we encourage others who may be eligible to use their IRA fund to support Penn State in this way."
Some donors are choosing to direct their gifts to add to existing scholarships or to create Trustee Matching Scholarships, a program initiated by the Board of Trustees to benefit those students who have the greatest financial need. The annual payouts from these scholarships are matched by the University.
Kenton Broyles, for example, is using his IRA distribution to create a Trustee Matching Scholarship.
"Being able to benefit students who need it the most has always been meaningful to Audrey and me," said Broyles. He and his wife, Audrey Broyles, are longtime benefactors of Penn State Intercollegiate Athletics and Penn State Mont Alto.
"By combining the opportunities available to us right now -- the benefits of the Pension Protection Act and the University's Trustee Matching Scholarship program -- we will be able to double the impact of our gifts and touch even more lives," he noted.
Alumni and friends who are interested in making a direct distribution from their IRA to Penn State are encouraged to consult their financial or tax advisor before proceeding. They may contact the Office of Planned Giving and Endowments for additional information at plannedgiving@psu.edu or (888) 800-9170.