Early activation of estate gifts lets donors see the effects of their gift

UNIVERSITY PARK, Pa. — Eric and Paula Taylor and Bob and Donna Nicely have all been longtime supporters of the Penn State College of Education. But it wasn’t until they chose to early-activate their pledged estate gifts that both couples got to see first-hand the effects of their generosity.

The Taylors, both Penn State alumni — Eric is a graduate of the College of Engineering and Paula of the College of Education — have been regular contributors to Penn State’s annual fund for more than 50 years.

“We would mail our check and let it go into the General Fund,” Eric Taylor said.

But in 2015, after visiting campus and speaking with representatives from the college’s development office, they established the Paula R. and Eric P. Taylor Scholarship in Education so that they could focus their philanthropy directly on student support. The scholarship supports students who are interested in pursuing a teaching career in a STEM (science, technology, engineering, mathematics) field. With the scholarship, they said, they know they are benefiting more than one student.

“By funding a scholarship for a teacher, if that teacher has a reasonably good career in teaching, say 20 or 30 years, if they instill a desire to pursue a STEM career in one student a year, that’s a pretty good return on investment for that one scholarship recipient,” said Eric Taylor, a retired Air Force colonel. “Each year that we support an education student, hopefully it will have a multiple effect downstream.”

“We wanted to create an education scholarship but we wanted to emphasize students who were pursuing STEM curriculum so that it took care of both our interests,” Paula Taylor added. “When they [development officers] explained to us how early activation works, we said ‘why not?’”

According to Jenn Moore, assistant director of stewardship for the College of Education, early activating an estate gift allows donors to make an outright pledge that immediately goes into the fund’s spending account. Instead of waiting for the endowment principle, which is not realized until the donors die, an early activation commitment provides money to be used now, when it is most needed.

“With early activation, our donors support today’s students,” Moore said.

“It’s one thing to create an endowment through our estate and help students after we’re gone,” Eric Taylor said. “But with early activation, we get to see the immediate results of our investment and that is very encouraging.”

The Taylors take advantage of early activation because it gives donors the opportunity to meet and interact with the student recipients of their scholarship.

“We love to come to the scholarship dinners hosted by the College of Education and meet the student recipients,” Paula Taylor said, emphasizing that their friends who donate to other colleges and universities do not receive this same opportunity.

“And we don’t only meet students who have received our scholarship,” she said. “We get to meet recipients of other scholarships as well as other donors.”

“We get to learn about the needs of today’s students,” she added, noting that college life has changed since she graduated in 1960.

The idea of immediate use and meeting student recipients also is what influenced Bob and Donna Nicely to early-activate the Nicely Doctoral Student Research Endowment in Education, a gift they established more than a decade ago.

“When we learned about early activation, we liked the idea because of instead of waiting until we pass away to help students, when we’ll never see what happens, it’s nice to see the results now,” Bob Nicely said.

“And we get letters from the graduate students who have benefited from the endowment,” added Donna Nicely, a 1977 graduate of Penn State McKeesport (now Penn State Greater Allegheny). “It’s nice to see what they are doing with the help of our contribution.”

Bob Nicely, a 1961 alumnus, said he also enjoys writing back to the students and giving them advice.

“When I was a doctoral student, we didn’t have much discretionary income,” he said, explaining that he had been working as a public school teacher in Pittsburgh while Donna focused on raising their two children. “Through funding by way of my adviser and Pitt’s Learning Research and Development Center (LRDC), where I had a joint appointment, I was able to travel and present scholarly and research papers at national professional conferences. If it weren’t for that financial help, I wouldn’t have been able to travel to make those presentations.”

It was while he was working at the LRDC that he realized he wanted to pursue a career in higher education. But with that, he said, comes a higher expectation for research productivity.

“I wanted to help a student at Penn State get a leg up so that when they graduate from Penn State, they have evidence of their potential in the research category of their curriculum vita,” he said. “They’ve done research, and they have written and talked about their research findings.

“Expectations for doctoral students who are going into higher education are different than those for doctoral students who go into public school leadership positions,” he said. “There is a research expectation for people in higher education and it is getting more so, even at the smaller institutions of higher education that were at one time focused primarily on teaching. Their faculty are now expected to conduct research and publish it.”

The Nicelys said they weren’t aware of the early activation option until 2015, eight years after they made an estate commitment. Upon learning about the giving opportunity, they made a five-year pledge.

“What’s great about this option is that donors can choose to early-activate at any time, regardless of how long ago an estate gift was established,” Moore said, adding that the minimum pledge for early activation of an undergraduate scholarship is $2,500 a year for five years. Donors have the option to pay every year or make a lump-sum payment. They also have the option to renew their early activation at the end of the initial pledge.

Early activation also provides welcomed tax benefits, Eric Taylor said.

“Early activation is a great option for people over 70 who are required to take money out of their IRA, whether they need it or not,” he said. “You can make your contribution directly from your IRA and it is a dollar-for-dollar contribution, so you’re not giving after-tax dollars. That works really well for us and it is a pretty seamless process.”

For both couples, giving back to Penn State comes without question.

“We both feel that Penn State has been extremely good to us, and that is a primary reason we want to give back to students and help them,” Donna Nicely said, explaining that in addition to earning their degrees from Penn State, she and Bob also are retirees of the College of Education. She served as the contracts and proposal specialist for 17 years and he is an associate dean emeritus and professor emeritus of education.

“To us, it’s just the right thing to do,” Bob Nicely said of their decision to give back.

The Taylors also have a special affinity for Penn State. After all, it is the reason the two met.

“Paula comes from a small town in the western part of the state and I am from Philadelphia,” Eric Taylor said. “There’s no way we would have met by accident other than being at Penn State at the same time. Paula and I look at Penn State as the foundation of our adult life, and we want to give back.”

Gifts such as these will advance "A Greater Penn State for 21st Century Excellence," a focused campaign that seeks to elevate Penn State’s position as a leading public university in a world defined by rapid change and global connections. With the support of alumni and friends, “A Greater Penn State” seeks to fulfill the three key imperatives of a 21st-century public university: keeping the doors to higher education open to hardworking students regardless of financial well-being; creating transformative experiences that go beyond the classroom; and impacting the world by fueling discovery, innovation and entrepreneurship. To learn more about “A Greater Penn State for 21st Century Excellence,” visit greaterpennstate.psu.edu.