The power of planned giving

October 1, 2015

Alumni & friends discover ways to leave a lasting legacy

In 2010, after his father lost his job, Alejandro Gonzalez and his family were forced to leave their home and move into a local shelter. As a high school student with his sights set on going to college, Alejandro now found himself in an unimaginable situation--being homeless.

But this new challenge didn't deter Gonzalez from his goal.

"Something just kept telling me, 'You’ve got to try. There's some hope.' So I stayed in my AP and Pre-AP courses in high school just to see how it could turn out," he said.

With the support of his teachers and school staff, Gonzalez graduated from high school summa cum laude with an acceptance letter to Baylor University, his dream school, in hand. However, even with these triumphs, Gonzalez still faced the challenge of paying for tuition.

"I remember being extremely overwhelmed by the cost to attend Baylor," Gonzalez said. "I just thought, 'How am I going to pay for all of this?'"

Then the scholarships began to come in, and Gonzalez discovered that his dream to attend Baylor was becoming a reality. He chose to pursue a degree in Management Information Systems and, for his sophomore year, was awarded a very special scholarship--The Walter M. and Elizabeth Parkhill Scott Endowed Scholarship in the Hankamer School of Business.

The Scotts established this endowed scholarship to provide worthy students the opportunity to obtain a quality academic education in a Christian environment. "Scotty" and Elizabeth, BA '42, made generous annual gifts during their lifetimes that were further enhanced through their employers' matching gift programs. They also funded a number of Charitable Gift Annuities (CGA), which benefited them with income for life while also leaving a gift to Baylor. Thus, through lifetime giving, life-income gifts and a bequest in their estate plans, the Scotts were able to help open the doors to a Baylor education for Gonzalez.

"I wish I could thank the Scotts in person. I would write a five-page thank you letter to them," the San Antonio senior said.

The Scotts' legacy of giving not only continues to produce opportunities for education, but it has also inspired the potential for a new giving legacy.

"Once I get settled into my professional career, I just want to give back to the University," Gonzalez said. "So many people invested in me and in my education. I want to do the same for other students."

Desire to help others

Judy Alexander

The story of the Scotts and their impact on Gonzalez's life exemplifies the power of planned giving. And while the thousands of alumni and friends who have made such planned gifts vary greatly in terms of their backgrounds, their ages at the time and the size of their gifts, one thing they all share is the motivation to make a difference in the lives of Baylor students.

Judy Alexander, BA '71, said her desire to make a planned gift stemmed from the important role Baylor has played in her life. "I know how much Baylor has meant to me and continues to mean to me," Alexander explained, alluding to the journalism classes that served as the foundation for her career. "I wanted to help others have that same experience for themselves."

Sitting in her office in downtown San Antonio, Alexander reflected on the path that led to her current role in marketing at Frost Bank. Her path began at Baylor. After transferring to Baylor as a sophomore, she remembered that high school teachers had praised her writing skills and chose to major in journalism.

"I had some great professors. They were encouraging, and the classes were small and intimate," Alexander said. "I felt like it was a nurturing environment, and maybe this sounds a little sappy, but a loving environment."

That foundation served as a springboard to a nearly 40-year career in corporate communications, during which she has worked for companies including AllState, H-E-B and USAA. She also owned a communications consultancy before being recruited by Frost, and she built a rewarding career bridging communications gaps between companies and clients.

Three years ago and in the prime of her career, Alexander wasn't thinking about her future legacy or helping students who were following her footsteps in Baylor journalism. Then Judy's mother asked her to help update an estate plan, so that Alexander and her sister would understand everything that was in it. They discussed legal options to care for the money Alexander would inherit, and their attorney suggested Alexander consider where she might like the money to go.

"I don't have children, and I'm not married now," Alexander said. "So I thought, 'Who's really my child?' My child, it occurred to me, was Baylor. I have continued to love Baylor all this time because it prepared me for the life I've been able to live."

As a result, she established The Judy Froese Alexander Endowed Scholarship in Journalism to enable future students to pursue the career path she has so enjoyed.

"I'd really love to help somebody who's interested in somewhat of the same path that I took," she said. "I know there are people who have those gifts and want the opportunity to develop them, and maybe the only way they can is through a scholarship. It gives me great joy to think I can make that happen for somebody."

Many options available

The Baylor family is known for its generosity--to their churches, their communities and their alma mater. Many individuals and couples find planned giving to be an attractive way to leave a legacy because a planned gift is often much larger, when fully realized, than any gift they could make during their lifetime. Planned gifts thus offer the opportunity to make a signature statement about one’s values and philanthropic desire to help others.

It's an opportunity the Baylor family has been taking advantage of in growing numbers, with 47 alumni and friends making future estate commitments exceeding $29 million during the last fiscal year. Additionally, Baylor received more than $9 million in realized bequests last year, representing a final and enduring act of love for the University.

The idea of establishing a bequest may seem daunting and a common misconception is that a bequest means one thing and one thing only--a gift of a specific asset, as defined in a will, given for a group's general operating needs. There are many options available for establishing a bequest that give you the opportunity to provide for your family while also giving to an organization that is meaningful to you.

First, a bequest can be designated in a variety of ways. You can direct your gift to be restricted to a particular use within the organization, such as a scholarship fund. You can also designate your gift as an endowed bequest, requiring the organization to hold the funds permanently and only use distributable earnings.

Second, there are different types of bequests. A residuary bequest gives the remainder of an estate to a nonprofit after all other beneficiaries are addressed. A contingent bequest, gives an organization a gift only in the event that the will's primary beneficiary doesn’t survive the donor.

Third, you don't have to leave specific assets, such as a parcel of land or a certain dollar amount of investments, to a beneficiary. Instead, you can simply leave a specified percentage of your estate's value to the charitable organization.

Finally, a charity may be named as a beneficiary of other assets, such as life insurance, IRAs and other retirement plans. Again, if you don't wish to leave the entirety of such an asset to the nonprofit, you can specify a percentage of the value to be given instead.

"Estate planning doesn't always mean going back to the attorney," said Susan Wommack, JD '89, director of development for Baylor Law School. "Giving can often be facilitated by simply changing the beneficiary on a retirement plan or life insurance. Attention should be given, however, to coordinating these gifts with the assets that will pass under your will."

Wommack noted that making a bequest can offer a means of preserving an individual’s current support of an organization or cause into the future.

Another form of planned giving that alumni and friends of Baylor have found particularly appealing is what is known as life income gifts.

Financial planning experts describe such gifts, which include a Charitable Gift Annuity (CGA) and a Charitable Remainder Trust (CRT), as having twice the power of a typical gift. Both CGAs and CRTs allow donors to make a gift to Baylor and retain an income for themselves or other beneficiaries for a term of years or for life. When there are no remaining income beneficiaries, the balance of the fund passes to Baylor for the purposes the donor specified when the gift was established.

"Life income gifts are truly gifts that keep on giving," said Larry Smith, assistant vice president for gift planning at Baylor. "Many alumni and friends have found them to be an ideal way of supporting Baylor while ensuring their own needs."

Of all the gifts that pay income to a donor, the CGA is the simplest, most affordable and most popular giving vehicle. The gift agreement is a simple contract between the donor and Baylor through which the donor makes a gift to their specified area of interest and the University agrees to pay an annual annuity to the beneficiary for a specified time. Payments become a general obligation of the University, fully backed by the University’s assets, and the payments (based on the annuitant’s age) do not fluctuate. Part of each annuity payment is treated as a tax-free return of the donor’s principal.

The CRT is a flexible tool, giving donors income while avoiding capital gains tax and receiving a charitable deduction. Through this tool, the donor transfers a valuable asset into a trust that benefits the University and pays an income to the donor. The CRTs can have multiple beneficiaries and can be funded by a variety of assets, such as appreciated stock and real estate.

Income can be for the beneficiary's life or a term of years. In addition, the trust can be created to allow the donor to make additional gifts to the trust.

A life of sharing

"Planned gifts allow couples or individuals to make a transformational gift to a nonprofit organization whose mission lies close to their hearts," Smith said. "Our donors are making a person-to-person connection to Baylor students, even though the impact of their gifts may not be felt for many years."

Benegene Gann Kring

Benegene Gann Kring, BA '66, was one such alumna whose love for Baylor led to a decision to better the lives of students through a planned gift.

If you were to page through an old Houston Society of Exploration Geophysicists yearbook from the 1970s or '80s, you'd see pages of photos of serious-looking men, united by their work in oil, space exploration and other industries that shaped Houston both then and now.

One picture in particular would stand out. It's a photograph of Kring--a rare woman among all the men. In life, like in that yearbook, she couldn't help but stand out.

"She was a trailblazer," said her brother, Tom Gann, BBA '68, MBA '72, "but you can't describe her with one simple word. She was amazing."

Natalie Gann Crowson, BA '74, Kring and Gann's sister, described her as "unbelievable. She was adventurous. She wasn't afraid of anything."

Only a few years after a long battle with breast cancer claimed Benegene's life in October 2012, it's clear that her life continues to resonate. "Anything that she loved, she shared," Crowson remembered. "Her enthusiasm, her travel, her love, even her assets, she shared. She was always taking friends and family on trips, organizing parties and inviting people to share."

Kring's career with ExxonMobil--where she was one of three women geophysicists when she arrived--was marked by many significant projects that took her all over the globe. The impact she had on individuals with whom she worked with during her career and the many friends she made and cherished caused an overflow crowd at her memorial service.

The outpouring of love was a fitting tribute to someone who gave so much. When Kring died, she left gifts to numerous surprised friends and family members, including cousins, college roommates, nieces, longtime nail technician, and her loyal lawn maintenance man.

In addition to bequests to Angelina College to more fully fund an endowment established in her mother's memory and to the Lufkin High School Alumni Association to fund an endowment in her grandfather's memory, she also gave to Baylor, establishing with the bulk of her estate The Benegene Gann Kring Endowed Fund for General Operating Expenses. The fund is designated for Baylor's use wherever there is the greatest need, as Kring wanted to give Baylor maximum flexibility in applying her gift to the University's priorities and opportunities.

"Even now, she's teaching us how to do things, teaching us how to give," Gann said. "She wouldn't give money to an organization she didn't believe in. And she loved Baylor throughout her whole life--shared that love with us and modeled it."

While a perpetual endowment could be proof enough of her abiding love for Kring's alma mater, Crowson owns a cherished letter from one of her sister's college roommates revealing that Kring also loved to share Baylor.

"No matter where she went," the letter reads, "she would always tell people how proud she was to be from Baylor. After we graduated, she organized a girls' weekend for those of us from the Baylor days. She encouraged teens to come to Baylor."

While reading the tribute, Gann and Crowson both had tears in their eyes as the letter drew to a close: "Benegene loved to travel and chose some out of the way places, but I think I know where she is now. I think she’s organizing Baylor alumni and singing That Good Old Baylor Line in heaven."