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Spring 2003 l Capital University Journal
It pays to give
by Ann Reed

Gift annuities are a great way for people to make their bequests now and receive a partial income tax deduction. And fixed payments often fit very well with the donor’s financial planning for retirement.

In retirement, emeritus music professor Tom Gentry continues his lifelong love—playing the piano and accompanying colleagues. He also belongs to a book club, enjoys art and photography—and is paying back a debt he feels he owes.

He is one of nearly a dozen individuals who have established a charitable gift annuity with Sac State. The annuity pays a small amount to him each year that supplements his retirement income. The remainder from his gift becomes available to the University after his lifetime. In Gentry’s case, his wish is that the money goes to students in the form of scholarships.

“I’m where I am because of that—scholarships, grants, awards. If it weren’t for that I’d never have gone to the University,” he said. “I went to the University courtesy of a grant from the state. It started there...I was also the first recipient of the Hank Williams Music Scholarship, a big $50,” he said with a grin.

“I think those of us who survived, thanks to scholarship money, carry that debt with us most of our lives. We can’t repay those who helped us so the only way to discharge the debt of gratitude is to continue the cycle by helping other students along,” he said.

Gentry said people think about money in different ways. “You don’t know how many years you are going to need it or what the economy is going to do. You may have a little now and wonder if you will need it 10 years down the line. So I think that making plans is important. I had always planned to do it. The only question was when.”

In that respect the charitable gift annuity worked out well for him because it offers both the security of set payments over his life expectancy, as well as a gift to the University.

The charitable gift annuity is an increasingly popular way to make a gift, said Sheila Hard, director of planned giving at Sac State. “Most planned gift donors make bequests through their wills. In fact, bequests account for 60 to 80 percent of the money received by charities through all planned gift arrangements. But gift annuities are a great way for people to make their bequests now and receive a partial income tax deduction. And fixed payments often fit very well with the donor’s financial planning for retirement.”

She added that highly appreciated stock may be used to fund the gift annuity, which results in favorable capital gains consequences. Because it is a gift, annuity rates for nonprofits such as the University may be slightly lower than commercial annuities, but she stresses the gift can make a significant difference to the University.

As the donor, Gentry could designate how his gift would be used, and he decided on scholarships. Other donors have chosen scholarships as well as unrestricted gifts to departments or gifts to the library, Hard said.

While Gentry recognizes the need for tangible gifts such as buildings, he says he is personally committed to “investing in people. When you invest in people in the long-term it pays off.”

Gentry said one problem Sac State has is that tuition sounds so low that donors think students can afford it, and they give their money to higher-tuition universities. “They seem to think our students don’t need the help. Well, they do need it. I’ve seen kids drop out of school because they didn’t have $200.”

Music, for one, is an expensive major, he explained. There is the private instruction, the cost of instruments, and the time for practice and rehearsals that leaves little time for outside work. “Typically, like drama students, music students are poor, giving all of their time to their studies,” Gentry said.

He believes there is just not enough scholarship money for deserving students. He recalled one of his students, dedicated and with potential. “She had some heavy family burdens, with only one parent who was away a lot and a cousin she was raising too, all while she was going to school. There was just no scholarship available, but she was dedicated and wanted to continue. Well, she got help—me—to keep going,” he recalled. When he recently heard from her, she had just released her first CD in Nashville.

“One thing that bothers me is the easy credit available to students, the student loans, the credit cards, etc. It is such a trap. They get out of school only to have all of the loans and credit card debt staring them in the face. Then they are committed up to their eyebrows for the next 10 years. I’d really like to see more scholarships available,” he said.

To help remedy that he served for many years on the department’s scholarship committee, and now belongs to the Saturday Club, a group of music supporters that gives scholarships to Sac State. He has sat on the scholarship committee for years. One time he asked how many members had received scholarship money and nearly every hand went up. “No one expected that,” Gentry said. “It was quite a statement.”

As for his 30 years at Sac State, “I miss it like you can’t believe.” That’s one of the reasons he keeps on giving.

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