Perseverance, Gratitude, and Support for NYU Students

Robert “Bob” Berend faced some difficult circumstances when he was young, but he persevered and eventually enjoyed a very successful career in finance and securities law. When Bob was just 3½ years old, his father passed away. Shortly thereafter, his older brother passed away, leaving just Bob and his mother. Nonetheless, with some financial assistance from a family friend, Bob was able to start attending the Heights campus of NYU at the age of 16½.

Bob worked on the campus newspaper throughout his time as a student at NYU, and he served as managing editor of the daily newspaper during his senior year. Bob has fond and distinct memories of his experiences working on the paper—his favorite experience was the opportunity to interview Jackie Robinson.

Bob graduated magna cum laude from NYU in 1952 with a major in History and minors in Political Science and Spanish. He still appreciates the quality of the faculty at the Heights campus during his time as a student. After graduation from NYU, Bob received his law degree from Yale University and, after service in the U.S. Army, began his career at a private law firm, specializing in corporate and securities law. While in private practice, Bob was part of a team that helped bring Management Assistance, Inc. (MAI), a small public company, from over $100 million in debt to a Fortune 400 Company while avoiding bankruptcy court. He joined MAI as its general counsel in 1975. Years later, he was a partner in another private law firm.

Bob and his wife, Shelley, are strong believers in philanthropy and have included a gift to NYU in their wills. The funds, when received by NYU, will be used to endow a scholarship that will provide financial assistance in perpetuity for students in the College of Arts and Science.

Bob Berend BA `52 and Shelley Berend

Worth Your Attention

One of the most unique options for supporting NYU is the charitable gift annuity. Charitable gift annuities are both a gift from you and an income to you. The gift portion of the gift annuity qualifies for an income tax charitable deduction if you itemize, and the annuity portion provides a lifetime income. Plus, you will enjoy favorable tax treatment on the payout from the gift annuity for many years.

Planning for the future—yours and ours

Gift annuities can play an important role in your planning, allowing you to reach charitable goals in ways that help you and others.

A gift from you
A charitable gift annuity is part gift and part annuity. The gift portion qualifies for an income tax charitable deduction. The deduction amount is the charitable portion of the gift annuity as calculated at the time your gift is made. 

Ginnie (age 80) decides to fund her gift annuity with $25,000 in cash. She can take an itemized income tax charitable deduction of $12,061 in the year of her gift—this amount is the portion of the gift annuity arrangement expected to support NYU.*

An income to you
In exchange for your gift of cash or appreciated assets (usually securities), we agree to pay a fixed income for the rest of your life. The payout rates are based on the annuitant’s age at the time the gift annuity is established; generally, the higher the age, the higher the pay-out rate. Check the chart for sample gift annuity rates. Of course, we can provide an illustration specifically for you.

Keep in mind these payout rates are fixed and will not change during the annuity payout period, regardless of prevailing interest rates or what happens in the markets. 

Remember that Ginnie (age 80) funded her gift annuity with $25,000 cash. Based upon her age, her payout rate is 7.3%, which means she receives $1,825 a year for as long as she lives.

Favorable tax treatment of the gift annuity payout
Unlike interest from a CD, a gift annuity payout may not be ordinary income. You will enjoy favorable tax treatment of your gift annuity payout for a period of time. For example, part of your payment may be a tax-free return of principal. As you receive each payment, you recover part of the cash from your original gift—and that amount comes to you tax free. If you donate appreciated property to fund your gift annuity, part of each payment may be taxed as long-term capital gain for a specified period.

As noted previously, Ginnie enjoys payments of $1,825 each year as long as she lives. Even better, Ginnie pays tax on only $387 of that $1,825 for the next 9 years.*

Timing your payments—immediate or deferred gift annuities

Deferred gift annuities work just like immediate gift annuities, except that the start date for payments is postponed—often for many years, until the time a donor plans to retire.

A deferred gift annuity has two advantages over immediate gift annuities. One, the payout rates for deferred gift annuities are higher compared to immediate gift annuities. And two, the charitable deduction for a deferred gift annuity is higher compared to that for an immediate gift annuity set up at the same time—a real advantage to many donors in their peak earning years.

One more advantage exists for donors who have reached the contribution limit to a qualified retirement plan: the deferred gift annuity is not affected by such contribution limits.

Amy is a 55-year-old entrepreneur who is having a very successful year. She wants to take advantage of her good fortune to support NYU. She decides to set up a charitable gift annuity and defer payments for 15 years. She designates her gift of $100,000 to support student scholarships. Her gift qualifies for a charitable deduction of $41,000. At age 70, she will begin receiving annual payments of $9,000 for the rest of her life—a payment rate of 9.0%.

How you can make a difference

Since the charitable gift annuity is a gift that provides an income for you, it may be possible to make a larger gift than you have previously considered. Consequently, it is important to think about what you want your gift to accomplish. Here are two examples of ways to make an impact.

• You can endow a named scholarship that will provide financial assistance in perpetuity to deserving students.
• You can establish an endowed fund that will financially support in perpetuity a department, program, or area at NYU that is of particular interest to you.

We will be happy to provide information about NYU programs, and we welcome your specific input regarding how your gift is used.

*All examples for illustrative purposes only, based on an Applicable Federal Rate of 2.8%.

You may also visit giving.nyu.edu/giftplanning/ to learn more.