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A Little Bit of Luck—and a Lot of Financial Know-How
One day, when Kathy and Tom Macdonald were living at Stanford on his graduate student's stipend, they ran out of grocery money. Kathy was an undergraduate, and Tom was pursuing a master's degree on a National Defense fellowship, so it was often hard to make ends meet. Kathy turned to the Stanford graduate student office for help.
"The fellow behind the desk gave me a $25 check and said, 'We know you'll pay it back,'" she remembers with a smile.
That was just one of many ways that Stanford helped change the lives of Kathy, '63, MA '64, and Tom, MA '66. From humble beginnings in Rhode Island—where they were teenage sweethearts—the newlyweds blossomed on campus. "Stanford opened our minds," explains Kathy. "We realized it was OK to be a 'nerd.' Everybody wanted to talk about ideas."
Kathy and Tom never forgot the generous spirit they found at the Farm. The Macdonalds have now included Stanford in their estate plans by creating two charitable gift annuities and designating a bequest to the university. Their plans will provide fellowships for graduate students in the School of Humanities and Sciences, ensuring that future generations receive financial support.
These days, the Macdonalds have their household finances well in hand. Tom worked for 25 years for the Hawaiian Trust Company, which was responsible for managing $12 billion in assets. He retired as president and chief executive officer in 1995. He is familiar with retirement planning vehicles and says he is "sold" on charitable gift annuities.
A charitable gift annuity is created when a donor makes a gift of cash or securities to Stanford in return for a periodic payment that continues each year for life. The fixed payment amount depends on the beneficiaries' ages and the size of the gift. The donor may take a current income tax deduction for a portion of the gift value. When the gift matures, the remaining assets are used by Stanford to support the purpose(s) chosen by the donor.
Tom explains that for those who want to make a philanthropic gift and also receive annual payments, charitable gift annuities offer great benefits. Their payments can be higher than the income earned from many other investments in this current low-interest environment. And a charitable gift annuity locks in those guaranteed payments for the beneficiaries' lifetimes.
"The annuity rate of 4.7 percent was very attractive," says Tom. As Kathy puts it, "This is an absolute win-win for us."
One good gift deserves another, and another
In fact, the Macdonalds were so pleased with their first charitable gift annuity, they decided to establish a second one at Stanford—with a twist. This time, they designated Tom's younger sister as the beneficiary, as a surprise for her birthday. The arrangement enabled them to help a family member for the duration of her lifetime.
"It's a wonderful way to help take care of somebody," says Kathy.
In addition, Kathy and Tom included a substantial bequest to Stanford in their plans, also to support graduate students.
Opened doors, and more good luck
Thinking back to their own years as students, Kathy and Tom attribute much of their success in life to the doors Stanford opened for them—and to their persistent good luck.
After graduation, the couple moved to Hawaii, where Tom trained for the army. Following his service in Vietnam, they both pursued teaching jobs in Rochester, New York, but Tom soon decided to make a change. Visiting the employment office one freezing day, he learned of an opening at a trust company—and as luck would have it, he could easily get there on foot using the city's warm underground tunnels. He landed the position and embraced a new career.
Soon the couple set their sights on returning to Hawaii. When they entered a contest advertised on a jar of Miracle Whip, they won a trip to the islands. Their ingenuity and Stanford credentials helped them secure jobs in Honolulu: Tom at Hawaiian Trust and Kathy as an English professor at the University of Hawaii, where she authored a widely-used textbook, When Writers Write.
Tom ventured back to campus for an executive education program in the 1980s—and found it very hard to leave Stanford again after the program ended. "Kathy insists she had to put a rope around me and pull me away," he says, laughing.
Two years ago, the Macdonalds returned to Northern California for good and bought a house in Carmel Valley. Now they are in a position not only to help graduate students, but also to see Stanford from another perspective. They have enjoyed visiting campus for performances and for Kathy's 50th reunion in October—an experience that "really strengthened our ties to Stanford," she says. With their planned giving arrangements, they know this connection will last.