Couple Makes Scholarship Gift with Charitable IRA Rollover
John Richardson had to do something.
So he and his wife Nancy did — and Texas Tech University business students will benefit in perpetuity.
You can make the same, financially savvy gift and help Red Raiders better navigate the cost of higher education.
It’s called a Charitable IRA Rollover.
The Richardsons used it this year to establish the Robert John and Nancy Richardson Scholarship Endowment. It benefits students in the Rawls College of Business, specifically those with 60-plus hours completed towards their business degree who also have financial need.
John understands financial need.
“I was raised by people who grew up in hard times,” he said of his family’s experience during the Great Depression in the 1930s.
He started working in high school, which gave him a good work ethic. He had enough money to buy a car — but didn’t have time to play sports.
It was also more of a challenge to do a good job in school, so he wants to help students focus more on their studies.
“We decided we want to build an endowment and add to it because we want kids to get the help that I couldn’t get to go to college,” said John.
And the Charitable IRA Rollover makes it easy.
When people turn 70½ years old, they are required to withdraw a minimum amount every year from their traditional IRA accounts, also known as a required minimum distribution.
But that money is taxed as income.
If people don’t want more income on their taxes, they can choose to donate up to $100,000 of that money instead.
This was an easy choice for the Richardsons, who don’t need the income right now and have a desire to help others. They used their required minimum distribution to establish their scholarship endowment at Texas Tech, and they plan to add to the endowment every year with gifts from their retirement account.
“It helps solve tax issues,” John said.
What you need to know about Charitable IRA Rollovers
For Nathan Rice, director of gift planning for the Texas Tech University System, Charitable IRA Rollovers are a natural way for alumni to realize their financial and philanthropic goals.
“It’s easy, and it’s a tax-savvy way to make a gift to Texas Tech,” he said.
- You have to be 70½ or older.
- The money must come from a traditional IRA.
- The money has to go directly to the charity. You cannot cash it out first.
- Giving is easy, your IRA administrator can handle the transfer for you.
- The most-common gift is $5,000, and the second-most-common gift is the maximum contribution of $100,000.
- The Charitable IRA Rollover is now a permanent giving option, available year-round.
“The donor gets to support what they are most passionate about — student scholarships, faculty endowments, facilities, innovative research,” added Rice.
Richardson the Red Raider
John graduated from Texas Tech in 1965 with a degree in industrial management.
He started at other colleges, but transferred to Texas Tech to take advantage of in-state tuition when his parents moved to Lubbock.
John thought he wanted to be an electrical engineer, and he worked summers to pay for school or “I wouldn’t have been able to go,” he said.
“But all the skills God gave me were in the business area, and I never looked back. In engineering, I had to study my can off to get Cs,” said John.
Nancy added: “This is an engineering major who got the only A in his accounting class.”
While pursuing his MBA, he was inducted into Sigma Iota Epsilon — a national professional management honor society — and graduated summa cum laude.
“To this day we have a lot of friends who call John to ask for financial advice,” said Nancy.
Giving Back to Texas Tech
The Richardsons live in Plano after John’s long career in finance and Nancy’s career with AT&T.
They invested wisely and were fortunate to be able to retire early.
“We decided we want to build an endowment and add to it because we want kids to get the help that I couldn’t get to go to college.”
“The definition of good luck is when preparation meets opportunity,” said John.
That good luck, as John puts it, has allowed them to be generous with his alma mater, the only college he attended that he supports through philanthropy.
“It’s just a good, solid school. All my experience and memories are good,” he said.
The couple’s daughter also went to Texas Tech University, and today, their grandchildren are also interested in becoming Red Raiders.
Nancy added, “We appreciate our college educations and appreciate Texas Tech.”
John said the couple is also setting up a trust, and Texas Tech will be the largest beneficiary. They plan to make a gift from their trust to benefit their scholarship endowment in the Rawls College of Business, ensuring that students can continue to benefit and have the opportunity to focus on getting a quality education long into the future.
It’s another way that the Richardsons are giving back to the university that gave so much to them and making a college education easier for a new generation of business leaders and Red Raiders.