I would love to hear from our financial advisor brothers what their thoughts
are on this. Again, I like Bill's idea, but will still contribute whatever is
decided.
Dan
________________________________
From: fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx
<fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx> on behalf of
Edward Retta <eretta@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx>
Sent: Wednesday, January 13, 2021 1:14 PM
To: fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx
<fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>
Subject: [fighting_texas_aggie_band_class_of_1977] Re: Memorial Fund
Do we buy a fast food franchise or open our own burger joint?
As I see it.
The point is good food.
Like most of life, what’s the cost vs. benefits ratio?
Q,
…not Anon!
On Jan 13, 2021, at 11:44 AM, Bill Schwennsen (Redacted sender "schwbill" for
DMARC) <dmarc-noreply@xxxxxxxxxxxxx<mailto:dmarc-noreply@xxxxxxxxxxxxx>> wrote:
Thanks for this "front line" info on your experience Ed.
I suppose that another alternative for us would be to establish our own 501(c)3
account, and manage the fund ourselves. The cost to establish a (c)3 is pretty
minimal. Once it is established, we could then send in money as individuals
for deposit into the account. We'd have to file a tax return every year, but
given our purpose and the amount of money that would be coming in (not
millions, but hey we'll take it) that wouldn't be a big deal from an expense
standpoint. Again, there would be some details to discuss as a class about
this course of action, but it would probably be the least expensive, and also
provide us the the most control over the fund money, how it's managed, and how
it's disbursed.
Just some additional food for thought.
BSch
-----Original Message-----
From: Edward Retta
<eretta@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx<mailto:eretta@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx>>
To:
fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>
Sent: Wed, Jan 13, 2021 11:27 am
Subject: [fighting_texas_aggie_band_class_of_1977] Re: Memorial Fund
Thanks guys for all this gum-shoe work.
I also do not want to denigrate the Foundation and all they do. Am glad they
exist. So this is off the record… But, with our TAMU Hispanic Network, we
learned the F was not always our friend, not easy to work with and pretty
controlling. As Bill has observed, lots of overhead… they were very territorial
about our donors and any new donor prospects we drummed up. Didn’t share info
in a collaborative way, but I understand reasons why. Not a criticism, just an
observation. We eventually kept our own accounts and regional Hispanic Aggie
groups are free to raise money and give it away by total local control.
Basically, we had lots of challenges in the beginning, with the various
bureaucracies in the systems, not just the F., the AFS was also a challenge to
navigate. They opposed our formation at first, now we are an official sub-set
of AFS.
I would be just as happy to donate money into our own, managed fund, with or
without "on campus” officialdom, and channel as much as we can to BQ cadets.
But, I will support the collective will of our group.
Edward Retta
crossculturecommunications.com<https://na01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fcrossculturecommunications.com%2F&data=04%7C01%7C%7Cd144f9336b574dd00ddd08d8b7ef0e2a%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637461584648491699%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=qRBDJ0eG9UO%2Bm7t6MJ%2FgUZd8pmlbvMTo%2FlZFGKZxscM%3D&reserved=0>
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On Jan 13, 2021, at 10:13 AM, DANNY POPHIN
<danpophin@xxxxxxx<mailto:danpophin@xxxxxxx>> wrote:
I have to agree with Bill's assessment. This seems to be a hefty fee for what
we are trying to accomplish here. And if we are restricted to only giving a
scholarship/gift to a BQ, the 4% on the gain for the year is not much.
Dan
________________________________
From:
fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx><fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx>>
on behalf of Bill Schwennsen
<dmarc-noreply@xxxxxxxxxxxxx<mailto:dmarc-noreply@xxxxxxxxxxxxx>>
Sent: Wednesday, January 13, 2021 11:08 AM
To:
fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx><fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>>
Subject: [fighting_texas_aggie_band_class_of_1977] Re: Memorial Fund
Dean, thanks for sending the PDF. Here's how I see it:
The 5% "gift tax" is taken from the earnings on the gift, not from the
principal itself. This "tax" is taken, in our case, after the total of gifts
to our account meets or exceeds $25,000. Since the tax at 5% is more than the
annual scholarship payout of 4%, you can surmise that, once we meet the $25K
goal, it will still be 18 months, to maybe 2 years, before the first
scholarship disbursement is actually made. The faster we get to, or exceed,
the $25K minimum threshold, the sooner that we can start chipping away at that
"gift tax', get that satisfied, and start the clock on accumulating enough
earnings in the account to actually pay a scholarship.
If the Class will allow me an opinion here.... the Foundation does a great job,
but this 5% tax they put on gifts can be (and has been with some Aggies I know)
a deterrent for some potential donors. They are professional fund raisers, and
employ professional money managers (either directly or by contract). That's a
lot of overhead to cover. The 1% annual expense fee is supposed to cover
year-to-year operating expenses, and I'm sure it does... but that begs the
question of what the 5% gift tax is used for. I don't know... I could
speculate but I won't. I'm not in any way downing the Foundation here, but
we're trying to raise what is, for them, a pretty modest amount of money and I
think we need to make sure we as a Class are happy with whatever arrangements
are made.
Those of you who attended the 125 year BQ reunion in '19 might have heard the
TABA Prez at the time talk about the TABA establishing their own fund to throw
off income that could be used for scholarships for the Band, or possibly other
purposes benefitting the FTAB. The TABA runs their money through the Corps of
Cadets Association (CCA).. The CCA manages the TABA's demand accounts for them.
Although the CCA has overhead expenses also, they do NOT charge any sort of
"gift tax" that I'm aware of. I believe that Rick Ashley and Tom Henry are
both in TABA leadership positions; it might be worth reaching out to them to
see if the TABA/CCA have a vehicle that we might use in establishing our
account and what the details are. Again, I'm not trying to pit one
organization against the other (TABA/CCA vs Foundation), I'm just trying to
point out that their might be another avenue worth checking out before we all
start writing checks.
Knowledge is power, and also usually makes for happy donors (and investors). I
hope all of you are well and are managing to avoid the Covid.
BSch
-----Original Message-----
From: Dean B <canyonag77@xxxxxxxxxxx<mailto:canyonag77@xxxxxxxxxxx>>
To:
fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>
<fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>>
Sent: Wed, Jan 13, 2021 9:45 am
Subject: [fighting_texas_aggie_band_class_of_1977] Re: Memorial Fund
You finance whizzes can read the PDF and correct me, but to give my reading of
the Foundation's policy:
The Foundation does not take money from the donation principal.
They collect a one-time fee equal to 5% of the donation, they collect that from
the gains on the donation.
They collect a yearly management fee of 1%, again from the gains, not from the
endowment principal.
The award to the recipient is 4% of the gain on the account. I'm not sure if
gains in excess of the 4% award and 1% fee go back into "our" account.
________________________________
From:
fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx><fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977-bounce@xxxxxxxxxxxxx>>
on behalf of Dean B <canyonag77@xxxxxxxxxxx<mailto:canyonag77@xxxxxxxxxxx>>
Sent: Wednesday, January 13, 2021 9:09 AM
To:
fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx><fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx<mailto:fighting_texas_aggie_band_class_of_1977@xxxxxxxxxxxxx>>
Subject: [fighting_texas_aggie_band_class_of_1977] Re: Memorial Fund
You are correct, Bill.
https://cdn.txamfoundation.com/How%20to%20give/The%20Gift%20Process/EXHIBIT_A_Effective_7-1-2020.pdf<https://na01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fcdn.txamfoundation.com%2FHow%2520to%2520give%2FThe%2520Gift%2520Process%2FEXHIBIT_A_Effective_7-1-2020.pdf&data=04%7C01%7C%7Cd144f9336b574dd00ddd08d8b7ef0e2a%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637461584648491699%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=yShaP%2FLa%2F%2FfCIIz5Dj%2BN97MxVJcZzN40o5dMVRr%2Fsxc%3D&reserved=0>
