William'39 and Barbara Brown Bachmeyer'38 were trailblazers in their support of Beloit College. They were the first alumni to participate in the charitable gift annuity program of Beloit College when it began in 1997.
They recognized charitable gift annuities as the perfect avenue to make a significant gift to enhance an endowed scholarship they had established earlier, while at the same time providing a continuous lifetime income for themselves.
Their generosity and foresight have led to:
- an 8.5 percent interest rate annually on their gift
- more than $90,000 of partially tax-free income during the last decade of the alumni couple's lives
- an ultimate gift of more than $53,000 to fund the Brown-Gregory-Bachmeyer Scholarship at Beloit College in perpetuity.
It all started when the Bachmeyers were considering a special gift to the College to recognize their 60th class reunions in 1998 and 1999. Barbara was inspired to continue a family legacy of support to Beloit College that began with her great-grandfather Benjamin Brown, a Beloit pioneer who mustered the money and materials needed to put a roof on the Middle College building in 1848. Her parents, maternal and paternal grandparents, and many extended family all rank among Beloit's generous alumni.
The Bachmeyers had established the B. Warren and Marjorie Gregory Brown Endowed Scholarship in 1970 in honor of Barbara's parents, who had both grown up in Beloit, graduated from Beloit College (he in 1907 and she in 1909) and became strong proponents for liberal arts education. Her father spent 30 years as a professor at the University of Chicago. The scholarship is awarded annually, and at the request of the Bachmeyers, students from the city of Beloit are given preference in the selection process. The Bachmeyer name has been added to the scholarship in recognition of the couple's ultimate gift.
Acting on the advice of their financial advisor, the Bachmeyers funded two charitable gift annuity agreements with highly appreciated stock, which they had held for many years. In exchange for transferring the stock to Beloit, they received an immediate income tax deduction and favorable treatment of the capital gains realized on the donated assets. Based on their ages at the time of the gift, which was valued at $105,800, they received a guaranteed 8.5 percent annuity for their lifetimes. Because the annuities were held jointly, Barbara continued to receive her husband's portion of the quarterly annuity payments after he died in 2003. When Barbara died in 2008, the payments ceased and Beloit College was pleased to transfer approximately $53,000 in residual funds from the annuity agreements to the Bachmeyers' endowed scholarship fund as their final gift.
Today, if a couple established a charitable gift annuity at ages 82 and 81, the same ages the Bachmeyers were at the time of their gift, they would receive a rate of 6.3 percent. With a gift of $50,000, their charitable gift annuity would yield $3,150 in payments annually. The rates vary based on the annuitant's age, and deferring payments for several years will result in a higher rate. The residual funds at the termination of the annuity will vary based on investment performance, but the goal of the program is to generate residual funds of at least 50 percent of each original gift.
Beloit College's annuity rates are set in accordance with the American Council on Gift Annuities, a nonprofit organization that promotes responsible philanthropy and consumer protection by providing actuarially sound gift annuity rate recommendations. Gift annuity programs are state-regulated and are required to be backed by substantial reserve assets.
Declining interest rates for certificates of deposit make charitable gift annuities a very attractive way for friends of Beloit College to have the security of guaranteed income for life and the knowledge that their gift will help to continue the Beloit College tradition for future generations.