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McKenzie Scholarship Ensures a Generous Spirit Lives On

malcom-mckenzie.jpg"Our CPA then ran some figures showing us what we would receive after taxes versus what the two universities would receive if we disclaimed our inheritance to Dad's IRA. It was very clear that the universities would receive far more than either of us, and we knew how much good those extra funds could do."

—Barbara McKenzie

When Malcolm Marshall McKenzie died in 2006, he left family and friends with many fond memories. He also left a philanthropic legacy that will resonate for generations at higher-education institutions throughout the Midwest, including Drake University.

McKenzie, a 1948 graduate with an M.A. in economics and education, realized the value of a college education and also knew firsthand the struggles of coming up with money for tuition, fees, books, room and board. Upon his death, he left generous gifts to establish endowed scholarship funds at his alma maters, Bradley University and Drake, as well as in honor of his son, Gordon McKenzie, at the University of Iowa and the University of Missouri, and his daughter, Barbara McKenzie, at the University of Iowa and Indiana University.

In 1941, the Monmouth, Illinois, native graduated from Bradley University with a degree in industrial arts and mechanical engineering. He worked in the metallurgical laboratories at Caterpillar, Inc. before serving in the U.S. Air Force during World War II. When his tour of duty ended, McKenzie moved to Des Moines to work for the Veteran's Administration as a training officer, while also attending Drake University.

As a Drake student, McKenzie developed a love for investing. In January of 1949, he went to work for Thomson McKinnon Securities Inc., when the Dow Jones industrial average was 117.05. Five years later, he joined Merrill Lynch where he worked for the next 48 years until his retirement at the age of 80.

Altogether, his educational experiences prepared him for a varied, fulfilling and successful life—one marked by extraordinary commitment to his family and profession, as well as many charitable and civic activities.

Prior to his death, McKenzie worked with Drake's Office of Planned Giving to establish an endowed scholarship, which would be funded by an IRA upon his death. In doing so, he was able to work with the University in shaping the use of his deferred commitment. Today, the endowed Malcolm M. McKenzie Scholarship continues to support students with financial need in the College of Business and Public Administration pursuing degrees in the areas of economics and finance.

In more ways than one, Gordon and Barbara are following in their father's footsteps. In keeping with his generosity, the two decided to also support the scholarship by disclaiming the IRA they inherited from him.

"When we were valuing the components of Dad's estate, our CPA actually thought to have us check to see if Dad had listed any contingent beneficiaries on his IRA account," Gordon says. "Lo and behold, he had listed his two alma maters, Drake and Bradley, at 50 percent each."

"Our CPA then ran some figures showing us what we would receive after taxes versus what the two universities would receive if we disclaimed our inheritance to Dad's IRA," Barbara adds. "It was very clear that the universities would receive far more than either of us, and we knew how much good those extra funds could do."

Naming Drake as a contingent beneficiary of his IRA account was an ideal way for McKenzie to establish his legacy at Drake, as well as other schools. McKenzie understood the disadvantages of designating IRA's to family members, so he chose to give these assets to charity upon his death. This decision was fully revocable in case his personal situation or wishes changed during his lifetime.

As a result, current and future Drake students will benefit from Malcolm McKenzie's philanthropy, and Gordon and Barbara can celebrate the legacy of their father with those that follow in his footsteps. 

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A charitable bequest is one or two sentences in your will or living trust that leave to Drake University a specific item, an amount of money, a gift contingent upon certain events or a percentage of your estate.

an individual or organization designated to receive benefits or funds under a will or other contract, such as an insurance policy, trust or retirement plan

"I give to Drake University, a nonprofit corporation currently located at 2507 University Ave., Des Moines, IA 50311, or its successor thereto, ______________* [written amount or percentage of the estate or description of property] for its unrestricted use and purpose."

able to be changed or cancelled

A revocable living trust is set up during your lifetime and can be revoked at any time before death. They allow assets held in the trust to pass directly to beneficiaries without probate court proceedings and can also reduce federal estate taxes.

cannot be changed or cancelled

tax on gifts generally paid by the person making the gift rather than the recipient

the original value of an asset, such as stock, before its appreciation or depreciation

the growth in value of an asset like stock or real estate since the original purchase

the price a willing buyer and willing seller can agree on

The person receiving the gift annuity payments.

the part of an estate left after debts, taxes and specific bequests have been paid

a written and properly witnessed legal change to a will

the person named in a will to manage the estate, collect the property, pay any debt, and distribute property according to the will

A donor advised fund is an account that you set up but which is managed by a nonprofit organization. You contribute to the account, which grows tax-free. You can recommend how much (and how often) you want to distribute money from that fund to Drake or other charities. You cannot direct the gifts.

An endowed gift can create a new endowment or add to an existing endowment. The principal of the endowment is invested and a portion of the principal’s earnings are used each year to support our mission.

Tax on the growth in value of an asset—such as real estate or stock—since its original purchase.

Securities, real estate, or any other property having a fair market value greater than its original purchase price.

Real estate can be a personal residence, vacation home, timeshare property, farm, commercial property or undeveloped land.

A charitable remainder trust provides you or other named individuals income each year for life or a period not exceeding 20 years from assets you give to the trust you create.

You give assets to a trust that pays our organization set payments for a number of years, which you choose. The longer the length of time, the better the gift tax savings to you. When the term is up, the remaining trust assets go to you, your family or other beneficiaries you select. This is an excellent way to transfer property to family members at a minimal cost.

You fund this type of trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. You can also make additional gifts; each one also qualifies for a tax deduction. The trust pays you, each year, a variable amount based on a fixed percentage of the fair market value of the trust assets. When the trust terminates, the remaining principal goes to Drake as a lump sum.

You fund this trust with cash or appreciated assets—and receive an immediate federal income tax charitable deduction. Each year the trust pays you or another named individual the same dollar amount you choose at the start. When the trust terminates, the remaining principal goes to Drake as a lump sum.

A beneficiary designation clearly identifies how specific assets will be distributed after your death.

A charitable gift annuity involves a simple contract between you and Drake where you agree to make a gift to Drake and we, in return, agree to pay you (and someone else, if you choose) a fixed amount each year for the rest of your life.

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