Enhancing Opportunities for Minority Students

1. Enhancing Opportunities for Minority Students Scholarships/fellowships Experiential learning opportunities Stipends Quality entry jobs

2. Raising the School’s Reputation Key measures for rankings: • Quality of the entry class • Timely placement after graduation • High starting salary • Student satisfaction

3. Student and School Goals Intersect • Students desire and need scholarship/fellowship dollars • Competition for top students is intense • Competition for minority students is heightened. • Top minority students receive offers for full tuition and a stipend from Business Schools

4. Student and School Goals Intersect • Obviously students desire jobs at high salary levels right out of school. • Minority students are sought after by employers--their employment rates following graduation are higher • The higher the ability level of the student and the background of his/her experiences the higher the salary/position

5. Objectives • Produce a large pool of funds for diversity scholarships and fellowships. • Establish a robust network of experiential opportunities for students. • Increase the number of quality initial employment opportunities where Pitt MBA and CBA students are sought after.

6. Part 1: Building the “Pool” Everyone can make a significant impact on the availability of dollars for students through: Annual Giving Multi-Year Commitments Planned Gifts

7. Annual Giving Common Methods include: Check or Cash Transfer of stock Automatic withdrawal: $83.33/month = $1,000/year $41.66/month = $500/year

8. Multi-Year Commitments Gifts usually above $2,000 per year that typically establish a current or endowed fund usually for a designated purpose. Common methods: • Pledges of cash up to five years • Stock transfers • Gifts in conjunction with retirement

9. Planned Gifts All giving can be increased exponentially through Planned Gifts: • Bequests • Annuities • Trusts • Life Insurance • IRA Rollovers

10. Bequests • Once all heirs are provided, consider writing diversity support into your estate. • Typical gifts are: 5-10% of estates for donors with families and larger amounts for donors with few heirs. • Further, we can count many of these gifts to the fundraising total with minimal documentation

11. Annuities Individuals and couples can receive fixed payments guaranteed against the assets of the University, a tax deduction and designate the purpose of the remaining principle after a donor’s lifetime(s).

12. Charitable Remainder Unitrusts Individuals and couples can create a trust, receive a tax deduction, receive distributions at a fixed percentage rate that fluctuate according to the value of the investments in the trust.

13. Life Insurance • Individuals can purchase a life insurance policy with diversity at Pitt Business designated as the beneficiary.

14. Examples A 62 and 60 year old couple

15. Income Projection Assumptions • Projection begins in 2011 and runs for 28 years. • Measuring lives age 62, 60. • Original principal is $100,000. • Donor income tax bracket is 28%, 15% for capital gains. • Beneficiary income tax bracket is 28%, 15% for capital gains. • Income is 3%, appreciation is 5%.

16. First Year Analysis: Return Based on Cost of Plan ASSUMPTIONS: Cash gift of $100,000. Beneficiaries age 62, 60. Donor's marginal income tax bracket is 28%. Charitable Gift Annuity Charitable Gift Annuity Deferred to 70 68 Unitrust Income Rate 5% 7.5% 5% (a) Principal $100,000 $100,000 $100,000 (b) Income $5,000 $7,500 $5,000 (fixed) (fixed) (fixed) (variable) Tax-free Portion $3,175* $3,892* (c) Charitable $8,872 $16,749 $28,705 Deduction f) Rate of Return 5.1% 7.9% 5.4% Equivalent 6.4% ** 9.5% *** Rate of Return * After 28.7 years, the entire annuity becomes ordinary income. ** Adjusted upward because tax-free portion of $3,175 makes the $5,000 annuity equivalent to $6,235 of taxable income for a beneficiary in the 28% income tax bracket. *** Adjusted upward because tax-free portion of $3,892 makes the $7,500 annuity equivalent to $9,014 of taxable income for a beneficiary in the 28% income tax bracket. Column 1: gift annuity with 10% or less charitable deduction. IRS Discount Rate is 2.8% These calculations are for illustration purposes only and should not be considered legal, accounting, or other professional advice. Your actual benefits may vary depending on the timing of the gift.

17. After Tax Income ($ in thousands)

18. Approximate CostsTuition, Fees and Stipend Two year program/per year: $25,000 in state $33,000 out of state One year program: $43,000 in state $57,000 out of state

19. Current Gift Language It is the hope of the Donor that the Scholarship Fund will assist the University in achieving its goal of attracting and retaining students who contribute to the diversity of the student body at the University of Pittsburgh.  This support is renewable for up to four years, provided that the recipient continues to meet the academic standards of the University. 

20. Part 2: Experiential Opportunities and Initial Job Opportunities To be continued at 1:00