"It was a painless way of doing it," said Barbara B. Martin '56.

She was referring to the two gifts that she and Dean F. Martin '55 made under the auspices of the Pension Protection Act of 2006 (PPA).

Painless because they did not have to pay income tax on the funds nor did they have to write a personal check.

Under PPA, donors 70 1/2 years or older can give up to $100,000 directly from their Individual Retirement Accounts to their charities without any tax complications. Previously, donors would have had to declare the funds from their IRA's as taxable income and claim the deductions for their charitable giving, limited to 50 percent of their adjusted gross income.

The Martins' gift to Grinnell College under PPA was to endow their third chemistry scholarship, the Dean and Barbara Martin Scholarship (note: Dean's name is first in this scholarship). In 2002 they had previously endowed two chemistry scholarships, the Bessie Bursa Scholarship, in honor of Barbara's mother, and the Barbara and Dean Martin Scholarship funds (note: Barbara's name is first in this scholarship). All three endowed funds are to provide annual scholarships to Grinnell students majoring in chemistry or natural sciences with financial need and have demonstrated high academic achievement. They have also previously endowed a book fund to purchase books for the Windsor Science library and a travel fund to support trips of chemistry majors to professional meetings.

By nature, the Martins are deeply philanthropic, an outlook rooted in their life's experiences. Dean, whose family moved to Grinnell in 1940 when he was seven, attended Grinnell College on a tuition scholarship.
A classroom scene at Grinnell is etched in Dean's memory. As a first year student in 1951 Dean briefly had the legendary Dr. Fred Baumann as a history teacher. At class one day, Prof. Baumann told the students, "You folks are nothing but parasites living off of your parents!" Dean was incensed at the remark. He had never heard a Grinnell professor speak so harshly to students. He raised his hand and retorted, "We are not parasites; we are investments!" Later in life, Dean realized that Prof. Baumann routinely made outlandish remarks intentionally to provoke his students to think.

The majority of the Martins' philanthropy goes to higher education. That is, in part, because Dean and Barbara, his wife of 50 years, have spent their lives in education. Dean is now distinguished university professor emeritus at the University of South Florida, where he taught 42 of his 47-year teaching career. Barbara served as assistant professor of chemistry (courtesy) during Dean's tenure. Both still go to their lab daily where they are working with some undergraduates on a compound that removes arsenic and other chemical species from water. The compound is about to go commercial.

Complementing the Martins' generosity is their prudence. The Martins have lived in the same house for the last 42 years. They once kept a 1974 Nova in hopes that it would become a "Classic Nova." They generally limited their travel to professional meetings. What they saved from not spending on material goods, the Martins spent on education, sending their six children - five sons and one daughter - to private schools. Son Eric C. Martin '91 graduated from Grinnell College.

Today, Dean and Barbara still look at students as "investments." In their view, buildings can be torn down, but an endowed scholarship lasts into perpetuity. The Martins continue to keep faith with the value of a good education.

They hope that PPA will be renewed. They view it as an instrument that would enable them to more easily continue investing in the future of students.

For information regarding how to make a gift to Grinnell College under the Pension Protection Act of 2006, contact Sandy Durbala (641-269-4514, durbala@grinnell.edu) or Neill Goltz (641-269-4204, goltzn@grinnell.edu) or the Office of College and Alumni Relations, toll free 866-850-1846.

or A discussion of the Pension Protection Act of 2006 (PPA06)

Although George Simon '55 missed his opportunity to be the first Grinnellian in space as a NASA payload specialist, he has been helpful to Neill Goltz, CLU, the College's director of planned giving, in analyzing the utility of PPA06.
After receiving the initial information from the College this past August, George took it upon himself to examine his and his wife Pat's income tax situation with respect to their gifting to Grinnell and other favorite charitable organizations. He discovered that some people could significantly reduce their income taxes by using their IRA account(s) as the direct source of funds for their existing charitable giving. (See Tax Analyzer Scenario #1.)

For example, in one scenario they found that a couple with little or no mortgage interest, $3,000 in property taxes, $2,000 of state income tax, and $10,000 of charitable deductions might save approximately $1,000 per year in federal income tax with this technique.

This couple would reduce their income by $10,000 with direct transfers to charity from their IRA, thereby reducing their itemized deductions from $15,000 to $5,000. But then they would qualify for the Standard Deduction of $12,300 and thus "gain" another $7,300 of deductions to reduce taxable income. In a 15% tax bracket, this saves another $1,100 in federal income tax. (The Standard Deduction is $6,400 for single people.)

George and Neill's analyses may also be relevant to persons who have not previously been as charitably-inclined, but who now or shortly will be required to take income from their IRAs due to the Minimum Required Distribution (MRD) provision which comes into effect at Age 70 ½. If this income is not needed, it's an opportunity to give it to charity and get a substantial income tax benefit.

Goltz's original mailing had focused on the ability to go beyond the MRD and make major gifts from an IRA account in excess of 50% of current income, a situation which previously would have increased a donor's taxes. (See Tax Analyzer Scenario #2.)

Neill and George hope this tax planning information is helpful to friends of Grinnell.

Please contact Neill Goltz or Sandy Durbala toll-free at 1 866 850 1846 for help with using the Tax Analyzers in evaluating your situation.