50th Reunion Legacy Campaign Update & Request

Hello vaccine, goodbye pandemic

I hope 2021 finds you in good health and safe as we all seek to line-up for the “over 70’s” priority lane for our COVID vaccine shots. I’m optimistic that ALL of us will be able to physically get together in the fall of 2022 for our 50^th reunion!

My reason for writing is two-fold: (1) to provide you with an annual progress update on our 50^th Reunion Legacy Campaign, now entering its 4^th year (it will expire, more or less, at the end of 2022 as we celebrate our 50^th); and (2) to check the interest for those classmates that have outstanding pledges for our class campaign if they would consider redirecting and extending their pledge to support funding for the new Alumni Association and Foundation Center, which needs $7 Million in additional funding in order to be completed. I’ll explain all this later in this memo.

Regarding our progress on the campaign-front, through the first three years (2018 => 2020) we continue to inch forward as more classmates have joined in, or otherwise made contributions to the Naval Academy Annual Fund, which count. Bottom line, what’s been either donated or still in the pledge pipeline now totals $ 6.34 Million, crushing our $5 Million goal and remaining the highest amount of money ever raised in Naval Academy class-giving campaign history! Here’s the latest breakdown:

January 2021 Update

• Exceeded $5 Million goal by $1.34 Million: “matching” challenge of anonymous classmate met
• Many classmates used 401K & IRA Required Minimum Distribution (RMD) option
• Participation rate around 46%…highest ever!
• 50^th Legacy Campaign is our last “official” campaign…going forward fundraising will be “opportunity-based”

                                                                                                                             Amount:   % of goal

USNA Annual Fund:                                                                                           $ 1.31M      (175%)   (goal: $.75M)

1972 Athletic Facility & Excellence Fund:                                                       $ 2.50M      (100%)   (goal: $2.5M)

(Class of 1972 name displayed within the Sports & Rehab. Centre – see below)

1972 DMP for Character Development Fund:                                                  $ 1.78M      (178%)    (goal: $1M)

1972 Project-Based Learning Fund:                                                                 $   .75M      (100%)    (goal: $.75)

TOTAL                                                                                                                  $ 6.34M      (127%)    (goal: $5M)

Regarding the $7 Million the Foundation needs to complete the new Alumni Assoc. & Foundation Center, there’s a unique opportunity for us to extend our class’s recognition by becoming a “plank-owner.” In the words of the Foundation: We are pleased to offer a unique opportunity for class recognition as part of the U.S. Naval Academy Alumni Association and Foundation Center project, which will be displayed in perpetuity in the North Garden Terrace located on the front side of the building for all guests to see, in addition to any vehicular traffic on King George Street. This recognition is focused on two levels of class support, $250,000 and $100,000. Enclosed are some wall illustrations regarding how the class plankowners might be recognized.

So how, you may ask, might this work for the Class of 1972?

• Instead of having your pledge expire at the end of 2022, we ask that you redirect and extend it four more years until 2026 (the Foundation’s five-year goal runs from 2021 => 2026).
• Example: if the class collectively pledged $25K a year for these four years, that would count as a $100,000 plank. If we pledged approx. $63K for the four years, the class receive a $250,000 plank.
• Many of you have already been lifelong donors to USNA and might otherwise be seeking some way to continue that pattern for something worthwhile to both the Academy and the Class. I was impressed with the enthusiasm the class demonstrated for the naming opportunity for the Sports & Rehabilitation Center project in which we raised $2.5 Million (see photos). Could we extend this enthusiasm to the new Alumni Association & Foundation Center?
• Finally, there’s a very real “tax tool” some of you could utilize (for those that already have tax-protected IRAs) by donating a portion of your RMD (Required Minimum Distribution) THAT YOU ARE ANYWAY GOING TO BE FORCED TO BEGIN DRAWING DOWN TO AVOID A 50% PENALTY BEGINNING AT AGE 72! Two examples:
  • Retired Navy Veteran W.T. Door, a graduate of the USNA class of 1972, has $100,000 in his IRA that he so far has been safeguarding and not withdrawing as he has been reluctant to pay the FULL INCOME TAX on his minimum required distribution. He’s 70, and knows the law says that, by age 72, he MUST begin that withdrawal. He consults the IRS tables and finds that the IRS Uniform Lifetime Table gives him a factor of 25.6 (remaining years to live). He does the math ($100,000/25.6) and realizes he must withdraw a minimum of $3906 in 2022. Since he’s in the 24% tax bracket, he will pay the IRS $937, meaning he’ll only pocket $2969. He further realizes that for the four years extending to 2026, he’ll have to withdraw almost $15,624 and pay Uncle Sam $3750 in taxes, leaving him net only $11,874. He’s bitter but “it is what it is” as W.T. Door would often say.
  • Door’s next-door neighbour and former retired Navy Captain, B. T. Crunch (yes, Captain Crunch) was also a ’72 classmate, and has the same problem. Same IRA level ($100,000); same age (age 70 but will be 72 in 2022). Same math (minimum $3906 withdrawal in 2020), but Crunch decides to donate his entire RMD for that year and beyond to 2026 to USNA’s new Alumni Association & Foundation Center He directs his IRA manager to send the USNA Foundation $3906 per year for four years ($15,624) and signs the pledge card. The Foundation sends back an official letter, and B.T. is able to DEDUCT the full $3906 from his federal taxes, saving him $937 per year in reduced federal income taxes, or $3748 over the four-year pledge period. Crunch is pleased with his decision and thinks about it every time he visits the new Alumni Center and sees the ’72 class crest prominently displayed on the front side of the building.
  • So, bottom line, W.T. Door nets $11,874 after paying Uncle Sam $3750 in taxes while Captain Crunch & The Foundation net $15,624 AND Crunch gets an $3750 tax deduction that he gets to apply to his taxes!

The point is, if you are anyway going to be contributing to or donating to USNA, you might as well capitalize on (for those that have them) the IRA savings that you’re anyway going to need to draw down and use…and pay tax on that withdrawal…or you can donate all or part of it to USNA and realize the full tax savings!

So, here’s my request: for those of you that think you might be interested in being part of this new Class of ’72 fundraising effort, could you please drop me an e-mail to indicate your interest as well as the amount per year (2022 => 2026) that you might be willing to sign on for. I’ll tabulate the results and see how that translates into the number of “planks” our class might be able to sponsor. I’ll also provide more detailed information regarding on how to make the pledge. Additionally, I realize the entire RMD thing and the tax issue is a bit complicated to fully understand, but the examples give you an idea, and we’ll be able to provide more specific detail if that’s the road you want to go down.

Please send your response to my e-mail: jeffreyb72@icloud.com.

Thanks

Jeff Beard