In many cases, people who pledge money to schools or institutions cannot see the effects that their money will lead to. Why? Those funds are usually not released until they pass away.
A better option for some individuals is the option for early activation. With early activation, the funds are released to the school sooner, so students are aided immediately. Additionally, donors can see how those funds are used and how they affect people in the system.
Many people choose to create endowments through their estates, and those do help many people once the estate’s owner passes. Seeing that immediate return on investment is much more encouraging, though, for those who wish to donate. Not only do donors see how the money is used, but it also helps them build relationships with students who have received scholarships or benefits from the donations. On top of that, it’s possible for all donors to meet one another, so they can get to know others who are also interested in supporting the mutual cause.
You may not have previously been aware of the early activation option, but with tax benefits to boot, it’s one that you might want to consider. You can make contributions to the endowment’s fund from your IRA, meaning that you don’t have to add funds after taxes are taken. This encourages better funding with fewer tax requirements, so you can focus on providing the money and support you want to give to those who need it. If you’re over 70 and have to take money from your IRA, this is just one good way to spend it.