<p>tax deduction</p>
<p>If I ever make bank my elementary school will get a nice chunk of change</p>
<p>Oh yeah, I’m sure Ross donated $100 million for tax deductions…</p>
<p>You are absolutely naive if you think most of the big ticket donations are paid in immediate cash. Most of these donations are at best an annuity payout or stocks and at worst portfolio of private companies/real assets. Sometimes these assets (especially the latter) are illiquid and hard to dispose without taking a huge hit. Theoretically, the tax shield you get could be greater than the (actual value - disposal cost - liquidity premium). For instance, assuming a marginal tax rate of 35% and you want to reap in the proceeds from a sale of a small private company in a slow capital market environment in a short horizon, you might end up getting more by donating the asset and receiving a tax deduction at the full price of the asset than a fire sale of an illiquid asset or dumping a large % of a stock in the market at a time. While you are doing this, you will also be able to put your name on a building at your alma mater</p>
<p>You’ll also be surprised how creative professionals can be wrt tax and structure of the payout of the donation. For example, you can claim the deduction in present value discounted using a lower rate (say the 10y t-bill rate which is around 340bps and was as low as 250bps back in the summer) than your actual cost of capital …So a 100M donation on notional face value (especially a long tenor one with most of the payout structured towards the end) <em>could</em> pay itself off in immediate tax advantage using “creative accounting/discounting”</p>
<p>I am not disputing the fact that there are alumni who donate due to their sheer love of the school, but remember the truly wealthy always have professionals behind the scene to calculate the cost/benefit of every transaction, so you cant take any big ticket donation at face value. Just because someone “donated” 100M doesnt mean he actually donated 100M</p>
<p>Guess the 'furd guys didn’t like the Berkeley guy. ;)</p>
<p>Other news you Michigan peeps might find interesting:
[Former</a> Michigan Gov. Granholm to teach at UC Berkeley](<a href=“http://newscenter.berkeley.edu/2011/01/24/former-michigan-gov-granholm-to-teach-at-uc-berkeley/]Former”>Former Michigan Gov. Granholm to teach at UC Berkeley | Berkeley News)</p>
<p>Made front page website news today at berkeley.edu.</p>
<p>(Didn’t want to start a new thread)</p>
<p>As an alum of Cal, You can have her UCB. I wonder if she will teach a class on how to, “blow away” an entire state? We now have a governor who attended Michigan both at the undergraduate and graduate levels. We should start to rebound fairly soon. ;-)</p>
<p>^ That’s why I posted here…wanted a different perspective than the gushing reviews in the article. What you mean by “blow away”…perhaps you’re giving her too much credit (like the article did). :)</p>
<p>Here ya go UCB. This youtube video will give you some idea of what we now think of Grandmole:</p>
<p>[YouTube</a> - Jennifer Granholm Job Losses TV Ad](<a href=“Jennifer Granholm Job Losses TV Ad - YouTube”>Jennifer Granholm Job Losses TV Ad - YouTube)</p>
<p>Good ad…</p>