Leaving a Legacy While on a Budget

Harvard was named after its first benefactor, John Harvard. Leland Stanford, a railroad tycoon, founded a university in honor of his son, who died at 16. Andrew Carnegie established public libraries. Since gifts of millions are out of reach for most, what can you do to leave a legacy?

The answer is: a lot. John MacRae, director of major gifts at Harvard Law School, tells us "Scholarships are one of our greatest needs. Two hundred fifity thousand dollars will establish a perpetual scholarship fund with your name on it."

You might get an even bigger bang for your buck at schools where wealthy donors may not be as plentiful. The price for immortality is set by whatever the market will bear.

You might establish a scholarship for a student from your hometown or high school, or for someone whose struggles in life mirror your own.

Another idea is to find a unique need to fill. I recall a client proudly describing how he and his family noticed that their high school scoreboard was deteriorating. A new scoreboard bearing the family name now gives him a great source of lasting pride.

The challenge with "specific purpose" scholarships is ensuring proper management over the years. Fortunately, there are nonprofit organizations such as Scholarship America established specifically for this purpose.

You might consider establishing a fund to bring your family together around philanthropy. Consider a Donor Advised Fund, a charitable giving account designed as a less expensive alternative to private foundations. The account is set up with a charity allowing you to recommend grants to other public charities. Most allow you to name a successor, so your children can direct the gifts when you are gone. "Getting children involved in thinking about charity is one of the greatest gifts you can give them," says Beth Milkovits, director of development at The Boston Foundation.

Community foundations are a great place to set up a DAF and get advice.

"One advantage of working with community foundations is the guidance they can give you about where gifts are needed and have the most impact on people in your community. We can do this through programs we offer, or even running a workshop for your family."

Once you've determined how your name will live on, how will you pay for it? While cash or gifts of stock are always good, perhaps you have something of value you aren't using. One person donated his reserved Internet domain name, which the charity sold for $200,000. You may have an insurance policy bought for a need that no longer exists, or a painting in the attic. Bequests of taxable IRAs are very tax efficient.