David Kem and Judith Raines
David Kem ’67 and his wife, Judith Raines, share a fundamental belief that it is important to help young people succeed, and their giving reflects that. They support students at Montana State University and also at Judith’s alma mater, the University of St. Thomas in Houston.
“We like to encourage [students] to pursue their education. Education is a critical factor in helping them provide better lives for themselves and their families,” David says.
One of the ways that David and Judith have chosen to give is by contributing annually via David’s IRA required minimum distribution. David says using his IRA was an easy process and was tax efficient.
“It is very basic. If you have decided to give anyway, it is a very comfortable way to do it,” David says.
The IRA qualified charitable distribution (QCD) is a distribution from an IRA made directly to an eligible charity, like the Montana State University Alumni Foundation. Owners of individual retirement accounts who are at least age 70½ can contribute some or all of their IRAs to charity. The IRA QCD is an easy way to give that can also provide tax savings.
A native of Columbus, MT, David earned his B.S. in Civil Engineering in 1967. As a student, David was a member of Sigma Chi fraternity and active in intramural sports and other campus activities. To help finance his education, he held a number of different jobs as a student at MSU, including manning the switchboards in various Resident Halls, serving as a Resident Advisor and “slinging hamburgers.”
Both David and Judith had phenomenal careers. They both worked at Conoco Inc., with David starting out as an engineer and going on to become head of Conoco’s European Refining/Marketing organization, including expansions into Central and Eastern Europe including the Turkish region. He served on the board of directors for the American Chamber of Commerce in London and for EUROPIA, an association dealing with industry issues in Europe. Among other positions, Judith led Conoco’s Leadership Development Program in Europe.
David went on to receive an honorary doctorate from Montana State University and became one of 100 distinguished graduates inducted into MSU’s Society of Centennial Alumni.
David and Judith choose to support programs and scholarships that are focused on students, and they appreciate learning the stories of the individual students who benefit from those programs and scholarships.
“It is always a pleasure to be around young people—the energy they have and how hard they work is inspiring. We have really enjoyed hearing their stories and following their success. It is very encouraging,” David says.
David and Judith have also put the Montana State University Alumni Foundation in their will. Legacy giving is a special way for them to give back to the people and institutions that gave them the opportunity to do what they have been able to do in their lives and careers.
“We value education. And, it takes a lot of resources to educate children,” David explains.
Is an IRA QCD Gift Right for You?
While you do not receive a charitable tax deduction for an IRA qualified charitable distribution (QCD), it is not subject to income taxes. This may be appealing if:
- You have already contributed as much as you currently can deduct (as limited by your adjusted gross income). The charitable distribution allows you to maximize your charitable contribution while minimizing your adjusted gross income.
- If you don’t itemize deductions and are not yet required to take your required minimum distribution (RMD), a QCD offers all of the benefits of an itemized income tax charitable deduction.
- If you are age 72 or older and must take your RMD, a QCD can satisfy your RMD without increasing your income taxes.
Why take advantage of this opportunity if you can’t deduct your gift?
Many IRA donors view this opportunity as a way to manage their income. Making a qualified charitable distribution from an IRA may reduce your provisional income, which may in turn reduce the tax you pay on Social Security benefits. There are other potential tax and financial benefits from reducing your income including lower Medicare premiums to reducing the likelihood of being subject to the 3.8% tax on net investment income (learn more).
Each individual’s situation is different—please consult your financial advisor to discuss the best way for you to make your gifts.
Contact Kevin Brown at 406-994-4815 or email@example.com with any questions about qualified charitable distributions. Additional information may be found on the Office of Estate, Trust and Gift Planning website plannedgiving.msuaf.org.