Mel and Lindalee Koeller, married 47 years with five adult children and recent American Red Cross Legacy Society members, say there is one reason they are able to give now: throughout their lives, they saved and invested for the long term. “Time is your friend,” Mel says about his financial philosophy.
Both Mel and Lindalee have also felt the presence of the American Red Cross throughout their lives (Lindalee having given a talk about Clara Barton when she was in the fourth grade!). Every time they’ve heard of a disaster, they noted “immediately, even before the reporters parachute in to cover the news, the Red Cross is already there, making arrangements for people who have everything wiped out, with no warning.”
“When deciding where to help, among thousands of charities needing support,” Lindalee said, “It is the expediency of the Red Cross that influenced us.”
From the beginning of his career as a supervisor in electrical engineering, Mel began to save for the future, putting pre-tax money into an IRA. And even before the details of this gift came together, the Koeller’s were aware of an opportunity for philanthropy that many Americans can take advantage of—but perhaps too few recognize.
The new charitable gift annuity that Mel and Lindalee made to the Red Cross this year is a perfect example of a well-thought-out gift plan that produces an extraordinary impact on our mission and the ideal financial Mel and Lindalee Koeller, married 47 years with five adult children and recent American Red Cross Legacy Society members, say there is one reason they are able to give now: throughout their lives, they saved and invested for the long term. “Time is your friend,” Mel says about his financial philosophy.
Both Mel and Lindalee have also felt the presence of the American Red Cross throughout their lives (Lindalee having given a talk about Clara Barton when she was in the fourth grade!). Every time they’ve heard of a disaster, they noted “immediately, even before the reporters parachute in to cover the news, the Red Cross is already there, making arrangements for people who have everything wiped out, with no warning.”
“When deciding where to help, among thousands of charities needing support,” Lindalee said, “It is the expediency of the Red Cross that influenced us.”
From the beginning of his career as a supervisor in electrical engineering, Mel began to save for the future, putting pre-tax money into an IRA. And even before the details of this gift came together, the Koeller’s were aware of an opportunity for philanthropy that many Americans can take advantage of—but perhaps too few recognize.
The new charitable gift annuity that Mel and Lindalee made to the Red Cross this year is a perfect example of a well-thought-out gift plan that produces an extraordinary impact on our mission and the ideal financial return to these donors. The Koellers now receive annual payments of 6.7% on their gift, guaranteed for both their lives.
What’s more, their return is based on an asset that they were not currently using and would not have been able to withdraw without paying income tax whenever it was withdrawn–even if they left it to their heirs.
Retirement accounts, when not needed for current use, are often the best source from which individuals over age 70.5 can consider making their charitable gifts. This is because, even though federal estate tax may no longer be a concern for many, the funds in a tax-deferred IRA are still subject to income tax when withdrawn or inherited by individuals.
That is, except if IRA funds are distributed directly to a qualified charity–an exception made permanent since 2016. The Qualified Charitable Distribution (QCD) is tax free up to $100,000 annually. And in 2022, the SECURE 2.0 Act made it possible to distribute $50,000 per individual (totaling $100,000 for a married couple if each individual has their own traditional IRA) to charity in exchange for a Charitable Gift Annuity, one time only. This is how the Koeller’s turned tax-deferred IRA assets into tax-advantaged cash flow with their gift to the American Red Cross.
Often the very best gifts can solve a donor’s problem or meet a specific goal in addition to making tangible a much larger philanthropic commitment than was thought possible to support the values important in their lives. In this way, Mel and Lindalee Koeller's gift is a rewarding one for them and for the Red Cross.
If you would like information about how you can support our mission and help those in need by creating your own legacy like Mel and Lindalee have done, please contact our Gift Planning Office at, 1-800-797-8022, ext. 5, giftplanning@redcross.org.