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When the last industrialist William Dietrich donated $470.6 million to 15 colleges and charities, including compact disc-setting gifts to Carnegie Mellon University and the University of Pittsburgh, his beneficence last year drew widespread publicity and praise.
CMU, which received $265 million, named its College of Humanities for Dietrich's jocular mater. Pitt, bequeathed $125 million, named its School of Arts and Sciences for Dietrich's forebear.
But it could be years before Dietrich's beneficiaries can spend gobs of his cash.
Dietrich, 73, who died on Oct. 11, wanted it that way.
Rather than completely award money, Dietrich employed an obscure section of the U.S. tax cypher -- Section 509(a)(1) -- to structure a foundation that will annually dribble out 3 percent of the industrialist's donations. That's 2 proportion points less than the 5 percent distribution the Internal Revenue Service demands of most foundations.
Even then, Dietrich's beneficiaries will not be expert to touch the bulk of the distributions for years. Dietrich ordered payments to course into each recipient's endowment -- and those funds have their own annual distribution caps. For universities, the cap is about 5 percent a year, experts say.
Source: Blairsville Dispatch