Needless to say, it's good to be Sidney Frank '42. He has been named the ninth-most generous American of 2004 by the Chronicle of Philanthropy, as well as the 413th richest person in the world by Forbes Magazine, with an estimated fortune of $1.6 billion.
"He deserves the designation, clearly. He's a very generous man," said Ronald Vanden Dorpel GS '71, senior vice president for university advancement.
Frank gave away $142 million of his fortune last year, the Chronicle reported in its annual list of America's Most-Generous Donors. $100 million of that was given to Brown to eliminate loans for low-income students. He has pledged another $42 million to various causes: $20 million to the University to fund the construction of Sidney E. Frank Hall; $12 million to his high school, the Norwich Free Academy in Connecticut; and $10 million to the White Plains Hospital Center in White Plains, N.Y.
According to Vanden Dorpel, Frank's $20 million gift to the University has been pledged over five years, and the first payment was received at the end of last year.
Vanden Dorpel also denied a report published by Forbes last October asserting that Frank will earn a $17 million annuity payment from his $100 million donation to Brown. "I have no idea where that story came from," he said.
Frank earned $2 billion last year from the sale of his Grey Goose brand of vodka to Bacardi, Inc. and Forbes wrote last year that charitable donations are "a win-win for Frank," thanks to tax deductions.
Vanden Dorpel said he could not comment on individual financial matters.
But Matthew Brennan, a certified public accountant at Providence accounting firm Yarlas Kaplan Santilli and Moran with a Master's in Taxation, agreed that giving was probably a good move on Frank's part. Brennan said he is not familiar with the specifics of Frank's charitable donations.
If Frank made his $2 billion by selling stock, Brennan said, then he pays capital gains tax on his profit to the federal government at a rate of 15 percent. If he earned it by selling assets, then some of it will count as income and some as capital gains. But the ordinary deductions he earns through charitable donations apply towards his regular income, which is taxed at 35 percent if he is in the top federal bracket.
"You're paying tax at a rate of 15 percent and getting a deduction at a rate of 35 percent," Brennan said. "So basically he gets a benefit of 20 percent."
"It's a smart move," he said.
According to media reports, Frank currently is expanding into publishing, premium tequilas and an energy drink partnership with rapper Lil' Jon called "CRUNK!!!"
