IRF Update - August 8, 2012

CASE IRF National Committee Welcomes Four New Members

On July 1, the CASE National Committee for Institutionally Related Foundations appointed four new members to a three-year term on the committee.

The new committee members are:

• Jonathan Enslin, president, University of Wisconsin-Whitewater Foundation
• Lisa Eslinger, senior vice president-finance and operations, Iowa State University Foundation
• Kirk Jewell, president and chief executive officer, Oklahoma State University Foundation
• Donna Vuchinich, president and chief executive officer, University of Hawaii Foundation

Enslin, Eslinger, Jewell and Vuchinich join 14 other foundation executives on the leadership committee. View the full committee roster.

Four individuals rotated off the National Committee:

• Laura Brehm, president and CEO of the University of Montana Foundation
• Tom Hiles, vice chancellor for development and alumni relations at the University of Missouri
• Jim Moore, president and CEO of the University of Arizona Foundation
• Ed Schneider, executive director of the University at Buffalo Foundation

CASE thanks Laura, Tom, Jim and Ed for their service and dedication to the IRF field.

The National Committee for Institutionally Related Foundations provides leadership and guidance on issues of concern to institutionally related foundations and the public colleges and universities they serve. The committee also supports the development of resources, programs and services for professionals within the foundation community.

If you would like to be considered for future service on the IRF national committee, please contact Brian Flahaven, CASE's director of legislative, foundation and recognition programs, at flahaven@case.org or 202-478-5617.

Finance Committee Extenders Bill Includes IRA Charitable Rollover

The Senate Finance Committee has introduced a bipartisan bill that would extend a number of expired and expiring tax provisions, including the IRA charitable rollover, if passed.

Prior to its expiration on Dec. 31, 2011, the IRA Charitable Rollover allowed taxpayers age 70 ½ or older to make tax-free charitable gifts of up to $100,000 per year directly from their Individual Retirement Accounts to eligible charities, including colleges, universities and independent schools. If enacted, the bill would retroactively extend the IRA Charitable Rollover for two years-calendar years 2012 and 2013.

The full Senate will not take up the extenders bill until September at the earliest due to the August recess, which begins next week. It is unclear if the House will agree to the provisions included in the Senate Finance Committee bill.

CASE will continue to urge Congress to pass a retroactive extension of the IRA Charitable Rollover as soon as possible.

Giving to Donor-Advised Funds on the Rise

Contributions to donor-advised funds constituted one of the fastest-growing methods of philanthropic giving in the United States last year, according to a recently released report by the Giving USA Foundation.

The report notes that the three largest donor-advised funds-Fidelity Charitable Gift Fund, Schwab Charitable Gift Fund and Vanguard Charitable Gift Fund-realized an average growth in contributions of 77 percent from 2010 to 2011.

Donor-advised funds are financial accounts set up by donors that are actively managed by a public charity-like a community foundation or a charitable affiliate of a national brokerage. The charity then makes gifts from the fund's assets to beneficiaries-which must be public charities or other nonprofits in good standing with the Internal Revenue Service-as selected by the donor.

Recent reporting in publications like The Nonprofit Quarterly and WealthManagement.com suggests that donors are drawn to donor-advised funds because of tax benefits and because they can be started with a lower minimum balance than most foundations.

In a recent column for University Business, National Philanthropic Trust's Eileen R. Heisman wrote that cultivating donors for donor-advised funds is different from cultivating donors with foundations or who give directly from checkbooks. For example, many donor-advised funds do not accept unsolicited grant applications, and gifts from them are not allowed to be spent on certain items.

"Research indicates that [donor-advised funds] are likely to continue experiencing tremendous growth in the coming years," Heisman notes. "University fundraisers and others are smart to be prepared for the growing impact of [donor-advised funds] on fundraising and charitable giving as a whole."

IRS Releases Guidance on Contributions to Single-Member LLCs

The International Revenue Service has released Notice 2012-52 which provides guidance on the deductibility of contributions to domestic single-member limited liability companies that are wholly owned or controlled by 501(c)3 organizations. The notice states that the IRS will treat contributions to a disregarded single-member LLC as a charitable contribution to a branch or division of the 501(c)3 organization that wholly owns or controls the LLC. In addition, the charity is considered the donee organization for purposes of substantiation and disclosure requirements.

Notice 2012-52 is effective for all charitable contributions made on or after July 31, 2012, although organizations can rely on the notice for taxable years prior to its effective date.

Headlines

Moody's Gives Higher Education a Bleak Outlook
Inside Higher Ed, July 27, 2012
The recently released Moody's Investors Service's U.S. Higher Education Mid-Year Outlook predicts a decline in endowment portfolios in 2012, an increase in federal regulation and more sanctions imposed by accreditation agencies, among other challenges. The agency forecasts that universities will need to operate in a more market-driven approach, which could conflict with the public's expectation of low-cost, high-accessibility education.
Full Article 

One-Third of Colleges Are on Financially 'Unsustainable' Path, Bain Study Finds
The Chronicle of Higher Education, July 23, 2012
Bain & Company and Sterling Partners released an analysis of about 1,700 public and private nonprofit colleges that shows many colleges are on an ‘unsustainable path.' Many higher education leaders believe that the analysis may be flawed and overly pessimistic. The project has been published in an interactive website that allows users to search for a particular college and see where it falls on the analysis.
Full Article

Most Big Companies Expect Flat Giving, Despite 2011 Gains
The Chronicle of Philanthropy, July 22, 2012
A study of charitable giving at 166 large companies showed that more than 70 percent of corporate leaders expect their philanthropy budgets to stay the same this year Many companies are focusing their giving on issues that have a negative impact on them or that appeal to their customer base.
Full Article

Taxes Needn't Discourage Philanthropy
The New York Times, July 28, 2012
Robert J. Shiller, a professor of economics and finance at Yale, says taxes shouldn't discourage philanthropy and argues for continuation of the charitable deduction. He notes that income-tax rates reached a high of 94 percent after World War II for the highest earners, but that these tax rates were accompanied by steadily rising deductions for giving.
Full Article

How can I receive the CASE IRF Update in my inbox?

Contact Brian Flahaven, director of legislative, foundation and recognition programs, at flahaven@case.org.