IRF Update - Feb. 25, 2011

Early-Bird Registration Deadline Today for 2011 IRF Conference

Have you registered for the 19th annual CASE Conference for Institutionally Related Foundations, April 12-15, 2011, in Phoenix, Ariz.? If not, register by Friday, Feb. 25, and save $40.

"Managing Expectations" is designed for executives at foundations affiliated with two-year and four-year public colleges and universities. Attendees will:

• Hear from a great lineup of speakers, including Robert Glidden, president emeritus of Ohio University, Stacy Palmer, editor of the Chronicle of Philanthropy and Gerald Swanson, professor of economics at the University of Arizona
• Learn about the latest trends and best practices during elective sessions on a variety of topics, including managing campaigns, organizational metrics, funding your foundation, spending policy, lobbying and strategic planning
• Participate in sessions designed specifically for community college foundations on alumni relations, internal controls, communications and governance
• Enjoy multiple opportunities to network and share strategy with foundation peers

To get the most out of the conference, foundation leaders should bring their senior management team. Foundations with three or more staff members attending the conference will receive a special team discount.

Registration, travel, hotel and program information are available on the CASE website.

SEC Proposed Rules on Municipal Advisors Could Affect IRF Trustees, Employees

New proposed rules for municipal advisors, released by the Securities and Exchange Commission, could require some public college and university foundation trustees and employees to register with the agency as municipal advisors.

The proposed rules (pdf) implement new registration requirements for municipal advisors called for in the Dodd-Frank Wall Street Reform and Consumer Protection Act passed last year. In the proposed rules, a municipal advisor is defined as "a person [who is not a municipal entity or an employee of a municipal entity] (i) that provides advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, including advice with respect to the structure, timing, terms and or other similar matters concerning such financial products or issues, or (ii) that undertakes a solicitation of a municipal entity." Under the proposed rules, trustees and employees of institutionally related foundations would be considered municipal advisors and would have to comply with new burdensome registration requirements. The proposed requirements would also impact private college and university trustees and employees.

In joint comments submitted to the SEC, CASE and other higher education association colleagues argue that Congress did not intend to apply the new registration requirements to financial advice given by IRF trustees and employees. The higher ed community also voiced concern that requiring trustees and employees to register as municipal employees would discourage individuals from seeking these important roles.

CASE will notify members when the final SEC rules are released.

President's FY2012 Budget Plan Includes Charitable Deduction Cap

President Barack Obama's fiscal year 2012 budget plan (pdf) once again includes a proposal to cap the value of charitable deductions for high-income taxpayers.

Currently, taxpayers earning more than $200,000 annually ($250,000 for married couples) can take itemized deductions, including the charitable deduction, at a rate equal to their tax bracket (33 percent or 35 percent). The president's proposal would cap the value of itemized deductions for these taxpayers at 28 percent.

Revenue generated from the cap, which would also affect the mortgage interest and state and local tax deduction, would be used to cover the costs of preventing the Alternative Minimum Tax from middle-class Americans for three years. The budget plan also includes an extension of the IRA charitable rollover through Dec. 31, 2012.

President Obama's budget plan does not include the National Commission on Fiscal Responsibility and Reform's proposal to replace the current charitable deduction with a 12 percent non-refundable tax credit available to all taxpayers.

CASE will continue to urge Congress to protect the value of the charitable deduction. Background information and the latest developments can be found on the CASE website.

VSE Report: U.S. Donors Show Steady Commitment to Education

While giving to colleges and universities during the 2009-10 fiscal year didn't increase as much as anticipated, donors continued to "demonstrate their commitment to higher education with $28 billion in private support during the slow climb out of the recession," says CASE President John Lippincott in response to the Voluntary Support of Education survey results.

Released earlier this month, the Council for Aid to Education's annual VSE survey results indicate that private giving to higher education increased by 0.5 percent in 2009-10 following the dramatic decline of 11.9 percent the previous year. According to Lippincott, this suggests that it may take two or three years, or longer depending upon the pace of the economic recovery, to reach or exceed the high point of $31.6 billion in philanthropic support in 2007-08.

VSE researchers attribute the modest increase to corporate and foundation support, which grew by 2.4 percent and 2 percent, respectively. In contrast, alumni giving, which has been declining for a number of years, decreased by 0.4 percent.

Lippincott says the continued decline in the amount of alumni giving is an area of "ongoing concern."

"Part of this decline may be attributable to alumni making their gifts through donor-advised funds and family foundations," he says. "Nonetheless, colleges and universities need to pay special attention to engaging their alumni and to helping them understand the importance of their gifts, no matter the size."

Other trends noted in the VSE report:

• Nearly 52 percent of all responding institutions reported increases in giving compared to about 33 percent the previous year.
• As a group, private baccalaureate colleges reported the largest increase in giving in 2010 (2.9 percent) after experiencing one of the largest declines (18.3 percent) the year before.
• Alumni participation decreased from 10 percent in 2009 to 9.8 percent in 2010.

The annual VSE report is sponsored by CASE.

Headlines

Donor Intent vs. Current Realities
Inside Higher Ed, Feb. 22, 2011
The Louisiana Supreme Court declined to take up a suit by supporters of Newcomb College to undo its merger with Tulane University's arts and sciences college. Supporters of the college accused Tulane of violating the donor intent of Josephine Newcomb, who gave $100,000 to the university in 1881 to establish a women's college. Tulane successfully argued that it had a right to alter its educational programs and offerings given changes in society and higher education since the time the original gift was given to the institution.
Full Article 

Senior Administrators' Pay up to 1.4%
Inside Higher Ed, Feb. 21, 2011
While the median base salary increase for senior administrators at colleges and universities was 1.4 percent in 2010, senior administrators at public colleges and universities saw no increase at all, according to data released by the College and University Professional Association for Human Resources. Community colleges was the only public institution sector that showed an increase in median base salary for senior administrators (0.4 percent).  
Full Article

House Votes to Cut Higher-Education Spending, Delay ‘Gainful Employment' Rule
Chronicle of Higher Education, Feb. 18, 2011
A spending bill that would fund the federal government through the remainder of fiscal year 2011, passed by the Republican-controlled U.S. House of Representatives, cuts funding for Pell Grants, eliminate a number of education programs and significantly reduces funding for the National Institutes of Health and the National Science Foundation. The bill heads to the U.S. Senate where it will likely face opposition from the Democratic majority. The House bill also would bar the Department of Education from using federal money to enforce new "gainful employment" rules that will require for-profit colleges to report more information on student outcomes. 
Full Article (subscription required)

Alumni Outreach Can Pay Off for Colleges
Community College Times, Feb. 15, 2011
Facing financial challenges, many community colleges are looking to connect with their alumni. Outreach strategies include increased use of social media to communicate with alumni, inviting alumni to speak to current students and revamping rules to allow more individuals with an affinity to the college to join alumni associations. Colleges are also trying to collect more data about alumni so they are better positioned to seek private support from former students.
Full Article 

Taxes Boost State Coffers
Wall Street Journal, Feb. 1, 2011
State tax collections increased 6.9 percent in the fourth quarter of 2010, according to a report released by the Nelson A. Rockefeller Institute of Government at the State University of New York. The growth in tax revenue is due to improving corporate profits, employment gains and a rising stock market. Even with this increase, state revenues have not grown fast enough to recover from the recession. Thus, states will still be making big cuts this year to balance their budgets. 
Full Article

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