IRF Update - March 6, 2013

Oregon State, North Dakota State Leaders Receive CASE Commonfund Awards

Leaders of the Oregon State University Foundation and the North Dakota State University Development Foundation are the 2013 recipients of the CASE Commonfund Institutionally Related Foundation Awards.

The awards recognize professionals who have made extraordinary contributions to the advancement, quality and effectiveness of their foundations and the sector. The recipients are:

• J. Michael Goodwin, president and chief executive officer, Oregon State University Foundation. Goodwin has more than 30 years of experience in institutional advancement. He is currently leading Oregon State's first comprehensive campaign. He has served on the CASE Board of Trustees since 2008 and is currently its treasurer.
• James C. Miller, president and chief executive officer of the North Dakota State University Development Foundation. During his 30-year tenure at North Dakota State, Miller has transformed the once-fledging foundation into a model fundraising and alumni relations program. He has served on the CASE Board of Trustees, the CASE Commission on Philanthropy and the National Committee of Institutionally Related Foundations.

The awards are underwritten by Commonfund, which provides fund management services and investment advice to nonprofit organizations. The winners will be recognized April 18 at the 21st annual CASE Conference for Institutionally Related Foundations in Atlanta, Ga.

Early-bird Registration Deadline Approaching for 2013 IRF Conference

There is still time to join college and university foundation leaders April 17–19 in Atlanta at the 21st annual CASE Conference for Institutionally Related Foundations. The early-bird registration deadline is this Friday, March 8.

The theme for this year's conference is "Our Message. Our Mission" as CASE and its foundation members reflect on trends in the field and how to communicate the value of their work to key stakeholders.

The conference is designed primarily for executives at foundations affiliated with four-year institutions and community colleges. Attendees will:

• Hear from a distinguished lineup of speakers, including G. Wayne Clough, secretary, Smithsonian Institution, and former president of the Georgia Institute of Technology; Davia Temin, president and chief executive officer, Temin and Company; Steve Cochrane, managing director, Moody's Analytics; and Lois Lerner, director of exempt organizations, Internal Revenue Service;
• Learn about the latest trends and best practices during elective sessions on a variety of topics, including risk management, real estate opportunities, foundations and alumni associations, investment strategies and state compliance requirements;
• Participate in sessions designed for community college foundations, including building community college alumni relations programs, building foundation board capacity and discussing best practices in partnering with other organizations;
• Earn up to 14.0 CPE credits for selected sessions and
• Enjoy multiple opportunities to network and share strategy with foundation peers.

Registration, travel, hotel and program information are available on the conference page.

Schrum, CASE Urge Lawmakers to Preserve Charitable Deduction at Congressional Hearing

Jake B. Schrum, president of Southwestern University and former CASE board chair, testified on the importance of preserving the charitable deduction during a Feb. 14 U.S. House Ways and Means Hearing on Tax Reform and Charitable Contributions. Schrum delivered his testimony on behalf of CASE and the National Association of Independent Colleges and Universities. View video of President Schrum's testimony.

In his testimony (pdf), Schrum said that a cap or limit on the charitable deduction "targets the most generous high-income donors, individuals and families who want to make large gifts to educational institutions or other charitable organizations." He also reminded committee members that students and others served by educational institutions—not high-income donors—would feel the brunt of a charitable deduction cap.

In addition to Schrum, more than 40 witnesses spoke during the Ways and Means Committee hearing, with the overwhelming majority testifying in favor of preserving the charitable deduction. University of New Hampshire President Mark Huddleston testified on why private philanthropy is critical to public colleges and universities, particularly in an era of declining state and local support. Eugene Tempel, dean of the Indiana University School of Philanthropy, pointed out that increases in tax rates combined with a cap on the charitable deduction would produce a "double whammy" on high-income households, reducing their incentive to give to charitable organizations.

In his opening statement, Ways and Means Committee Chairman Dave Camp (R-Mich.) said that the purpose of the hearing was to allow lawmakers to hear from the charitable community before considering any comprehensive tax reform proposals that could affect charitable organizations. Reps. Dave Reichert (R-Wash.) and John Lewis (D-Ga.) are chairing the committee's tax reform working group on charitable/exempt organizations.

Links to written testimony for all witnesses are available on the Ways and Means Committee website. An archived webcast of the hearing is also available.

A recap of the hearing is available on the CASE website.

Report: College and University Endowment Returns Down Sharply in FY12

Results from a recent survey on U.S. university and college endowments are in line with the Voluntary Support of Education survey findings.

The report by the National Association of College and University Business Officers and Commonfund Institute shows that endowments at colleges and universities in the United States earned an average return of –0.3 percent in the 2011–12 fiscal year, a significant decline from the 19.2 percent average return the previous year. The VSE report indicates that the average endowment did not change in 2012 and that more than half of institutions reported that their endowment values declined.

According to the NACUBO-Commonfund study, fixed income investments generated the highest return (6.8 percent) in fiscal year 2011, while international equities produced the lowest return (–11.8 percent).

Among other highlights:

• The average annual 10-year return for participating institutions was 6.2 percent, an increase from the 5.6 percent average in fiscal year 2011. The three-year average annual return was at 10.2 percent, while the five-year average was 1.1 percent.
• The effective spending rate was 4.2 percent in fiscal year 2012, versus 4.6 percent in fiscal year 2011.
• Institutions with the largest endowments outperformed institutions with smaller endowments in fiscal year 2012.

The NACUBO-Commonfund study reflects data from 831 U.S. colleges and universities. Participating institutions represented more than $406.1 billion in endowment assets.

Headlines

Dire Warnings as Cuts Approach
Inside Higher Ed, March 1, 2013
Automatic, across-the-board spending cuts went into effect on March 1. Higher education officials are worried about the effects the cuts will have on colleges and universities. It is currently unclear how severe the cuts will be, but some institutions expect hiring freezes and layoffs as a result of the cuts. Universities that conduct federally funded research will likely feel the effects of the cuts earlier than others.
Full Article 

Obama May Seek Cap on Charitable Deductions—Again
Chronicle of Philanthropy, Feb. 28, 2013
Charity officials believe President Barack Obama may again propose to cap the charitable deduction, based on comments from two White House officials. Treasury Secretary Jacob Lew said that the administration would like a 28 percent cap on itemized deductions taken by the wealthiest taxpayers, including charitable donations. Another administration official, Jonathan Greenblatt, said a Republican proposal to put a dollar limit on deductions was more worrisome than the 28 percent cap proposed by the president.
Full Article

Gifts to U.S. Colleges Rose 2.3 Percent in 2012, Narrowly Outpacing Inflation
Chronicle of Higher Education, Feb. 20, 2013
A report by the Council for Aid to Education indicates that higher education institutions in America received $31 billion in donations in fiscal year 2012. This amounts to a 2.3 percent increase, or a 0.2 percent increase when adjusted for inflation, from 2011's total donations. Almost 53 percent of the institutions surveyed raised at least as much in 2012 as they did in 2011. Some higher education officials are concerned by the drop in the percentage of alumni who make gifts, as reported in the Voluntary Support of Education survey results.
Full Article

Report Says Stanford Is First University to Raise $1 Billion in a Single Year
New York Times, Feb. 20, 2013
Stanford became the first university to raise more than $1 billion in a single year, according to the Voluntary Support of Education 2012 survey results. Stanford has been the top fundraiser for the past eight years. The University of California, Berkeley, was the leading fundraiser among public universities, raising $405 million. The top 10 universities raised $5.3 billion of the $31 billion total raised by higher education last year.
Full Article 

Charities Get Tough Questions on Tax Breaks—and Can Expect More
Chronicle of Higher Education, Feb. 14, 2013
The House of Representatives Ways and Means Committee held a hearing on the charitable deduction and charity leaders and academic experts appeared as witnesses. The committee's chairman, Rep. Dave Camp (R-Mich.), opened the hearing to anyone who wished to appear. More than 40 people appeared as witnesses. Some lawmakers seemed sympathetic, while others argued that too much of charitable giving goes to things like museums instead of to meeting basic needs.
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.