IRF Update - May 3, 2010

Online Speaker Series Program to Address State Charitable Solicitation Laws

Is your foundation looking for guidance on how to comply with state charitable solicitation laws? Join CASE at 2 p.m. ET on Thursday, May 6, for an Online Speakers Series program that will focus on the application of state charitable solicitation laws to educational institutions and their institutionally related foundations. Charles M. "Chip" Watkins, attorney at Webster, Chamberlain & Bean and author of the CASE White Paper Application of Charitable Solicitation Registration Statutes to Tax-Exempt Educational Institutions and Related Organizations, will provide a state-by-state breakdown of the definitions, forms and other information pertinent to compliance with charitable solicitation laws. Jennifer Smith, assistant vice president and general counsel at the University of Iowa Foundation, will discuss how her foundation has managed the process of complying with complex state initial and ongoing registration requirements. Visit the CASE website to register and learn more about the program.

Session facilitator Tom Mitchell, president of the University of California, Irvine Foundation, asked attendees to offer new strategies and ideas in nine categories, including staff, increasing revenue, reducing expenses, working with the board, communications and advocacy. Attendees left the session with a "top ten list" of ideas to take back to their IRFs.

Mitchell was joined by panelists Laura Brehm of the University of Montana Foundation, Glenn Kaufhold of the Miami Dade College Foundation and Jim Moore of the University of Arizona Foundation. Each offered examples of new strategies implemented in the last two years at their foundations. Moore said that a comprehensive benefits statement can be an important staff retention tool for foundation leaders. In a time of frozen salaries, the statement gives staff a full picture of all the benefits that the foundation offers employees.

A number of attendees also suggested that foundations look to social media to strengthen their communications and visibility. Tiffani Shaw of the University of Iowa Foundation talked about her foundation's creation of "Phil Anthropy," a fictional individual that students, faculty, staff and alumni can "friend" on Facebook. The foundation uses Phil to help their campus community members understand how charitable giving makes a positive contribution to their learning experience.

• Take the survey

The survey deadline is Friday, May 7. If you have questions about issues addressed in the survey, please contact David Bass at DavidB@agb.org. If you have problems accessing or completing the online survey, contact Philip Bakerman at PhilipB@agb.org.

Headlines  

More Scrutiny for Colleges' Business Practices
Inside Higher Ed, May 3, 2010
A Congressional Budget Office (CBO) study (PDF)released April 30 asserts that colleges and universities may inappropriately benefit from federal tax law by issuing tax-exempt bonds. The report, requested by Senate Finance Committee Ranking Member Charles Grassley (R-Iowa), suggests that many colleges and universities engage in "indirect tax arbitrage" - they use debt to finance operating assets while, at the same time, maintain a large portfolio of untaxed investment assets that earn a higher return. While making no recommendations, the report explores ways that lawmakers could expand the definition of illegal arbitrage to reduce the cost of the tax preference to the federal government. In a press statement, Sen. Grassley said the report "raises questions for parents, students, and taxpayers about universities' issuing bonds and going into debt when they have money in the bank," and calls for further examination of the issue.
Full Article
Sen. Grassley's Press Statement
Full CBO Study (PDF)

Pumping Up Alumni Giving at Public Colleges: Studies Find Surprising Trade-Offs
Chronicle of Higher Education, April 29, 2010
Two studies with a specific focus on alumni giving to public colleges and universities had interesting results. A University of Maryland at College Park study, which focused on changes in university selectivity, found that the SAT scores of incoming classes at public institutions did not serve to predict the average amount each student donated to their institution after graduation. A University of Minnesota study focused on public flagship universities and failed to find evidence that (1) some flagships had a "giving tradition" that, in itself, would explain higher alumni giving rates and (2) alumni giving to flagships is significantly affected by state politics. However, the researchers did find that the more Pell Grant recipients a flagship enrolled, the smaller the share of its alumni who donated.
Full Article (subscription required)

College Leaders Debate the Value of Higher Education's Business Model
Chronicle of Higher Education, April 28, 2010
At a forum in Washington, D.C., four college leaders representing different types of higher education institutions debated whether the college and university business model is broken. The two leaders representing public institutions-William E. Kirwan, chancellor for the University System of Maryland, and Gail O. Mellow, president of LaGuardia Community College-argued that the current system must be fixed while the two leaders representing private institutions-Richard C. Levin, president of Yale University, and Daniel M. Hamburger, president and CEO of DeVry Inc. -defended the existing business model. All agreed, however, that public higher education needs more federal and state funds.
Full Article (subscription required)

Max Baucus: A Bank Tax is Coming
POLITICO, April 26, 2010
While Senate Finance Committee Chairman Max Baucus' (D-Mont.) view that Congress will enact a bank tax is the main focus, this article outlines the remaining tax issues that Congress must consider this year and the pressure lawmakers face in finding revenue to pay for their tax priorities. While not specifically mentioned in the article, lawmakers could look to a charitable deduction cap as a revenue raiser.
Full Article

IRS Continues Its Focus on Governance Matters, Official Says
Chronicle of Philanthropy, April 22, 2010
Speaking at a conference in Washington, D.C., IRS Commissioner of Tax Exempt and Government Entities Sarah Hall Ingram said that the agency will continue to promote good governance practices at nonprofit organizations despite complaints by some that the tax code does not give the IRS enforcement authority over governance standards. While the IRS is currently not auditing charities for their governance practices, Ingram said that the agency will "worry more" about organizations that answer "no" to the governance questions on the Form 990.
Full Article

Palin's Controversial CSU Stanislaus Date Takes Trashy Turn
Sacramento Bee, April 14, 2010
The controversy surrounding former Alaska Gov. Sarah Palin's speech at a CSU Stanislaus Foundation fundraiser continues as two students claim they found part of her confidential contract with the foundation in a campus dumpster. The contract did not include how much the foundation is paying Palin for her speech. California Attorney General Jerry Brown announced that an expanded investigation of the foundation will look into how the contract ended up in the trash. State Sen. Leland Yee, a San Francisco Democrat, is sponsoring Senate Bill 330, legislation that would subject foundations and other auxiliary organizations to the California Public Records Act.
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.