Foreign Gift Reporting
U.S. colleges and universities that receive charitable gifts from a foreign source, the value of which is $250,000 or more within a calendar year, must file a disclosure report with the Secretary of the U.S. Department of Education twice a year. Additional disclosures are required for restricted or conditional gifts/contracts and for institutions that are owned or controlled by a foreign entity.
The reports are due on January 31 and July 31, whichever is sooner. The reporting requirements fall under the Section 117 of the Higher Education Act. This federal foreign gift reporting requirement was enacted more than thirty years ago. However, the Department of Education has never issued formal guidance for the requirement, leaving institutions to interpret the law on their own.
The Department of Education has an online reporting system through which institutions must submit their Section 117 information. That information is posted for the public on the Department's website.
How to Report
Institutions must submit their foreign gift reports using the online reporting system, available at https://partners.ed.gov/ForeignGifts. See the Department’s fact sheet, specifically under Appendix A, to understand what information must be reported. Advancement staff should coordinate with their president/chancellor's, financial aid and/or chief financial officer's office when submitting the form.
Below is Section 117 of the Higher Education Act, which outlines the disclosure requirement and the information that institutions must include in their disclosure reports, along with additional resources. Background information and additional resources related to Section 117 can be found on the Department’s website.
Legislative and Regulatory Issues on Foreign Gift Reporting
In recent years, colleges and universities have faced increased scrutiny over foreign gifts because of national security concerns at the Department and in Congress as policymakers have grown more hawkish about foreign influence. Republicans of the House Education and Workforce Committee sent a letter to the Department of Education in April 2023 requesting information on if universities were complying with Section 117 and what steps the Biden Administration is taking to enforce it.
In May 2023, the Department of Education announced it is seeking public comments on the reporting requirements in Section 117 as the Department considers changes to the disclosures. The Department is soliciting information on whether the disclosures are necessary for the proper functioning of the Department and the compliance burden the disclosures pose on institutions, among other topics.
The Department is expected to make limited changes to the requirements and shift the primary responsibility for administering Section 117 from the Office of the General Counsel to Federal Student Aid. Despite encouragement from those in higher education, the Department declined to undertake a formal rulemaking process for Section 117, which would offer stakeholders a better opportunity to engage with the process and greater clarity for impacted institutions.
Higher education associations and institutions have sought further clarification of the rules for which formal regulations have never been issued. Guidance is needed with regard to:
- gift reporting,
- definition of a gift,
- gifts to Institutionally Related Foundations and other affiliated entities,
- restricted/conditional gift disclosure, and
- filing missed or amended reports.
Without further clarification from the Department of Education, it is difficult, if not impossible, for colleges and universities to comply fully with the requirements of Section 117.
In 2021, Senators Marco Rubio (R-FL) and Kevin Cramer (R-ND) introduced Greater Insight into Foreign Transactions (GIFTS) in Higher Education Act (S. 2593), which would lower the threshold that requires U.S. colleges and universities to disclose foreign gifts or contracts from $250,000 to $50,000 for countries designated as foreign adversaries. The legislation would extend disclosure requirement to faculty and staff and instruct federal agencies to not send any federal funds to colleges or universities if they violate the disclosure requirements. As of May 2023, the bill had yet to be reintroduced in the 118th Congress.
Legislation to lower the reporting threshold and extend the disclosure requirements to faculty was also included in early versions of both chamber’s China competitiveness bills last Congress that ultimately became the CHIPS Act. Opponents of the change, which did not make it into the final package, argued lowering the reporting threshold to $100,000 (House version) or $50,000 (Senate version) would dramatically increase the compliance burden on colleges and universities and overwhelm the Section 117 reporting system. Policymakers are discussing assembling another China competitiveness bill in the 118th Congress where we could again see some members push for lowering the reporting threshold.
- U.S. Department of Education Information Collection Request on Section 117, May 2023
- Few Changes Planned to Foreign Gift Reporting Requirements, Inside Higher Ed, May 2023
- House Education and Workforce Committee Letter Seeking Information on Compliance with Section 117, April 2023
- Public Comments Provided for the U.S. Department of Education’s December 2022 Information Collection Request on Section 117
- U.S. Department of Education Reporting Reminder, January 2023
- Colleges twist in the wind with foreign gift requirements in limbo, Higher Ed Dive, April 2022
- American Council on Education Letter on Section 117 Reforms in China Competitiveness Legislation, March 2022
- Greater Insight into Foreign Transactions (GIFTS) in Higher Education Act in 2021 (S. 2593), August 2021
- U.S. Department of Education Fact Sheet on Reporting Foreign Gifts and Contracts, June 2020
- CASE Comments to U.S. Department of Education on Revised Information Collection Request on Foreign Gift Reporting, March 2020
- CASE Letter to the U.S. Department of Education, August 2019
- CASE Subject Guide: International Fundraising
Section 117 of the Higher Education Act - Disclosure of Foreign Gifts
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