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    Foreign Gift Reporting

    CASE Comments to U.S. Dept of Education December 2020 CASE Comments to U.S. Dept of Education March 2020 CASE Comments to U.S. Dept of Education December 2019 CASE Comments to U.S. Dept of Education November 2019
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    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 who 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 or regulations for the requirement, leaving institutions to interpret the law on their own.

    On June 22, 2020, the Department of Education announced the implementation of a new online reporting system through which institutions must submit their Section 117 information.  

    How to Report

    Institutions must submit their foreign gift reports using the new 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.  

    Institutions should no longer report foreign gifts or contracts on the E-App in question 71. If your institution submitted an E-App prior to June 22, 2020, those gifts or contracts already reported do not need to be re-submitted using the new system. 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. 

    For more information, visit the Department’s announcement of the new reporting portal.  

    Legislative and Regulatory Issues on Foreign Gift Reporting

    The Department of Education is investigating college and university compliance with reporting requirements on foreign gifts and contracts. The increased scrutiny is a result of national security concerns at the Department and in Congress. 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.

    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.

    On Capitol Hill, Senators Rob Portman (R-OH), Marco Rubio (R-FL), and Tom Cotton (R-AR) reintroduced the Foreign Influence Transparency Act, which would lower the threshold that requires U.S. colleges and universities to disclose foreign gifts or contracts from $250,000 to $50,000.  

    In June 2020, Senator Portman also introduced the Safeguarding American Innovation Act, which would lower the reporting threshold for U.S. colleges and universities receiving foreign gifts from $250,000 to $50,000, and give the Education Department authority to fine institutions that fail to properly report these gifts. The legislation is focused on safeguarding American research developed at U.S. colleges and universities from foreign governments, specifically China.  

    To stay updated on the latest legislative and regulatory updates, continue to check back here and join the CASE Advocacy Network. 

    Resources
    • 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

    • U.S. Department of Education Notice on Withdrawal of Revised Emergency Information Collection Request (ICR), February 2020

    • CASE Comments to U.S. Department of Education on Revised Information Collection Request on Foreign Gift Reporting, December 2019

    • CASE Comments to U.S. Department of Education on Proposed Information Collection Request on Foreign Gift Reporting, November 2019

    • U.S. Department of Education Notice for Comments on Foreign Gifts Reporting, September 2019

    • Background and Summary of Issues of Concern, American Council on Education, September 2019

    • CASE Letter to the U.S. Department of Education, August 2019

    • American Council on Education Letter to U.S. Department of Education, July 2019

    • Foreign Gifts Under Scrutiny, Insider Higher Ed, July 2019

    • Subject Guide: International Fundraising

    • Foreign Gift and Contract Report, U.S. Department of Education

    • Reporting of Foreign Gifts, Contracts, and Relationships by Institutions, U.S. Department of Education, October 2004

    Section 117 of the Higher Education Act - Disclosure of Foreign Gifts

    Whenever any institution is owned or controlled by a foreign source or receives a gift from or enters into a contract with a foreign source, the value of which is $250,000 or more, considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year, the institution shall file a disclosure report with the Secretary on January 31 or July 31, whichever is sooner.

    Each report to the Secretary required by this section shall contain the following:

    1. For gifts received from or contracts entered into with a foreign source other than a foreign government, the aggregate dollar amount of such gifts and contacts attributable to a particular country. The country to which a gift is attributable si the country of citizenship, or if unknown, the principal residence for a foreign source who is a natural person, and the country of incorporation, or if unknown, the principal place of business, for a foreign source which is a legal entity.
    2. For gifts received from or contracts entered into with a foreign government, the aggregate amount of such gifts and contracts received from each foreign government.
    3. In the case of an institution which is owned or controlled by a foreign source, the identity of the foreign source, the date on which the foreign source assumed ownership or control, and any changes in program or structure resulting from the change in ownership or control.

    Notwithstanding the provisions of subsection (b), whenever any institution receives a restricted or conditional gift or contract from a foreign source, the institution shall disclose the following:

    1. For such gifts received from or contracts entered into with a foreign source other than a foreign government, the amount, the date, and a description of such conditions or restrictions. The report shall also disclose the country of citizenship, or if unknown, the principal residence for a foreign source which is a natural person, and the country of incorporation, or if unknown, the principal place of business for a foreign source which is a legal entity.
    2. For gifts received from or contracts entered into with a foreign government, the amount, the date, a description of such conditions or restrictions, and the name of the foreign government.
    1. State Requirements

    If an institution described under subsection (a) is within a State which has enacted requirements for public disclosure of gifts from or contracts with a foreign source that are substantially similar to the requirements of this section, a copy of the disclosure report filed with the State may be filed with the Secretary in lieu of a report required under subsection (a). The State in which the institution is located shall provide to the Secretary such assurances as the Secretary may require to establish that the institution has met the requirements for public disclosure under State law if the State report is filed.

    2. Use of Other Federal Reports

    If an institution receives a gift from, or enters into a contract with, a foreign source, where any other department, agency, or bureau of the executive branch requires a report containing requirements substantially similar to those required under this section, a copy of the report may be filed with the Secretary in lieu of a report required under subsection (a).

    All disclosure reports required by this section shall be public records open to inspection and copying during business hours.

    1. Court Orders

    Whenever it appears that an institution has failed to comply with the requirements of this section, including any rule or regulation promulgated under this section, a civil action may be brought by the Attorney General, at the request of the Secretary, in an appropriate district court of the United States, or the appropriate United States court of any territory or other place subject to the jurisdiction of the United States, to request such court to compel compliance with the requirements of this section

    2. Costs

    For knowing or willful failure to comply with the requirements of this section, including any rule or regulation promulgated thereunder, an institution shall pay to the Treasury of the United States the full costs to the United States of obtaining compliance, including all associated costs of investigation and enforcement.

    The Secretary may promulgate regulations to carry out this section.

    For the purpose of this section -

    1. the term "contract" means any agreement for the acquisition by purchase, lease, or barter of property or services by the foreign source, for the direct benefit or use of either of the parties;

    2. the term "foreign source" means-
         (A) a foreign government, including an agency of a foreign government;
         (B) a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states;
         (C) an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof; and
         (D) an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source;

    3. the term "gift" means any gift of money or property;

    4. the term "institution" means any institution, public or private, or, if a multicampus institution, any single campus of such institution, in any State, that-
         (A) is legally authorized within such State to provide a program of education beyond secondary school;
         (B) provides a program for which the institution awards a bachelor's degree (or provides not less than a 2-year program which is acceptable for full credit toward such a degree) or more advanced degrees; and
         (C) is accredited by a nationally recognized accrediting agency or association and to which institution Federal financial assistance is extended (directly or indirectly through another entity or  person), or which institution receives support from the extension of Federal financial assistance to  any of the institution's subunits; and

    5. the term "restricted or conditional gift or contract" means any endowment, gift, grant, contract,  award, present, or property of any kind which includes provisions regarding-
         (A) the employment, assignment, or termination of faculty;
         (B) the establishment of departments, centers, research or lecture programs, or new faculty  positions;
         (C) the selection or admission of students; or
         (D) the award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion.

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