Friday, September 28, 2012

Congressional Research Service: What Qualifies as "Educational"?

Images (2)The Congressional Research Service recently issued a report on 501(c)(3) Organizations: What Qualifies as "Educational"?  From the report's Summary section:

The question here is how far can the term “educational” be extended? Can a group espousing a viewpoint (i.e., only one side of an issue) be characterized as educational? If so, does the group have to provide factual information to support its statements? Is there some standard for truthfulness and accuracy? 

The answers are rooted in a Treasury regulation, which provides that an organization that advocates a position or viewpoint can qualify as educational if it presents “a sufficiently full and fair exposition of the pertinent facts” so that people can form their own opinions or conclusions. To supplement the regulation’s “full and fair exposition” standard, the Internal Revenue Service (IRS) has developed the “methodology test.” Under it, a method is not “educational” if it fails to provide a “factual foundation” for the position or viewpoint or “a development from the relevant facts that would materially aid a listener or reader in a learning process.” 

There are constitutional implications in how the term “educational” is defined. In particular, the denial of tax-exempt status on the basis of an organization’s speech could raise issues under the First Amendment. While there is no constitutional requirement that the term “educational” encompass every communication protected by the First Amendment, courts will examine the IRS’s denial of a tax exemption or other benefit when it is based on the content of the taxpayer’s speech in order to ensure the denial was not done for an impermissible reason. Groups that promote controversial positions may be particularly vulnerable to an interpretation of “educational” that permits a subjective determination by the IRS as to whether a group’s methods of presenting its views are educational.  

Concern over these issues has led to questions about whether the “educational” standard is unconstitutionally vague. While the IRS’s methodology test was held to be unconstitutionally vague by a federal appellate court, subsequent court decisions have suggested that the test passes constitutional muster

LHM

September 28, 2012 in Federal – Legislative, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, September 11, 2012

World Universities Rankings: Rising Global Student Mobility

The International Herald Tribune (IHT) is reporting that the compilers of a leading league table of the world's top universities on Tuesday reported an “unstoppable rise” in the numbers of students choosing to travel abroad to study.

“Global student mobility is on a seemingly unstoppable rise, with those seeking an overseas education targeting the leading universities,” wrote John O'Leary, an academic adviser to the London-based Quacquarelli Symonds, which produces the annual QS World Universities Rankings.  O'Leary continued: “Even after considerable growth in recent years, the latest rankings show an extraordinary rise of almost 10 percent in international student numbers at the top 100 universities.”

According to the IHT,

This year’s listings saw Massachusetts Institute of Technology (MIT) overtaking Britain’s Cambridge University as the top place in the influential league table, which is based on a range of factors that include the opinions of academics and prospective employers.

American and British institutions continued to dominate the QS rankings, which were launched in 2004, occupying all 10 top places.

QS factors foreign student and faculty numbers into the rankings.  This practice is reflected in this year’s listing.  According to O'Leary, “Cambridge, for example, has seen a significant increase in international students, but has dropped five places in this measure, contributing to its fall from first to second place in the overall ranking.”

Similarly, a drop in the ranking of the University of California at Berkeley — down to 22nd place from 2nd in 2004 — reflected not only a comparatively poor faculty-to-student ratio, but also “low attractiveness for international faculty and students,” said QS adviser, Martin Ince.

The IHT continues:

QS noted that the most successful universities competed to attract the world’s best students and faculty. “Simple evaluations of the proportion of international students and international faculty serve as indicators of an institution’s diversity and international attractiveness,” it said.

Traveling abroad to study has obvious attractions for students who want the very best education available globally. There is also an economic incentive for the institutions themselves, and the countries that host them, in terms of fees and foreign earnings.

However, the IHT notes, mobility depends on the readiness of governments to allow access to foreign students.

VEJ

September 11, 2012 in Current Affairs, In the News, International, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, August 2, 2012

New Hampshire Releases Report on Nonprofit Hospitals' Executive Compensation

New Hampshire Attorney General, Michael A. Delaney, announced today that the New Hampshire Center for Public Policy Studies (NHCPPS) has issued its report on executive compensation at New Hampshire's nonprofit hospitals. The Attorney General commissioned the NHCPPS to conduct the study in 2011. The review was to determine whether the trustees of New Hampshire's nonprofit hospitals are meeting their fiduciary responsibilities in setting executive compensation, and to examine the types and variations in executive compensation among the hospitals.

According to a press release from the New Hampshire Department of Justice

The report finds that most hospitals follow the process established by the Internal Revenue Service (IRS) for determining executive salaries. However, these hospitals do not necessarily follow the same process in determining other forms of executive compensation including hiring and retention agreements, bonuses, and perquisites. These additional forms of compensation can, in some circumstances, constitute a significant portion of an executive's pay package. The Report also finds that for most hospitals there is a correlation between hospital size and levels of compensation paid to the chief executive officer (CEO). The data does not however show a significant correlation between CEO compensation and hospital performance measures such as quality of care, cost of care, or charitable care provided. Given these hospitals exist to provide quality health care and are required to provide community benefit and charitable care in light of their non-profit status, the lack of such a correlation is a significant concern.

The Report found that in using IRS guidelines to set compensation, there is a potential "log-rolling" effect created. As long as other hospitals are "moving the log forward" with similar levels of compensation, the industry remains in compliance with the IRS guidelines. Hospitals are supposed to use a range of salaries when setting their CEO compensation. In actual practice hospitals tend to target the 75 percentile, and often higher, in setting their CEO's compensation. This creates an upward spiral and executive compensation can grow at a rate disproportionate to relevant measures of achievement, or to increases experienced by other sectors of the population. This appears to have been the case even during the significant economic downturn experienced since 2008.

All of New Hampshire's 23 nonprofit hospitals were included in the review.

VEJ

August 2, 2012 in Current Affairs, In the News, State – Executive, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Friday, June 1, 2012

Oregon Nonprofit Sector Report

 The Institute for Nonprofit Mangement at Portland State University and the Nonprofit Association of Oregon have published a detailed report on the nonprofit sector in Oregon.  Here is a description of the report from the Institute's website:

The Oregon Nonprofit Sector Report (ONSR) is a comprehensive report that examines the sector as a whole—including a description of its size and scope, the current condition of nonprofits and clues about their economic and social relevance, and social impact of the nonprofit sector in Oregon.

The report aims to inform decision makers in the public, nonprofit, and private sectors, and will be an important tool for raising public awareness about the overall importance and contributions of Oregon’s nonprofits to the state.

LHM

 

 

June 1, 2012 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Friday, January 27, 2012

Multiple Perspectives on Nonprofits and Advocacy

Nonprofits engaging in public policy advocacy has often been a controversial topic, and a recent mix of reports and articles indicate that there are still widely divergent perspectives on the wisdom, benefits, and costs of such advocacy.  Here are some notable examples:

  • ARNOVA's Finances of Nonprofits and Public Policy:  Focused on the financial challenges now facing nonprofits and related emerging public policy issues, this report is from a June 2011 symposium and describes "the challenges now facing nonprofits in the realm of public policy, especially as they pertain to the financing of nonprofits presently and in the future. The report outlines an agenda for research needed to develop a better understanding of these challenges and issues."
  • NCRP Report on Foundation Funding of Advocacy:  Titled "Leveraging Limited Dollars: How Grantmakers Achieve Tangible Benefits by Funding Policy and Community Engagement," this report asserts that even modest financial support for nonprofit advocacy can lead to large benefits for marginalized groups.  Based on a study of 110 organizations, it concludes that for every $1 invested in such advocacy a $115 in benefits flowed to such groups or over $26 billion in total.

This study explores the metamorphosis of three major voluntary health agencies — American Cancer Society, American Heart Association, and American Lung Association — from charities supported primary by donations into lobbying organizations seeking taxpayers’ funds and grants from commercial enterprises in exchange for supporting private or political initiatives only peripherally related to their charitable missions. Prior to the 1980s, lobbying was all but nonexistent, limited to seeking increased funding for disease research. Fearing loss of tax-exempt status, health charities largely avoided political advocacy. The AIDS movement revealed that vast sums could be acquired from government by intense lobbying, and this advocacy evidently did not threaten tax-exempt status. All three of these charities copied the AIDS movement and targeted tobacco tax revenues at the state level. The American Lung Association, in particular, has acted as a public relations flack for both government agencies and corporations — selling its charitable reputation as a selfless entity concerned only with public health for self-interested purposes. The implications of this transition for both the charities themselves and the public interest are analyzed and discussed.

LHM

January 27, 2012 in Publications – Articles, Studies and Reports | Permalink | Comments (1) | TrackBack (0)

Friday, December 9, 2011

Higher Education President Compensation Continues to Rise

The NY Times reports that presidents of private colleges and universities continue to see their compensation increase at a rate above inflation, with 36 presidents earning more than $1 million in 2009 as compared to 33 in the previous year.  The data are from a Chronicle of Higher Education study that relied on information reported in the schools' IRS filings (Form 990).  One interesting aspect of the study is an interactive chart that compares presidential salaries to professorial salaries, with most schools bunching in the two to five times range but a few in the eight times or more range. 

LHM

December 9, 2011 in In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 23, 2011

A New Resource for the Church Tax Exemption Debate

In doing some trolling on the web, I came across a fairly new web site that addresses the pros, cons and history of tax exemptions for Churches.   The site is well-done, and with the exception of a few minor nitpicks (the exemption for churches goes back farther in history than Constantine; there are references to exemptions for churches in the Old Testament of the Bible and in ancient Egypt), gives a good overview of the issues involved in this continuing debate (about which I am sure we will hear more during the upcoming election cycle).

Check it out: http://churchesandtaxes.procon.org/

JDC

November 23, 2011 in Church and State, Federal – Legislative, State – Legislative, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, October 13, 2011

IRS Releases 2008 UBI Data

The IRS has released its 2008 unrelated business income statistics.  Based on a quick review, the data appears to relatively consistent with previous years, including slightly over 40,000 unrelated business income returns (Form 990-T), approximately $10 billion in gross unrelated business income reported, and $1 billion in net taxable income yielding approximately a third of a billion dollars in taxes.  Section 501(c)(3) organizations reported approximately half of the taxable income, with the rest spread among a variety of other types of tax-exempt organizations.

LHM

October 13, 2011 in Federal – Executive, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, July 19, 2011

Bias in Nonprofit News: Do American Campaign Academy and Big Mama Rag make any sense at all?

lead image

From the "so what?" department, the Pew Research Center for Excellence in Journalism reports in a new study that most nonprofit news organizations have a distinct ideological bent one way or the other, left or right.  Which is really to say that most news people, even those who work for good rather than profit, have an opinion.  Or maybe my own cynical bent is showing.  Anyway, according to the study, almost 60% of the nonprofit news organizations had an identifiable ideological philosophy.  Here is a summary of the major findings:

Among the findings:

  • The most ideological sites were Group Sites, those that belonged to one of two families organized by a sole or primary funder. One was a family of nine liberal sites that all have the word "Independent" in their names, funded chiefly by the American Independent News Network, which itself is funded by a variety of individuals and foundations, including the Open Society Foundations founded and chaired by George Soros. The other was a group of 12 conservative sites that share the name "Watchdog" and are funded chiefly by the Franklin Center for Government & Public Integrity, which was launched in part by a libertarian group called the Sam Adams Alliance.
  • The least ideological in their content were sites that operated entirely on their own and had multiple funding sources and revenue streams, sites such as The Texas Tribune (which lists 12 foundations among its dozens of "founding investors," as well as 64 corporate sponsors and hundreds of individual donors, and generates revenue from events and other revenue devices) and Connecticut Mirror (which lists 10 supporting foundations). These sites also tended to be more transparent and generate a relatively high volume of content.
  • One striking feature across many of the news sites studied was that while they may have been forthcoming about who their funders were, often the funders themselves were much less clear about their own sources of income. This effectively made the first level of transparency incomplete and shielded the actual financing behind the news site. The chief funders listed for nearly two-thirds of the sites studied-28 in all-did not disclose where their money came from.
  • Reporting resources in this emerging category of news operations tended to be quite limited. All the sites in the study had some staff and all produced original content at least weekly. The median was eight stories per week, but some averaged as few as one or two. And, of the 46 sites studied, the median reporting and editorial staff numbered just three people. At 18 sites-more than a third of those studied-just one or two people authored all of the stories analyzed.
  • Whether by design or due to resource limitations, the majority of news stories on these sites presented a narrow range of perspectives on the topics covered. Overall, half of the news stories studied (50%) offered just a single point of view on controversial issues. Just 2% of stories contained more than two points of view.
  • The topics covered on these sites often correlated with the political orientation of the sites and their backers. The more liberal-oriented American Independent News sites, for instance, heavily favored stories about the environment and organized labor, topics that did not appear among the most-covered for other groups of sites. The more conservative Watchdog.org sites, on the other hand, often set their focus on the government system itself, drawing attention to stories of inefficiency and waste.

So, what do these findings mean?  Should we turn the holdings of the American Campaign Academy or Big Mama Rag loose on these nonprofits?  Should we be surprised or even concerned?  It seems to me that nonprofits inevitably have an ideological bent, thus exposing the great irony of cases implying that nonprofits should be unbiased; in other words devoid of human influnce.  I don't think a non-ideological organization, profit or nonprofit, exists in nature.  The study, as far as I have read, does not report the reactions of those news organizations perjoratively labeled as "ideological." but I bet most of them would disagree that they are presenting "narrow" perspectives.  They are just as likely to conclude that the study author's have an ideological bent.  Ideology, I think, is in the eye of the beholder.

dkj

 

July 19, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Monday, June 20, 2011

Charitable Giving Increased By Only 2.1 Percent in 2010

A new report prepared by Giving USA Foundation and the Center on Philanthropy at Indiana University found that Americans gave $291 billion to charity in 2010, 4 percent more than they gave in 2009 but more than 6 percent below the all time record set in 2007.  After adjusting for inflation, though, giving increased by only 2.1 percent.  Click here for the report's executive summary, also available for free online:  Download GivingUSA_2011_ExecSummary_Printthe entire report is available for $75.00.  A Reuters report states:

Revised estimates by the study, which started in 1956, showed that during the financial crisis giving fell more than $10 billion in 2008 to $299.8 billion and then dropped more than 6 percent in 2009 to $280.3 billion. Patrick Rooney, executive director of the Center on Philanthropy at Indiana University, said that giving in 2010 grew by 2.1 percent after adjusting for inflation. "But the sobering reality is that many nonprofits are still hurting, and if giving continues to grow at that rate, it will take five to six more years just to return to the level of giving we saw before the Great Recession," he said.  The study estimates the giving by about 75 million households, up to 1.5 million corporations, an estimated 120,000 estates and about 77,000 foundations. That money goes to more than 1.2 million registered charities and some 350,000 American religious congregations. Individual giving rose by 2.7 percent in 2010 to $211.7 billion, charitable bequests soared nearly 19 percent to $22.8 billion, foundation giving remained unchanged at $41 billion and corporate giving rose more than 10 percent to $15 billion.  Edith Falk, chairwoman of the Giving USA Foundation, a philanthropic research group, said that while giving had started to rebound, the gains "suggest philanthropy is likely in for slow growth over the next several years" and changes in donor behavior during the recession are likely here to stay.

dkj

June 20, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, May 26, 2011

Bloomberg: "For-Profit College Costs Surpass Nonprofit Peers in U.S. Study"

Bloomberg reports that the U.S. Department of Education's annual The Condition of Education 2011 study for Congress finds that full-time, dependent students at for-profit colleges paid an average of $30,900 annually in the 2007-2008 academic year, as compared to $15,600 at public colleges and $26,600 at private nonprofit schools (see Figure CL-4 on page 11 of the study). These costs include living expenses such as housing and food and are after taking scholarships into account, which scholarships are significantly higher at at private nonprofit colleges than at for-profit schools.  The study also found less spending on instruction per student in 2008-2009 by for-profit schools, with four-year, for-profit colleges spending $2,659 per student, public institutions spending $9,418, and private, four-year, nonprofit colleges spending $15,289 (Figures CL-3 on page 10).  All these figures are in constant 2009-2010 dollars.  Finally, for-profit schools also had the highest average loan amounts in 2008-2009 for students with loans and the highest percentage of students with loans, with $9,754 and 81 percent for 4-year, for-profit institutions as compared to $7,712 and 61 percent for 4-year, private, not-for-profit schools and $6,029 and 47 percent for 4-year, public schools (Figure CL-5 on page 12).

LHM

May 26, 2011 in Federal – Executive, In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, May 25, 2011

CBO: Options for Changing the Tax Treatment of Charitable Giving

The Congressional Budget Office released a report yesterday entitled Options for Changing the Tax Treatment of Charitable Giving.  The report reviews 11 options grouped into four categories:

  • Retaining the current deduction for itemizers but adding a floor.
  • Allowing all taxpayers to claim the deduction, with or without a floor.
  • Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 25 percent of a taxpayer's charitable donations, with or without a floor.
  • Replacing the deduction with a nonrefundable credit for all taxpayers, equal to 15 percent of a taxpayer's charitable donations, with or without a floor.

The CBO evaluated the options with respect to their cost to the federal government (the "federal tax subsidy"), their effect on the total amount donated to charity, and the extent to which different income groups would benefit or be hurt by the proposed change.

LHM

May 25, 2011 in Federal – Legislative, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, February 2, 2011

JAMA Study Finds For-Profit Hospice Organizations "Cherry-Pick" Lower Cost Patients, Leaving Higher Cost Patients to Nonprofit Hospice; Medicare Payment Structure Incentivizes The Strategy

Capitalist systems are amoral (some might argue immoral) so the results of a recent JAMA study (described and linked to below) should not be surprising.  The study results helps us think about what should be the proper role of nonprofits in society.  Capitalism presupposes the necessity that in order for some to be rich, others must be poor.  Capitalism requires the poor and the poor will always be with us.  Nonprofits ought to militate against this particular amoral or immoral aspect of capitalism.  This is not to condemn capitalism in toto.  If, indeed, it provides more utility for more people than any other economic model than, of course, it is not entirely immoral.  But to determine beforehand that some people must, of necessity, be poor so most people have what they need is the quandry of capitalism.  Nonprofits help solve the quandry and, as I argued yesterday, should be tax exempt and supported in other ways only to the extent they do so. 

A study in the current Journal of American Medical Association helps demonstrate the broader point, while also demonstrating the need to make changes to the medicare payment structure.  The study concludes that for-profit hospice organizations typically select lower cost patients, leaving higher cost patients to the nonprofit sector.  Nevertheless, both for-profits and nonprofits are reimbursed using identical per diem rates.  Here is the study abstract:

Context: Medicare's per diem payment structure may create financial incentives to select patients who require less resource-intensive care and have longer hospice stays. For-profit and nonprofit hospices may respond differently to financial incentives.

Objective: To compare patient diagnosis and location of care between for-profit and nonprofit hospices and examine whether number of visits per day and length of stay vary by diagnosis and profit status.

Design, Setting, and Patients: Cross-sectional study using data from the 2007 National Home and Hospice Care Survey. Nationally representative sample of 4705 patients discharged from hospice.

Main Outcome Measures: Diagnosis and location of care (home, nursing home, hospital, residential hospice, or other) by hospice profit status. Hospice length of stay and number of visits per day by various hospice personnel.

Results: For-profit hospices (1087 discharges from 145 agencies), compared with nonprofit hospices (3618 discharges from 524 agencies), had a lower proportion of patients with cancer (34.1%; 95% CI, 29.9%-38.6%, vs 48.4%; 95% CI, 45.0%-51.8%) and a higher proportion of patients with dementia (17.2%; 95% CI, 14.1%-20.8%, vs 8.4%; 95% CI, 6.6%-10.6%) and other noncancer diagnoses (48.7%; 95% CI, 43.2%-54.1%, vs 43.2%; 95% CI, 40.0%-46.5%; adjusted P < .001). After adjustment for demographic, clinical, and agency characteristics, there was no significant difference in location of care by profit status. For-profit hospices compared with nonprofit hospices had a significantly longer length of stay (median, 20 days; interquartile range [IQR], 6-88, vs 16 days; IQR, 5-52 days; adjusted P = .01) and were more likely to have patients with stays longer than 365 days (6.9%; 95% CI, 5.0%-9.4%, vs 2.8%; 95% CI, 2.0%-4.0%) and less likely to have patients with stays of less than 7 days (28.1%; 95% CI, 23.9%-32.7%, vs 34.3%; 95% CI, 31.3%-37.3%; P = .005). Compared with cancer patients, those with dementia or other diagnoses had fewer visits per day from nurses (0.50 visits; IQR, 0.32-0.87, vs 0.37 visits; IQR, 0.20-0.78, and 0.41 visits; IQR, 0.26-0.79, respectively; adjusted P = .002) and social workers (0.15 visits; IQR, 0.07-0.31, vs 0.11 visits; IQR, 0.04-0.27, and 0.14 visits; IQR, 0.07-0.31, respectively; adjusted P < .001).

Conclusion: Compared with nonprofit hospice agencies, for-profit hospice agencies had a higher percentage of patients with diagnoses associated with lower-skilled needs and longer lengths of stay.

A Los Angeles Times article had this to say of the study:

They found that for-profit services had a lower proportion of patients with cancer than nonprofit providers, and a higher proportion of patients with dementia (which are, generally, less expensive to treat). For-profits had more patients living in nursing homes (also less expensive to treat.) 

The team also found that the average length of stay for patients in for-profit hospice was 20 days, while the average length of stay in a nonprofit hospice was 16 days.  Because costs are highest at the onset of enrollment and near death, longer stays in hospice are more profitable for providers.

Between 2000 and 2007 the number of for-profit hospice agencies more than doubled, from 725 to 1,660, while the number of nonprofit operators stayed about the same.  For-profits have "significantly higher" profit margins than nonprofits, reported the researchers. Indeed, nonprofits, true to their name, operate at a loss.

The team did not assess the relationship between profit status and quality of care, but did suggest that policy makers should consider the study's results when planning how Medicare hospice reimbursements will work in the future.

"Patient selection of this nature leaves nonprofit hospice agencies disproportionately caring for the most costly patients," the team wrote. "As a result, those hospices serving the neediest patients may face difficult financial obstacles to providing appropriate care in this fixed per-diem payment system."

 

dkj

February 2, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Tuesday, February 1, 2011

Draft Protection of Charitable Assets Act, with Comments

Thanks to Mark Fitzgibbons for passing along to us the Draft Protection of Charitable Assets Act prepared by the National Conference of Commissioners on Uniform State Law.  Fitzgibbons discusses the predecessor draft in the January 13, 2011 edition of the Chronicle of Philanthropy (subscription required).  He was kind enough, though to share his critical thoughts on the current draft, which we reprint below.  By the way, our co-editor Susan Gary served on the drafting committee:

 

Comments on the Protection of Charitable Assets Act, formerly the

Oversight of Charitable Assets Act

Mark J. Fitzgibbons[1][1]

 

I thank NCCUSL and the Drafting Committee on the Protection of Charitable Assets Act, formerly the Oversight of Charitable Assets Act (the “Act”), for allowing me to express concerns about the January 10, 2011 draft of the Act.  My comments do not express all objections I would make, but focus on changes to Section 4 of the Act, and I also make certain comments about the underlying premise of the Act.

The Prefatory Note to the Act states, “the committee has not seen evidence of overreaching by charitable regulators.”  I am not aware, on the other hand, whether the committee has seen evidence of a need for the Act.

History, however, is filled with examples of government abuse of charitable assets and charities, especially for political purposes and even perhaps before private miscreants ever abused charitable assets themselves.  For example, “Shortly after the reign of [Roman emperor] Marcus Aurelius . . . thirty barrack emperors in their struggle to rule Rome between 192 and 324 A.D. ‘borrowed’ funds belonging to charities from the municipal treasuries.”[2][2]  Using the excuse of fiduciary abuses by trustees, King Henry VIII dissolved the monasteries in the 1530s.[3][3]

My own files of just one agency are filled with examples of not merely overreaching, but abuse and unlawful conduct by state charity regulators.[4][4]  Charities are reluctant to publicize or even fight such abuses for two principal reasons:  (1) state regulators control their licenses to solicit contributions, and charities fear officious retaliation, and (2) charities fear that publicizing adversarial actions by states scares donors, and charities tend to enter into agreements with states regardless of whether state regulators engaged in abusive conduct.[5][5]

My friends the state charity regulators consistently turn a blind eye to their own violations of law, and when such violations are brought to their attention, their reaction tends to be, “So sue us.”  The Constitution is the law that governs government, but in addition to constitutional violations, state regulators often abuse, misapply and violate the state laws they purport to enforce.  State regulators are in fact the biggest violators of the laws that govern nonprofits, and any effort by this Committee must protect against abuses and unlawful actions by state officials.

Edits to the Act Fail to Cure Constitutional Defects, and Have Even Added More

The changes to Section 4 of the Act are not only woefully anemic with respect to preventing government abuse of charities, many are actually a step backwards.  Changes to Section 4 include feigned but failed constitutional fixes that will only foster litigation.[6][6]

While the changes provide a thin veil to address 14th Amendment objections I raised in my first set of comments, they fail to abide by all of the requirements of the 4th Amendment.[7][7]  Respondents are not protected against 4th Amendment violations caused by the Act, and would need to expend valuable, often scarce and overstretched resources in courts for the purpose of protecting their rights.

Instead of including protections against 4th and even 1st Amendment violations and abuses at the outset, the Act creates the need for charities to litigate.  Any statute that creates the need to litigate to protect rights is unworthy of consideration.

The Act gives attorneys general the unilateral power to commence investigations, which is a violation of the separation of powers and the principle of checks and balances.  To comply with all of the requirements of the 4th Amendment, including the need for oath and affirmation, the Act should only authorize investigations after oath and affirmation before a court or tribunal truly independent from the attorneys general, and only for actual cause (not upon mere “belief,” which is ripe for abuse).  The Act fails to provide such checks on abusive, unlawful or unconstitutional investigations.

The Comment to Section 4 includes a poor attempt to explain its evasion of the 4th Amendment: “Information often comes to the attorney general in a form much less formal that a sworn complaint; for example, information about abuses and misdeeds is often brought to light in newspaper stories.”

There is, of course, no “newspaper story” exception to, nor attorney general or state charity regulator exemption from, the 4th Amendment.  This Comment to Section 4, however, is typical of the approach by state regulators to cut corners, evade the law, and often use information less reliable than the higher standard of cause to initiate their investigations (or, for their political cronies, to ignore the need to investigate.  See, “ACORN and the AGs,” included in the exhibits to my comments).[8][8]

Revised Section 4 also includes a new provision that is a remarkably brazen violation of the 5th Amendment, which reads, “An individual may not refuse to answer a material question, produce documentary material, or testify in an investigation pursuant to this section on the ground that the testimony or documentary material may tend to incriminate the individual or subject the individual to a penalty.”[9][9]

That is not only an open and notorious violation of the 5th Amendment, it wasn’t allowed even under English common law.  In The King v. Dr. Purnell, 96 Eng. Rep. 20 K.B. (1748), for example, the Attorney General was denied visitation access to documents from Oxford University, which university was not “private” because it was established by the Crown, on grounds equivalent to the 5th Amendment right against self-incrimination.[10][10]

The Act’s Foundations Are Wrong

Besides the open and notorious violations of the Constitution proposed in the Act, and those it would foster such as violations of the 1st Amendment, the underlying premises of the Act are materially flawed.

State regulators claim they seek to clarify the common law, but they exaggerate the authority of the attorneys general even at common law, bypass common law procedural protections that prevented abuses the Act would authorize, and, under American jurisprudence and principles, attorneys general are bound by a written Constitution.

The attorney general was not initially given power over charities even by the 1601 Statute of Charitable Uses.  Investigations of fiduciary abuses could be brought by parties other than the attorney general, but only after information had been presented to a tribunal of commissioners.  After evidence of malfeasance, a warrant could be issued for the sheriff to gather a jury.  In other words, even at common law, there were distinct procedures, separation of powers, and checks on abusive use of government authority.

Decades after passage of the 1601 Statute the attorney general was given authority to act, but even then only as a relator.  The Act gives attorneys general more powers, both in terms of quantity and substance, than were given attorneys general in old English law.

Also, when a person brought a frivolous charge of fiduciary abuse against a charity, English law provided that a charity could recover damages.[11][11]  I highly recommend that the Act provide such a remedy both against attorneys general and private plaintiffs who use attorneys general as intervenors or relators in their frivolous suits.

American jurisprudence, beginning with Trustees of Dartmouth College v. Woodward, also made the important distinction of the “private” nonprofit corporation that may be “public” in its uses.[12][12]  Corporations of England were usually established by the Crown or the Church, which accounts for why at common law the attorney general had visitation authority.  The doctrine of visitation in America changed to reflect private property rights on which the government could not trespass without due process, or engage in takings or other breaches of private property rights.

American jurisprudence also recognizes the distinction between the privately created charitable corporation, where law applies, versus the charitable trust, where the principles of equity may apply.  The Act fails to make this important, even if misunderstood, distinction.  Indeed,

The new nation vehemently condemned anything reminiscent of English sovereign power or of an aristocratic society as unfit for a democracy.  Not only did some states repeal all English statutes including the Statute of Charitable Uses, but some jurisdictions rejected the doctrine of cy pres because it was mistakenly regarded as being exercisable only by the prerogative power of the king and hence contrary to the spirit of our democratic institutions and in conflict with the doctrine of separation of powers.[13][13]

Not all states recognize that the attorney general has common law authority with respect to charities.  That may be for the reason that not all states initially recognized cy pres, where the state could step in at equity where a charitable bequest was vague.  Attorneys general did have common law authority under cy pres, which isn’t universally recognized.  But even that is far, far different than the mighty powers the Act would grant attorneys general over the assets of privately created nonprofits.

The Act confuses principles and doctrine of private property versus civic charities, corporations versus trusts, law versus equity, and compounds these errors in a massive, unconstitutional power grab.  The Act’s power grab, however, is actually built on sand.

For example, the California Supervision of Trustees and Fundraisers for Charitable Purposes Act, Government Code 12580 – 12599.7 (the “CA Act”) fails to distinguish between a charitable trust and a charitable corporation.  California case law recognizes a common law authority of attorneys general, but the antecedent case on which all other cases ultimately rely is People ex rel. Ellert v. Cogswell, 45 P. 270 (1896).

Mrs. Cogswell and her husband created a trust giving their real property to create a school for Californians pursuant to a California act specifically created to encourage such gifts.  Mrs. Cogswell attempted to block the gift on grounds that due to ailments she never understood the scope and breadth of it.  The mayor of San Francisco acted as relator, and the state sought to enforce the trust over Mrs. Cogwell’s objections and efforts to obtain remedy.

California is just one example of a state that has taken minimalist principles in equity and only applicable to trusts or gifts to state institutions, and contorted, expanded and compounded them to aggrandize the authority of the state over privately created charitable corporations.  That approach was rejected in Trustees of Dartmouth College v. Woodward.

If a uniform law were needed, the Act unfortunately takes the worst elements most favorable to aggrandizing government power and harmful to nonprofits, while serving no apparent benefit to the public, especially given the excessive regulation already in place.

My friends the state regulators sadly seek to create yet another inept system adding expense for both states and charities, ultimately financed by taxpayers and donors, where information goes into yet another bureaucratic black hole.  They have already demonstrated inadequate and unlawful administration of current laws, yet they seek to compound the misery through the Act.

A better uniform law would be the online disclosure system I have proposed to state regulators.  It would provide information to even more state regulators than the current charitable solicitation laws and the Act combined would provide.  It would also provide donors more information than current law and the Act combined, which are bureaucratic black holes.  Lastly, the online disclosure system would save both states and charities money, which money is currently diverted from taxpayers and donors’ intended purposes for their contributions and gifts.

The changes to the Act shown in the January 10 draft are not a serious effort.  There are other problems with the Act that I do not address.  After reading the January 10 draft and based on my nearly two decades of dealing with state charity regulators, I am not convinced the Act is a worthy project.



[1][1] President of Corporate and Legal Affairs, American Target Advertising, Inc. (ATA), Manassas, Virginia

[2][2] E. FISCH, D. FREED, E. SCHACHTER, CHARITIES AND CHARITABLE FOUNDATIONS Sec. 18, at 10 (1974).

[3][3] Fishman, The Political Use of Private Benevolence: The Statute of Charitable Uses, DIGITALCOMMONS@PACE, at 29 – 30 (April 23, 2008).

[4][4] I attach as exhibits several published accounts.  There is not a single state with which I deal that hasn’t engaged in abusive or unlawful conduct, and my letters are too voluminous to include as an attachment to these comments.

[5][5]  The Act applies to many more organizations than just charities, such as 501(c)(4) organizations. These comments use the term “charity” to apply to all nonprofits covered by the Act, and even the entities that are not nonprofits covered by the Act.

[6][6] Please, as Thomas Jefferson once wrote to James Madison, pardon my freedom.

[7][7] “The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.”

[8][8] As the Supreme Court has stated, “Officious examination can be expensive, so much so that it eats up men’s substance.  It can be time-consuming, clogging the process of business.  It can become prosecution when carried beyond reason.” Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 213 (1946).

[9][9] The sentences following the violation of the 5th Amendment feign immunity, but such immunity would not be recognized in jurisdictions other than the state issuing the demand, or by the federal government.

 [10][10] Justice McKenna’s dissent in Wilson v. United States, 221 U.S. 361 (1911), citing to an abundance of common law decisions, explains why the majority opinion misconstrued the common law and Hale v. Henkel, 201 U.S. 43 (1906) in deciding that an individual may not invoke the 5th Amendment when a corporation’s records are sought.  Hale v. Henkel, at 76, recognized, among other things, that corporations are protected by the 4th Amendment, and “an order for the production of books and papers may constitute an unreasonable search and seizure within the Fourth Amendment.”  The Act’s violation of the 5th Amendment doesn’t even confine itself to the limited doctrine espoused in Wilson v. United States.

[11][11] Fishman, at 31.

[12][12] My article “State Regulators Make a Misguided Push to Tighten Control Over Charities” in the January 13, 2011 Chronicle of Philanthropy provides a brief summary.

[13][13] FISCH, Sec. 22, at 21.

 

dkj

February 1, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, January 13, 2011

"Spending and Management of Endowments under UPMIFA"

The Association of Governing Boards of Universities and Colleges, in conjunction with the Commonfund Institute has issued a very informative report regarding the effects of the Uniform Prudent Management of Institutional Funds Act on college, university and institutionally related foundations.  Key findings include:

On average, underwater funds accounted for 22.4 percent of the total value of endowment funds held by colleges and universities at the end of the 2009 fiscal year ending June 30, 2009 (NCSE data).  Under UPMIFA, institutions and affiliated foundations have adopted new spending practices yielding greater ongoing distributions from underwater endowments as well as adopting a variety of more flexible methods for determining distributions from underwater endowments. AGB’s survey findings include (as seen in Table 4):

• 46.9 percent are continuing distributions in keeping with their normal spending rule, an increase of 8.7 percentage points over practice prior to the enactment of UPMIFA;

• 25.1 percent are discontinuing all distributions from underwater funds, a decrease of 16.4 percentage points from practice prior to UPMIFA;

• 9.7 percent are distributing only interest and dividends, a decrease of 7.2 percentage points from practice prior to UPMIFA;

• 12.5 percent employ a threshold or tiered approach to spending or some other flexible methodology; and

• 6.8 percent of institutions described a flexible process for determining distributions from underwater funds that was used in lieu of or in conjunction with the spending practices listed above.

After the enactment of UPMIFA, 47.1 percent of institutions and foundations which previously discontinued all distributions or distributed only interest and dividends from underwater endowments adopted a new spending approach likely to yield grater ongoing distributions supporting endowment purposes.

College, university, and affiliated foundation boards are actively involved in making decisions about spending from underwater funds. Survey findings include:

• 75.8 percent of boards approve decisions regarding spending from underwater funds;

• 68.2 percent of institutions have some formal policy addressing spending from underwater funds; and

• 48.3 percent of boards document decisions regarding underwater funds in their minutes.

Only 14.5 percent of institutions and foundations have made use of provisions in UPMIFA allowing charities to modify restrictions on smaller and older funds that have become impracticable or wasteful.

Institutions and foundations have also made changes to endowment-management practices not immediately related to spending from underwater funds but in keeping with UPMIFA’s updated prudence standard for investment and management of charitable funds. Nearly one-third (28.5 percent) of institutions have changed their approach to portfolio construction to focus on factors such as risk reduction, inflation protection, and liquidity; 11.6 percent have made changes in their due diligence and risk management procedures; and 19.3 percent have made changes in investment management staffing and support.

 AGB’s recent Statement on Conflict of Interest has advocated heightened conflict-of-interest standards for board members involved in investment decision making. While 97 percent of boards have some type of conflict-of-interest policy, only 60.9 percent of institutions and foundations have conflict-of-interest policies that apply to all volunteers responsible for investment decision making; 15.9 percent have policies which include especially rigorous provisions applicable to investment decision makers; and 13.5 percent have policies addressing board members’ parallel or “side-by-side” investments.

dkj

January 13, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Monday, January 10, 2011

Does Unrelated Business Activity Detract from the Charitable Goal?

One would think that in an age of severely restricted donations and government funding, nonprofits would logically step up their unrelated business activities in an effort to generate funds for their charitable goals.  Now, though, one researcher finds that doing so only exacerbates the problem.  According to a recent report authored by Rebecca Tekula of the Wilson Center for Social Entrepreneurship at Pace University, nonprofits that engage in unrelated business activity do so at the expense of their charitable goal. 

By pursuing income-related activities such as selling donors' contact information to third-party marketers and running online shops, nonprofits have diverted income away from service activities, says Rebecca Tekula, the report's author.

[CHARITIES]

"Organizations that spend money and divert resources to other activities do so at the detriment of the homeless, domestic violence victims and people who need these services," says Ms. Tekula, executive director at the Wilson Center for Social Entrepreneurship at Pace University. "Social enterprise may be an innovation," she says, but it is one that can tempt nonprofits into a substantial "mission distraction."

The Wall Street Journal wrote about the report  (subscription required) in its November 4, 2010 issue.  If the report is correct, engaging in unrelated business activities not only jeopardizes tax exempt status (if the activity is substantial enough) but it also accomplishes exactly the opposite of what is intended.  Rather than funneling money into charitable causes, unrelated business activities divert funding from charitable causes.  The UBIT has always been justified as a tool to level the playing field between for-profit and tax exempt entities.  Now, it seems the UBIT might also be effective in ensuring the more effective accomplishment of the chartiable goal.

dkj

January 10, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Monday, January 3, 2011

IF PILOTS ARE NORMATIVE IS PROPERTY TAX EXEMPTION NON-NORMATIVE?

The Georgia Alliance of Community Hospitals recently issued a report attempting to head off any efforts by the Georgia legislature to tamper with or even repeal the property and or sales tax exemption provided to large nonprofits.  The report takes the bait, as it were, with regard to PILOTS and property tax exemption.  The bait, I think, is the notion that nonprofits should quantify the benefit they provide in exchange for property tax exemption.  Its bait because nonprofits can't possibly win in a cost/benefit contest.  The Chattanooga Times Free Press reports on a growing trend that is hardly good news for large, commercialized nonprofits:

All Georgia tax credits and exemptions are in the spotlight this year.The Georgia Legislature created the Special Council on Tax Reform last year and charged it with examining the tax credits and exemptions, said Sarah Beth Gehl, with the Georgia Budget and Policy Institute.  The state has hundreds of tax exemptions on the books, some decades old, that haven't been evaluated recently for effectiveness, she said.  "Often we put these credits and exemptions in place and we never look at them again," she said. "We need to go back and evaluate and examine these and make sure we're getting the return on investment. ... That doesn't mean we're going to cut all of them, but it means we're going to really hold them accountable."  Perdue spokesman Bert Brantley said the attention to exemptions represents a new level of budgetary scrutiny.

Right before Christmas, Professor Mayer authored an interesting post concerning Boston's task force on Payments in Lieu of Taxes (PILOTS).  The task force had recently issued a 130 page report.  I have not read the report yet but I am in the midst of asking myself why and whether states should exempt large land-owning nonprofits (i.e., hospitals and universities) from property taxes at all.  The question was slightly different when it first occured to me.  Why should large commercialized nonprofits be exempt from any taxes, income, property or otherwise?  I am sludging my way through a paper on the topic and have at least determined that the justification for property and income tax exemption are not necessarily the same.  The initial question was too broad because justifications for income tax exemption do not necessarily work for other exemptions and yet if the question is accurate one can comfortably stop once the case for income tax exemption is made. 

Comfortable but probably wrong.  The cost/benefit analysis relating to income and property tax exemption give dissimilar results.  And as a result, we might easily and more accurately conclude that income tax exemption is justifiable but property taxation is not.  That is where my paper is stuck.  So far I have spent a lot of time wondering whether property tax exemption is defensible using the mindset of federal income tax exemption.  For one, though, the cost of income tax exemption is so much lower.  Hence, the benefit necessary to justify income tax exemption need not be so readily apparent or quantifiable.  As costs increase, and perhaps there is a tipping point at which property taxation can no longer be justified, the benefits must increase too.  Stereotypically, nonprofit stakeholders disdain cost/benefit analysis not because they can never win but because it is difficult to quantify the intangible benefits provided by nonprofits and therefore nonprofit stakeholders who fall into the trap of cost/benefit, law and economics analysis . . . well, can never win.  Unlike me, they should not take the cost/benefit bait, thinking they can win and thereby justify property tax exemption.  The battle may be won with respect to income tax exemption and even then the losers are not satisfied that the battle should be over. 

If you take a look at the Boston PILOT task force websight you will find presentations such as this one, wherein the task force is provided with cost/benefit data regarding nonprofit hospitals and universities within their midst.  Its fair to say, probably, that the train has left the station with regard to PILOTS, a fact which worries me because once PILOTS become normative, it does not take much more to conclude that property tax exemption is no longer justifiable, at least once a nonprofit reaches a certain level of ownership or wealth.  Once PILOTS are normative, aren't property tax exemptions "non-normative?"  My problem is that I have been resisting this notion by reference to income tax exemption and the rationale usually offered to support that exemption.  Doesn't work with regard to property taxation though.  My real point, though, is that is probably too late to stop the PILOT train and so now colleges and universities have to deal with the 800 pound gorilla in the room.  Why should you be exempt from property taxes at all, especially if you meekly comply when chastised and made to pay back that which you have "stolen" from the cookie jar.  The Boston PILOT task force website is essentially a record of the sophisticated ways large cities have been able to chastise large commercialized nonprofits for their apparently unjustified tax exemption.  Brief nods are given to efforts to quantify the benefits generated by colleges and universities but one is only fooling oneself to think that nonprofits can ever win in a cost/benefit, law and economics playing field. Make no mistake, though, the cost/benefit analysis will never cut the mustard.  Large, commercialized nonprofits have already wasted too much time thinking PILOTS would remain limited to larger northeastern cities and even if they don't, nonprofits can always be show enough benefit to justify the cost of property tax exemption.  The Georgia Alliance's report is evidence of how Utopian the former notion (that PILOTS will largely be confined to big cities in the northeast); more importantly, it is an effort that cannot save property tax exemption anywhere.  The lesson to be learned from law and economics is we better think again or soon admit that property tax exemption -- once the "tipping point"  arrives -- is unjustifiable.

dkj

 

January 3, 2011 in Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, December 23, 2010

Boston Issues Report Detailing Expected "Contributions" from Charities

A Payment In Lieu of Taxes (PILOT) task force created by Boston Mayor Thomas M. Menino just issued a report making numerous recommendations regarding the city's existing PILOT program.  According to the related press release, the task force's main recommendations are:

  • The PILOT program should remain voluntary.
  • The PILOT program should be applied to all nonprofit groups except for smaller nonprofits, suggesting a threshold of $15 million in property value.
  • The PILOT contributions should be based on the value of real estate owned by a nonprofit, with a suggested amount of 25% of the tax otherwise owed (approximately equal to the portion of the city's budget that goes to police, fire, snow removal, and other essential services).  This formula should be in phased in over a period of not less than 5 years.
  • The credit for "Community Benefits" should be limited to 50% of the full PILOT payment.  Such benefits include public health initiatives, scholarships for Boston public school students, and summer jobs.

The report now goes to the Mayor for his consideration and possible implementation.

Press Coverage:  Boston Globe, Boston Herald.

LHM

December 23, 2010 in In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Thursday, November 11, 2010

Obama's Debt Panel and Tax Benefits for Charities

The National Commission on Fiscal Responsibility and Reform released its draft CoChairs' Proposal in the form a 50-slide PowerPoint presentation and a 24-page illustrative savings list totaling $200 billion in 2015.  With tax reform as one of the five basic recommendations made, and no apparent sacred cows, it is not surprising that the current tax benefits enjoyed by charities are among the many targeted tax provisions.  Here is how the three proposed tax reform options would affect those benefits:

  • Option 1 (The "Zero Plan"):  Would eliminate all tax expenditures or, alternatively, preserve only a few such tax benefits in exchange for higher marginal rates.  Using the most recent Joint Committee on Taxation Tax Expenditures List (from January of this year), eliminated provisions would include not only the charitable contribution deduction but also tax-exempt bonds, low-income housing credits, and other tax benefits that charities commonly use to advance their mission, such as the exclusion of scholarship and fellowship income, numerous other education-related tax benefits, the credit for rehabilitation of historic structures, the exclusion of certain foster care payments, and similar benefits.  With respect to other types of nonprofits, the list also includes tax exemption for credit union income.  And this summary does not include those benefits not unique to nonprofits that are nevertheless utilized by them, such as the exclusion from gross income of employer-provided health insurance.
  • Option 2 ("Wyden-Gregg Style Reform"):  Would modify the charitable contribution deduction by establishing a 2 percent AGI floor.
  • Option 3 ("Tax Reform Trigger"):  Would create an across-the-board "haircut" for all itemized deductions as well as certain other tax benefits if reform not enacted as of 2013.  The size of the haircut would be set at a level sufficient to reduce the deficit by $80 billion in 2015, which roughly translates in about a 15% reduction in such deductions, including the charitable contribution deduction.  This proposal would also require the haircut to increase over time in the absence of comprehensive tax reform.

The list of illustrative savings also has some items of interest to nonprofits, including the proposals to have the Smithsonian start charging fees and to eliminate Corporation for Public Broadcasting funding.

These proposals only represent the views of the co-chairs, former Senator Alan Simpson and former Clinton Chief of Staff Erskine Bowles.  The final Commission report is due to be released no later than December 1, 2010, but it must receive the approval of at least 14 of the Commission's 18 members.

LHM

November 11, 2010 in Federal – Executive, In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 10, 2010

Mixed Picture for Nonprofit Donations and Endowments

Studies of financial support for nonprofits have become a growing industry, as evidenced by the following slew of reports:

  • The Chronicle of Philanthropy reported last month that donations to the nation's 400 largest charities by private funding dropped 11 percent in 2009 from the previous year.  As for 2010, of the more than 25 percent of groups that provided a prediction, the median estimate was an increase of only 1.4 percent over 2009 amounts.
  • Not all charities have been hit equally, however.  The Evangelical Counsel for Financial Accountability issued its 2010 Annual State of Giving Report yesterday, which found that among ECFA members giving declined only by 0.7 percent in 2009 as compared to 2008.  At the same time, the report found significant differences depending on activity type, with, for example, members involved in child sponsorship seeing a significant increase in giving while members involved in education seeing a substantial decline. 
  • Focusing on high net worth individuals, Bank of America Merrill Lynch issued its 2010 Study of High Net Worth Individuals in cooperation with Indiana University's Center on Philanthropy.  That study found that while such individuals continued to give at high rates, the amounts given declined from 2007, with overal average gift amounts falling by 35 percent after adjusting for inflation.  As a percentage of income, giving declined to 9 percent from 11 percent in 2007.  For additional coverage of this study, see the Los Angeles Times.
  • College and university endowments have also been the subject of a recent report.  The Commonfund Institute reports that based on data from 80 such institutions, the July 1, 2009 to June 30, 2010 fiscal year saw an average return of 12.6 percent.  Interestingly and contrary to some past trends, the smaller endowments showed on average higher returns.  The Institute relied on preliminary data for the 2010 NACUBO-Commonfund Study of Endowments, which will be released in late January.

LHM

November 10, 2010 in In the News, Studies and Reports | Permalink | Comments (0) | TrackBack (0)