The Law of Tax-Exempt Organizations, 2021 Cumulative Supplement. Bruce R. Hopkins

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СКАЧАТЬ (an increase of 75 percent compared to 2017) with total assets of $72.35 billion. The compound annual growth rate of donor‐advised funds in this category is 46.4 percent (2014–2018). Contributions to these donor‐advised funds reached $23.38 billion in 2018 (a 24.1 percent increase over 2017). Grants from these funds in 2018 totaled $13.1 billion (a 26.8 percent increase). Charitable assets in these funds had a value of $72.35 billion (a 22.6 percent increase). The average fund size of these funds in 2018 is estimated to be $121,937 (a 30 percent decline). The total payout rate from these funds in 2018 is 22.2 percent (down from 23 percent).

      The report analyzes data from 603 community foundations. These sponsoring organizations had, in 2018, combined 77,234 donor‐advised funds (a 2.8 percent increase) and total assets of $33.87 billion. The compound annual growth rate of these funds is 3.9 percent (2014–2018). Contributions to donor‐advised funds at community foundations in 2018 totaled $8.38 billion (a 15.4 percent increase). Grants from these funds amounted to $6.59 billion (a 10.2 percent increase). Charitable assets in these funds in 2018 were $33.87 billion (a 14.9 percent decrease). The average account size was $438,561 (a 17.2 percent decrease). The total payout rate from these funds in 2018 is 24.8 percent (an increase from 20 percent).

The 332 single‐issue charities reflected in this report held, in 2018, 57,973 donor‐advised funds (a 5.1 percent increase), with charitable assets totaling $15.19 billion. The compound annual growth rate (2014–2018) was 5.9 percent. Contributions to these funds totaled $5.36 billion (an 11.7 percent increase). Grants from these funds were $3.73 billion (a 10.3 percent increase). Charitable assets amounted to $15.19 billion (an increase of 14.5 percent). The average account size of these funds in 2018 was $262,075 (a 9 percent increase). The payout rate from these funds was 28.2 percent (a drop from the 2017 rate of 29.6 percent).

The NPT expects that grantmaking from donor‐advised funds “will continue to grow at a consistently high rate.” It is noted that, in 2018, the growth in contributions to donor‐advised funds outpaced the growth of grants from these funds, reversing a four‐year trend. Speculation is that bunching is a major factor in this regard. Another observation is that “emerging models” for donor‐advised funds, such as workplace giving using them and low‐ or no‐minimum donor‐advised fund accounts “will play a significant role” as to the number of individual accounts and consequently “drive down the average donor‐advised fund account size.”^96.2

§ 11.9 ENDOWMENT FUNDS

      (b) College and University Endowment Tax

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      Also Reg. § 53.4968‐1(a).

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      IRC § 4968(b)(1); Reg. § 53.4968‐1(b)(1).

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      ; Reg. § 53.4968‐3(a)(1).

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The number of students of an institution (including for purposes of determining the number of students at a particular location) is based on the daily average number of full‐time students attending the institution (with part‐time students taken into account on a full‐time student equivalent basis).^105.1

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(ii) Final Regulations. The Department of the Treasury and the IRS issued final regulations concerning the excise tax applicable to the net investment income of certain private colleges and universities.^108.1

      The statute does not define the terms student, tuition‐paying student, or similar to. It does not define the term control as it relates to the definition of a related organization with respect to an educational institution. These final regulations provide general definitional guidance with respect to these and other relevant terms and rules. They are, in several aspects, more favorable, from the standpoint of colleges and universities, than the proposed regulations.

The final regulations define the term student as an individual who is enrolled and attending a course for academic credit from the educational institution and who is being charged tuition at a rate that is commensurate with the tuition rate charged to students enrolled for a degree.^108.2 The standards for determining full‐time and part‐time students, and full‐time equivalents, are determined by each institution.^108.3 (This is an expanded definition of the term student, which may enable some institutions to sidestep this excise tax by reason of the $500,000‐per‐student ratio.) They do not count federal, state, and local grants or financial aid as tuition but count grants and scholarships provided by a nongovernmental party other than the particular educational institution as tuition.^108.4 A student is considered to be located in the United States on the basis of each institution's reasonable approach on the point, as long as the rule is consistently applied.^108.5

The final regulations expand the concept of assets that are exempt from the tax base to include certain intangible assets and nonfinancial assets used in a functionally related business and certain assets of organizations that are related to the educational institution.^108.6 An asset of a related organization that is treated as an asset of an educational institution and that is used directly in carrying out an educational institution's exempt purpose, or that is used directly in carrying out the exempt purpose of a related charitable organization, is considered used directly by the educational institution in carrying out its exempt purpose.^108.7

Net investment income is determined using the law similar to that concerning the net investment income of private foundations.^108.8 Excluded from the concept of gross investment income^108.9 are interest income from student loans, certain royalties, and certain rental income from the provision of housing to students and faculty.^108.10 Capital loss carryovers may be used by educational institutions with more flexibility than private foundations.^108.11

As noted, the assets and net investment income of a related СКАЧАТЬ