The Law of Tax-Exempt Organizations + Website, 2017 Cumulative Supplement, 11th Edition

CHAPTER ELEVENOther Charitable Organizations

1. § 11.9 Endowment Funds

§ 11.9 ENDOWMENT FUNDS

(b) College and University Endowments

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(i) IRS Compliance Check.

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Two federal government studies of college and university endowment funds have been recently published.

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(ii) CRS Report.

The Congressional Research Service, in a report made public on December 4, 2015, provided background information on college and university endowments, and summarized various options for changing their treatment under the federal tax law.

This report discussed college and university endowment fund basics, with the term endowment defined simply as an “investment fund maintained for the benefit of the educational institution.” Definitions are provided for true endowments, otherwise known as permanent endowments, including those with restrictions imposed by donors. Also referenced are term endowments and quasi endowments.

For 2014, $226.6 billion (44 percent) was held in true endowments and $119 billion (23 percent) was in quasi endowments. Of the true endowment balance, $210.3 billion was donor-restricted. The term endowment balance was $17.9 billion.

At the close of fiscal year 2014, endowment balances for the 832 institutions included in the National Association of College and University Business Officers–Commonfund Study ...