What's in Store for Endowments?

By April 5, 2017 March 7th, 2019 Trusteeship Article

A new administration in Washington and a Republican-controlled Congress may bring significant changes to the treatment of college and university endowments. Jon DeVaan, board chair of the Oregon State University Foundation, takes a look at what we can expect in the next four years.

How might policy changes impacting college and university endowments and charitable giving incentives affect institutions like yours?

We know significant national tax reform is likely. This could have major impacts on philanthropy and donors’ after-tax cost of giving. For virtually every spectrum of our donor base, the incentives for giving outright and through estate gifts, as well as philanthropy in general, are facing potential headwinds in proposed changes.

There are two paths for volunteer leaders to consider. One is to engage with policymakers to make sure they hear your college or university’s message. The second is for board leaders to play a key role communicating with the donor community, working with staff to ensure institutions make the strongest possible case for support. Telling an institution’s stories, effectively and in a way that distinguishes it from others, is a powerful tool to help donors continue to invest in our students and programs.

How can foundation boards advance public policy that supports the work of their foundations and the interests of their affiliated institutions?

It is important to create a structure that supports volunteer leaders to deliver a disciplined and consistent message to policy makers. The volunteer leaders of the OSU Foundation formed the “Beaver Caucus,” an independent 501(c)4 organization. Managed and directed by a volunteer board of directors, it is affiliated with, and partially funded by, the OSU Foundation.

It is important to know that there are legal limits on what such an organization can do and how it relates to a university. Anyone pursuing this path needs to seek strong legal counsel. It is also crucial that such work is aligned with the university’s and foundation’s messages. Inconsistent messaging is the easiest path to failure when dealing with policymakers.

The Beaver Caucus enlists several hundred volunteers to communicate with political leaders. There are grass roots members, who make calls and write letters, and grass tops volunteers who have professional and personal legislative connections. The caucus recruits members through public meetings, a promotional video screened at university events, and social media presence.

The organization hosts public events to discuss its policy opinions, including OSU-specific lobbying days at the state capitol.

What are some ways foundations are partnering with their institutions on policy issues?

It is important to have open dialogue between institutional leaders and foundation and volunteer leadership. At OSU, it started with inviting our university president to every foundation board meeting and grew into the decision to start the Beaver Caucus. Recently, we have been focusing on better aligning the university and foundation boards by using joint orientations; we’ll soon hold our first joint board meeting.

How can board members be most effective when talking to policymakers?

The unique aspect a volunteer leader can bring to the discussion is a personal story that repeats a consistent message. For example, if the institution’s message is the importance of philanthropy to the university, then have volunteer leaders tell the story of why they give and how proud they are of the impact their gift has had on the university. It could be even more powerful if followed by students and researchers telling the same story from the other side.