Charitable IRA Rollover Generates $70 Million in Donations at Private Colleges and Universities, in Its First Five Months

April 12, 2007

FOR IMMEDIATE RELEASE                    CONTACT: Tony Pals, tony@naicu.edu
April 12, 2007                                    office: 202-739-0474     cell: 202-288-9333
 
WASHINGTON, DC, April 12 - New survey results from the National Association of Independent Colleges and Universities show that the IRA charitable rollover has had a significant impact on philanthropic giving at private institutions. 
 
The temporary federal tax provision, which was approved by Congress for the first time in August 2006, generated more than $70 million in new contributions in its first five months of existence.  IRA rollover gifts were reported by 70 percent of the responding colleges and universities, with an average of 10 gifts per institution. 
 
Nearly two-thirds of respondents designate using funds for student financial aid.  Other categories of use include, but are not limited to, annual funds, academic programs, loan repayment assistance, travel funds for study-abroad students, graduate fellowships, and faculty salaries.
 
The rollover allows individuals age 70-1/2 and older to withdraw funds from either a traditional IRA or a Roth IRA, and make direct gifts to any public charity.  Current law requires individuals to start withdrawing IRA funds at this age.  The rollover provision allows excess funds not necessary for retirement purposes to be donated to charities, including colleges and universities.  Gifts are limited to $100,000 per person, per year. 
 
Without congressional action, the provision will expire on December 31, 2007. 
 
Eighty-four percent of respondents believe there is a definite potential for increased giving with an expansion and extension of the IRA rollover.  Many development offices report that they have donors interested in continuing making gifts beyond 2007 as a result of the rollover.
 
Most of the college officials responding believe that making three changes to the provision will further increase giving:
 
* Allowing gifts at a lower age limit (71 percent of respondents)
* Expanding the rollover to allow indirect gifts (65 percent of respondents)
* Removing the cap on the amount that could be given (58 percent of respondents)
 
"Ultimately, it is students who benefit from the IRA rollover," said NAICU president David L. Warren. "The new revenue it generates is proving to be a reliable funding source for new institutional grant aid.  It is also improving the overall quality of the academic experience.
 
"Congress needs to extend or make permanent the successful rollover in order to keep these philanthropic gifts flowing and benefiting students," Warren added.
 
NAICU conducted the IRA rollover survey from January to March 2007, with 690 private non-for-profit institutions responding.
 
NAICU serves as the unified national voice of independent higher education.  With nearly 1,000 member institutions and associations nationwide, NAICU reflects the diversity of private, nonprofit higher education in the United States.  NAICU members enroll 85 percent of all students attending private institutions.  They include traditional liberal arts colleges, major research universities, church- and faith-related institutions, historically black colleges, Hispanic-serving institutions, single-sex colleges, art institutions, two-year colleges, and schools of law, medicine, engineering, business, and other professions. 

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What Colleges Are Saying about the Charitable IRA Rollover
 
Carroll College
Helena, Montana
$101,000 in IRA rollover gifts (August 2006 - January 2007)

"There is great potential for additional gifts through the charitable rollover.  We have received numerous inquiries, several new donations, and additional pledges for this year.  I am convinced that with enough time to turn donor interest into action, we would further benefit." 

- Richard Ortega, vice president for advancement, Carroll College
 
Texas Christian University
Fort Worth, Texas
$229,835 in IRA rollover gifts (August 2006 - January 2007)

"TCU received $229,835 in new gifts as a result of IRA rollover.  The funds were directed to scholarships, capital projects, and more.  We consider the rollover to be a major incentive in our overall planned giving and fund raising program. And we expect that it will be even more productive for us in the future."
 
- Victor Boschini, chancellor, Texas Christian University
 
Wartburg College
Waverly, Iowa
$203,031 in IRA rollover gifts (August 2006 - January 2007)

"Educating donors and the college's advancement professionals was an important component in our initial marketing plan regarding the IRA rollover.  As our donors and staff become more familiar and comfortable with the process, we feel the potential for new gifts will continue to grow. Consequently, we encourage Congress to continue the rollover option, which will significantly impact students in positive ways."
 
- Jack Ohle, president, Wartburg College
 
 

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