The College Donor Digest
Three Trends to Watch in 2022
January 14, 2022 | Emily Burden Rees
The COVID-19 pandemic has pushed the philanthropy sector to innovate creatively in response to challenges. Nonprofits quickly pivoted to virtual fundraising events and revamped their social media; some grant-making organizations, like the Ford Foundation, even accelerated payment schedules to help nonprofits respond to urgent needs.
So, what’s next? Here are three trends to watch for in 2022.
1. Alumni Free Speech Groups
Rational debate and the free exchange of ideas are the lifeblood of higher education and are essential for a vibrant democracy. Unfortunately, these core values are under attack. The American Council of Trustees and Alumni (ACTA) has documented that the stifling of thought in favor of intellectual orthodoxy on college campuses is very real.
Alumni have taken notice and are mobilizing to defend academic freedom at their alma maters. In 2021, Princeton University graduates and founders of the Princetonians for Free Speech, Edward Yingling and Stuart Taylor, Jr., founded the Alumni Free Speech Alliance (AFSA) and announced it in a Wall Street Journal article. The group seeks to unite concerned alumni across the country who want to protect free speech and open inquiry.
AFSA’s formation unleashed a flood of interest, and many alumni are reaching out for help to create their own advocacy groups. FAR Director Emily Koons Jae wrote in Philanthropy Daily about free speech challenges at her own alma mater, Davidson College. Alumni clearly want to help their schools chart a better way forward, but how these institutions will respond to their former students remains to be seen.
Watch for the creation of more free speech groups by prominent university alums, maybe even one at your own alma mater.
2. Efforts at the State Level to Protect Donor Intent
Last fall, the Ohio Senate passed a higher education reform bill that contains provisions to protect the intent of donors to public institutions in the state. The bill is currently being considered by the Ohio House Higher Education and Career Readiness Committee.
The provisions in Senate Bill 135, if passed, would give Ohio’s public college and university donors the standing to sue, in limited circumstances, if institutions failed to uphold the terms of restricted gift agreements. Currently, only the attorney general can restitute broken agreements. The bill would allow donors, or designated third parties, to file a complaint if the attorney general office fails to obtain “full compliance with the restriction” within 180 days.
Watch to see if the Ohio legislature votes on the bill later this year and if other states take similar action to expand donor standing
3. Charitable Giving Reform
Some organizations are advocating for increased federal regulation of the charitable giving sector, especially regarding donor-advised funds (DAFs), which have little regulation. The Initiative to Accelerate Charitable Giving is a coalition of philanthropists and nonprofit professionals who want to increase the rate of charitable giving from donor-advised funds. Donors who give to DAFs receive an immediate tax break.
According to Giving USA, DAFs accounted for 6% of charitable dollars in 2019. Though a small percentage, this represented a 150% increase from five years earlier, and DAFs continue to be an increasingly popular giving vehicle.
Influenced by the Initiative to Accelerate Charitable Giving, Senators Angus King (I-ME) and Charles Grassley (R-IA) sponsored the Accelerating Charitable Efforts (ACE) Act in June 2021. The bill seeks to “amend the Internal Revenue Code . . . to modify rules relating to donor-advised funds” and proposes to delay tax-break incentives until the money in DAFs is paid out.
Theoretically, this measure could help urge donors to use the funds in their DAFs at a faster rate. However, said FAR Director Emily Koons Jae in an article for Philanthropy Daily, “We need better data before concluding that a time limit is the best strategy to motivate giving from DAFs. Increased regulation might spur better research on DAFs, but it is unlikely that the benefit of this approach would outweigh the cost of implementation.”
Watch to see if the ACE Act makes it out of the Senate Finance Committee. Ms. Jae predicts, “Over the next few years, I believe we will see more sophisticated fundraising pitches targeted at DAF donors.”
We look forward to what 2022 brings for higher education giving. If FAR can help you with your gift, please contact ejae@AcademicRenewal.org or call at (202) 467-6787.
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