{"id":4378,"date":"2016-05-25T03:54:00","date_gmt":"2016-05-25T03:54:00","guid":{"rendered":"https:\/\/oafdn.ca\/?p=4378"},"modified":"2022-02-12T03:55:40","modified_gmt":"2022-02-12T03:55:40","slug":"taxing-endowment","status":"publish","type":"post","link":"https:\/\/oafdn.ca\/fr\/taxing-endowment\/","title":{"rendered":"Taxing Endowment ?"},"content":{"rendered":"<div data-elementor-type=\"wp-post\" data-elementor-id=\"4378\" class=\"elementor elementor-4378\" wpc-filter-elementor-widget=\"1\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-b6a579b elementor-section-boxed elementor-section-height-default elementor-section-height-default\" data-id=\"b6a579b\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-33695ac\" data-id=\"33695ac\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-c0197c8 elementor-widget elementor-widget-text-editor\" data-id=\"c0197c8\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><img fetchpriority=\"high\" decoding=\"async\" class=\"size-medium wp-image-4379 alignleft\" src=\"https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/tax-300x300.jpg\" alt=\"Huge tax text on man's shoulder\" width=\"300\" height=\"300\" srcset=\"https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/tax-300x300.jpg 300w, https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/tax-150x150.jpg 150w, https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/tax-12x12.jpg 12w, https:\/\/oafdn.ca\/wp-content\/uploads\/2022\/02\/tax.jpg 700w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p><p><span class=\"plain_grey\">To our minds,\u00a0 taxing endowment is very short term thinking.\u00a0 Lately, US media and politicians have called for taxation of the larger endowment funds. As lawmakers look for sources of funds amid declining tax base at the local level, along with rising tuition costs, the presence of large, successful and growing university endowment funds have become an enticing target.<\/span><\/p><p><span class=\"plain_grey\">Most endowments, including the Ontario Arts Foundation\u2019s, saw the market values of funds under their stewardship decline during the 2008 economic crisis.\u00a0 Legislators and the media seem to have forgotten the impact.\u00a0 Endowment distributions dropped or in many cases, had to be suspended for a year. Since that time, a combination of improving security markets over the last 5 years, sound investment management and new donations have seen the aggregate value of funds held in endowments grow significantly. Lawmakers in states where the large universities are located ( Harvard, Yale, Princeton ) are making statements that the school endowments should be \u2018forced\u2019 to make mandatory payouts to reduce education\/tuition costs or help offset deficits in education budgets.<\/span><\/p><p>\u00a0<\/p><p><span class=\"plain_grey\">Not surprisingly, we are not supporters of this for several reasons:<\/span><\/p><ul><li><p><span class=\"plain_grey\">Recent history of a time when the market value of endowments declined below the original principal, resulted in an inability to make the annual distributions that the arts organizations we support rely upon. Our investment strategy looks to mitigate that risk by growing the capital and maintaining a reserve to ensure we are able year over year, to make distributions. But no Board or investment manager has control over global markets.<\/span><\/p><\/li><li><p><span class=\"plain_grey\">Taxing investment profits, or challenging tax exempt status of endowments will mean that donors intending to provide long term support to an organization may use other vehicles, or not make the gift. One of the advantages of an endowment is the pooling of multiple funds to lower investment costs. Taxing an endowment and driving donors elsewhere may increase costs, which impacts the amount available for distribution.<\/span><\/p><\/li><li><p><span class=\"plain_grey\">What is forgotten in the dialogue is that many individual endowments, collectively managed by the foundation, or a university have very specific purposes (i.e. fund an arts award). The governing organization does not have the ability to re-direct the capital or income to the purposes external bodies are suggesting.<\/span><\/p><\/li><li><p><span class=\"plain_grey\">Endowments are an attractive tool for generating sources of income that are separate from government funding, operations\/arts programming. The stability of returns is an important part of an organization\u2019s finance\u2019s.<\/span><\/p><\/li><\/ul><p><span class=\"plain_grey\">Taxing an endowment may be attractive to the media or a politician, but it truly is short term thinking at its worst.<\/span><\/p><p><a title=\"\" href=\"http:\/\/www.wsj.com\/articles\/taxing-yales-endowment-1459207233\">Wall Street Journal article March 28, 2016<\/a><\/p><p><a title=\"\" href=\"http:\/\/www.bloomberg.com\/news\/articles\/2016-03-23\/yale-endowment-tax-proposal-eyed-by-cash-strapped-connecticut\">Bloomberg article March 23, 2016<\/a><\/p><p><a title=\"\" href=\"http:\/\/www.forbes.com\/sites\/beltway\/2015\/08\/25\/should-college-endowments-be-taxed\/#151dc2e62459\">Forbes\u00a0article August 25, 2015<\/a><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"<p>To our minds,\u00a0 taxing endowment is very short term thinking.\u00a0 Lately, US media and politicians have called for taxation of the larger endowment funds. As lawmakers look for sources of funds amid declining tax base at the local level, along with rising tuition costs, the presence of large, successful and growing university endowment funds have [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4379,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"give_campaign_id":0,"nf_dc_page":"","site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[16],"tags":[],"class_list":["post-4378","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"_links":{"self":[{"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/posts\/4378","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/comments?post=4378"}],"version-history":[{"count":0,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/posts\/4378\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/media\/4379"}],"wp:attachment":[{"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/media?parent=4378"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/categories?post=4378"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/oafdn.ca\/fr\/wp-json\/wp\/v2\/tags?post=4378"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}