COVID-19 Tax Relief and a Chance for Redemption
Recently, the once-stellar reputation of charitable organizations was getting a bit tarnished. As the press reported various scandals and investigations of endowed organizations, endowments were sometimes characterized as money hoards that provided little social benefit. Only a few years ago, the heightened scrutiny of educational institutions culminated with Congress imposing a 1.4% endowment excise tax.
Now the COVID-19 crisis has vividly shown the important roles hospitals, research centers and other charitable institutions play as a means of social protection. Also, the benefits arising from an ability to fall back on an endowment are clear. This led Congress to provide some support for nonprofits in the CARES Act, which relaxes some restrictions on deductions. This relief—and more—is sorely needed, reports Institutional Investor, in an article that describes how revenue losses are creating “economic pressures [for educational organizations] far beyond the market losses seen in 2008’s financial crisis.”
Johns Hopkins, Emory University, Rice University and the University of Chicago—among many others— areworking to advance research to battle COVID-19 and serving their local communities. Now is the time to underscore that any erosion in the perceived value of higher education and science has been sorely misplaced and, more generally, that America’s charities make irreplaceable contributions to the fabric of our society.