Proposed legislation could increase donations to universities by millions
February 11, 2002
President Bush announced on Feb. 7 that he supports Senate legislation that would give tax breaks to people who donate money to colleges and other nonprofit groups. The proposed legislation would allow people 67 and older to take money from Individual Retirement Accounts and donate it to charity without paying taxes.
Another provision of the legislation would allow people who do not itemize on their tax returns to deduct charitable donations-up to $400 a year for individuals, $800 for couples filing jointly.
Still other provisions would encourage businesses to donate more money to colleges and other nonprofit groups, whether by increasing the ceiling of percent of taxable income that can be donated without a tax penalty or by lowering the excise tax that private foundations must pay on their net investment income.
The House of Representatives passed similar legislation last July.
"We'd be thrilled if this legislation becomes law," says Roy Gregory, Austin Peay's executive director of university advancement. "It certainly would help in fund-raising for Austin Peay, especially in terms of the tax benefits to retired people who want to contribute to the University."
Typically, Gregory explains, when people withdraw funds from an IRA, they pay taxes. Under the new legislation, that would no longer be the case.