House Weighs Taxing of Gifts To Institutions

Nearly half of University funding is imperiled this spring by the possibility of U.S. House of Representatives legislation regarding the taxing of currently tax-exempt gifts to nonprofit institutions.

Robin Schmidt, assistant vice president for Public Affairs, termed as "just devastating" the prospect, now being discussed in the House Ways and Means Committee, of taxation of private financial donations and of the appreciation on securities given to the University.

The House Committee, chaired by Wilbur D. Mills (D-Ark.), is now hearing public testimony on these and other tax reforms. It will consider drafting a bill after April 19.

Hale Champion, financial vice president, yesterday estimated the value of such gifts which comprise the endowment to represent 40 to 45 per cent of University funding.

No Position Yet

Eugene Goss, legislative assistant to Mills, told The Crimson yesterday, "He [Mills] has not taken any position yet."

president for Government and Community Affairs, said yesterday that he was "absolutely certain" that such legislation will be included in a tax reform bill.

Meanwhile, Champion held that the taxation of appreciations on securities and properties given the University would threaten funding most.

Federal policy, reaffirmed by Congress in 1938, allows a donor to deduct from his taxable income the value of appreciation on a security given to a nonprofit institution.

Champion said also that the absence of taxation on monetary donations is an incentive to alumni-especially wealthier ones--to donate parts of their savings.

"The guy in that high income bracket tends to gain the most from this tax loophole," Schmidt agreed.

Independent sources have placed the sum of donations of $5000 or more at comprising over 75 per cent of funding for private universities.

"Our great concern is that there will be great experimentation before the tax system, to replace the current one, is worked out," Schmidt added.

Double-Barrelled Attack

"It's a double-barrelled attack now, of cuts in federal funds through HEW, and of private giving," he said.

Champion estimated government funding at 30 to 35 per cent of University resources