Membership Dues Tax Deductibility

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Membership Dues Tax Deductibility
IU Alumni Association

• December 5, 2008

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Membership Dues Tax DeductibilityGraduate
Accounting Program
IU Alumni Association

• Leiden Dworak
• Brad Beigle
• Stephanie Agustina
• Dale Pretila

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IU Alumni Association

• Agenda
• Scope of Investigation
• Recommendations
• Issues Analyses
• Tax Deductibility
• Political
• Marketing
• Accounting
• Benefits and Risks
• Conclusion

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IU Alumni Association

• Scope of Investigation
• 3 Membership Models
• Traditional
• Tax Deductible
• University of Illinois
• Other Relevant Issues
• Current Situation
• Model Organizational Relationships

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IU Alumni Association

• Recommendations
• Implement
• Tax Deductible Model 100
• Collaborate
• Grant IUF Managing Responsibility
• Reposition Program
• Target All Students
• Customize program for all eight campuses
• Check the Box at OneStart
• Current Life Solicitation

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IU Alumni Association

• Tax Issues Solutions
• Current IRS Guidelines
• gt Benefit Received
• Maximum De Minimis Value (11)
• Measuring Tangible Benefit
• Global Alumni Network
• Staying Connected (Alumni Magazine)
• Student Scholarships
• Alumni Programs Services
• International Outreach
• Receive an Opinion Letter

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IU Alumni Association

• Tax Issues Solutions

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IU Alumni Association

• Tax Solutions Life Members
• Endowment Model
• Quasi Endowment Model
• Donors do not restrict how funds are used
• Indiana University Foundation (IUF)
• Currently handle all IU donations
• Manage over 1 billion in assets
• Have tax deductible processes already

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IU Alumni Association

• Political
• Issues
• IUF
• Possible donor confusion cannibalization
• Solutions
• Coordinated marketing promotions
• Improves IU US News World Report Rankings
• Attracts additional donors

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IU Alumni Association

• Marketing
• Issues
• Increasing donations student exposure
• Solutions
• Promoting tax deductibility (IUConnect!)
• Year-end marketing campaign targeting current
  life members
• Access granted to students emails
• Student Alumni Associations portable ID
  scanners
• Locations High traffic areas (all IU campuses)
• Check the box in OneStart

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IU Alumni Association

• Accounting
• Issues
• Liability
• Is there an obligation to life members?
• Solution
• Endowment Model
• If bankrupt, no obligation to members

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IU Alumni Association

• Benefits
• Increased membership
• 13 Initially
• 5 Annually
• Increased revenue from memberships
• Increased return on assets - IUF
• Lower operating costs - IUF
• Increased operating profit
• Liability removal
• Accounting issues

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IU Alumni Association

• Risks
• Incorrect estimation of tangible benefits
• IRS Publication 926
• Valuation consultants
• IUF manages endowment funds

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IU Alumni Association

• Timeline

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IU Alumni Association

• Conclusion
• Problem Uncertainty Exists
• Member donations linked to economy
• IUAA needs a plan to secure membership
• Solutions
• Tax Deductible Memberships
• New marketing tool to increase membership and
  revenue
• Endowment model
• To increase return on assets and improve
  operating costs
• Increased student exposure
• Sustainable hedge for the future

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IU Alumni Association

• Questions?