Issue Brief

Charitable gifts are a critically important source of revenue to universities. These gifts are sometimes used to fund current operations through annual giving campaigns. Many charitable gifts are made specifically to an institution's endowment to support specific purposes and activities - such as student scholarships or medical research - both in the present and for many years to come.

Learn about why tax-exempt financing is critical for universities to advance their mission of educating and innovating for the public good.

The Lifetime Learning Credit (LLC) is one of two income tax credits to help offset the costs of higher education.

The American Opportunity Tax Credit (AOTC) is a partially-refundable tax credit up to $2,500 that helps students cover tuition and college expenses.

 

What Is the American Opportunity Tax Credit?

The vast majority of public and private universities and colleges are tax-exempt entities as defined by IRC Section 501(c)(3) because of their educational purposes—purposes that the federal government has long recognized as fundamental to fostering the productive and civic capacity of its citizens—and/or the fact that they are state governmental entities.

Unrelated business taxable income (UBIT) is income from a trade or business that is regularly carried on by a tax-exempt organization and is not substantially related to the organization's exempt purpose.

This is the AAU summary of the H.R. 2471, Consolidated Appropriations Act, 2022, which will fund the federal government until the end of the fiscal year, ending September 30, 2022.

AAU calls for an infusion of at least $6 billion for federal research agency programs that support scientific infrastructure at colleges and universities.

A robust humanities education is critical to cultivating a broadly-educated workforce ready to compete in the knowledge-based, global 21st Century economy. From the basic building blocks of early education, to the highest levels of academic attainment, humanities fields provide individuals from all disciplines, including science, technology, engineering, & mathematics (STEM), with critical thinking, problem-solving, communi-cation, and analytical skills, competencies, and the expertise needed to fill public, private, and non-profit sector jobs. AAU urges Congress to contin-ue the long-standing practice of funding NEH at the same level as the National Endowment for the Arts.

The Department of Education’s Title VI (domestic) and Fulbright-Hays (overseas) programs are the federal government’s most comprehensive programs for developing national capacity in foreign language and area studies expertise. These programs support instruction in less-commonly taught languages—particularly from regions of U.S. strategic interest—and research on cultural issues important to economic and national security. These programs educate individuals whose skills help ensure the successful international engagement of the U.S. education, government, and business sectors.