Endowments are collections of donated funds that are managed to provide permanent support for nonprofit universities' educational, scientific, and charitable missions -- namely, teaching students, performing research, and addressing problems affecting communities, states, and the nation.
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.
Employer-provided educational assistance benefits (Section 127) allows employers to offer their employees up to $5,250 annually in tax-free educational assistance for undergraduate or graduate-level courses.
Charitable gifts are a critically important source of revenue to universities.
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 one of two income tax credits to help offset the costs of higher education.
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.
The Qualified Tuition Reduction, section 117 (d) of the Internal Revenue Code, allows nonprofit universities to give their employees, spouses, or dependents tuition reductions that are excluded from taxable income.
Learn more about the student loan interest deduction (SLID) and why it's important.