The new budget President Obama sent to Congress this week calls for an end to tax deductions for donations made to college athletic departments for season tickets or preferential seating, also known as seat-related contributions. Currently, 80 percent of these donations are tax deductible.

The administration claims people would pay an additional $2.5 billion in taxes over the next decade with this change.

No doubt, college athletics administrators will watch this development closely. Donations are the highest source of revenue in virtually every athletic department. Yes, even higher than those television contracts you hear so much about.

Here is a random sampling of schools throughout FBS to give you an idea of the revenue they generate from donations compared to their total distribution from their conference (television contract, championships, etc.) and the NCAA (March Madness):

School Donations NCAA + Conference Distribution
Alabama $34,233,035 $23,855,929
Louisville $28,935,662 $15,349,134
Michigan $31,285,461 $27,845,239
Texas $37,386,271 $21,740,373
Western Kentucky $3,379,547 $1,634,776
Utah State $2,962,548 $1,888,296
Central Florida $5,088,098 $3,333,291

Source: Reports filed by schools with the NCAA for the 2012-2013 school year

The numbers above include all contributions reported for the year, not just donations made as required for season tickets or preferential seating. However, those seat-related donations account for the majority of donations on a year-to-year basis according to the development folks I’ve interviewed.

Would fans still donate if they no longer received that 80 percent tax deduction? One athletic director told me for my book Saturday Millionaires a couple of years ago that he thought donations would drop by as much as half without the deduction.

Would fans really be willing to give up their seats and all the years of points they’ve built up if they weren’t getting the tax deduction? I’m sure there would be some at the lower end of the scale who might not see it as such a good investment anymore, but I’m not wholly convinced it would have a major impact on giving. I’d love to hear from those of you working in development in the comments section!

As a side note, Obama’s budget plan also calls for an end to the use of tax-exempt bonds to build facilities for professional sports teams. The plan states debt to finance those facilities would be taxable if 10 percent or more of the facility is used for a private business (i.e., a professional sports team). Implementation is projected to be worth $542 million in tax revenue over ten years.

http://businessofcollegesports.com/2015/...athletics/

TIL that that these sort of gifts/donations were tax deductible.

(02-05-2015 07:58 PM)RiceLad15 Wrote:  TIL that that these sort of gifts/donations were tax deductible.

If you look at the recently-released pricing chart for 2015 football season tickets, you'll see that, for the most expensive seats, there are words to the effect that the price includes an Owl Club donation of x. That amount x is the tax deductible amount on which the evil one-percenters aren't paying their fair share.

His budgets didn't pass when he had full control of both Houses, I don't expect they will start now.

Keep donating and keep deducting as appropriate.

Doesn't he realize these donations support scholarships, i.e., free college, of which he apparently is in favor?

I do not expect the part about college giving plans to pass Congress, but they may think about the part about financing pro stadiums.

100% behind our president on this one.

(02-05-2015 09:48 PM)75src Wrote:  I do not expect the part about college giving plans to pass Congress, but they may think about the part about financing pro stadiums.

Public financing of pro stadiums is awful and should go out of style. The idea that they actually end up regaining the investment, or even producing some return on the investment has been proven false through the years.

(02-05-2015 08:49 PM)Frizzy Owl Wrote:  

(02-05-2015 07:58 PM)RiceLad15 Wrote:  TIL that that these sort of gifts/donations were tax deductible.

If you look at the recently-released pricing chart for 2015 football season tickets, you'll see that, for the most expensive seats, there are words to the effect that the price includes an Owl Club donation of x. That amount x is the tax deductible amount on which the evil one-percenters aren't paying their fair share.

We could use some more one percenters in our alumni base, evil or otherwise.

(02-05-2015 10:32 PM)InterestedX Wrote:  100% behind our president on this one.

Me too. With all the things we are cutting or not funding, subsidizing college athletics isn't too high on my list. Subsidizing the NFL even less so.

But as people have already said, there won't be many major changes to anything the next couple years.

I'm with the president on this one too.

Sports benefit from much subsidization and non-profit status in this country.
Forbes column on tax deductions/exemptions in college sports

Is it just a matter of which subsidies y'all like and which you don't?

because every tax deduction and/or income treatment subsidies somebody in some way. Should union dues be deductible? How about teacher supplies. Fishing nets? Gifts to charities?

We have created this monster called our tax code. Maybe instead of minor cosmetic changes to a deeply flawed system, we should just adopt a new way of raising money for the government. I like the Fair Tax, in general.

As for working within the system we have, I will be glad to pass on the tiny little tax savings for my minimal donation. What about the guys we want to fund stadia and other major facilities? Will the TCU model work if tax breaks cannot be offered to big donors?

(02-06-2015 02:32 PM)OptimisticOwl Wrote:  We have created this monster called our tax code.

Exactly. Repealing a tax exemption is nearly impossible, unless you perhaps try to get rid of nearly all of them at once. The only circumstance in which I can see that being done is if, for example, a Republican wins the White House in 2016 but the Democrats take control of both houses of Congress. Then the existing lame ducks could pass something useful in December 2016.

Oh darn, I've wandered into the Quad, haven't I?

Is it just a matter of which subsidies y'all like and which you don't?

Yep

tell me how many schools' athletic programs are in the black year in and out ? By taxing donations what you're doing is cutting out scholarship opportunities to underprivileged kids (programs will have to cut back if donations dry up), and promotional/advertisement opportunities on behalf of the university, which would not be commercially feasible if they had to dig into the operating budget to pay for it.

Donations are deduction driven.

If you're donating for the deduction, you really aren't being charitable. You're just doing it to get some financial benefit. There shouldn't be any charitable deductions from taxes.

(02-06-2015 09:18 PM)InterestedX Wrote:  If you're donating for the deduction, you really aren't being charitable. You're just doing it to get some financial benefit. There shouldn't be any charitable deductions from taxes.

sometimes, the deduction can be the selling point that triggers a decision. more often though, it influences level of giving. people who are now $1000 Owl Club members may decide to drop to the $500 level.

still no amswer on whether it is subsidies that bother you, or just this subsidy. How do you feel about the deductibility of contributions to Muscular Dystrophy, or the March of Dimes, or to the general fund of a university? How about the deductions for mortgage interest, or investment advice, or ....well, all of the ones on the Form A.

(02-06-2015 09:57 PM)OptimisticOwl Wrote:  

(02-06-2015 09:18 PM)InterestedX Wrote:  If you're donating for the deduction, you really aren't being charitable. You're just doing it to get some financial benefit. There shouldn't be any charitable deductions from taxes.

sometimes, the deduction can be the selling point that triggers a decision. more often though, it influences level of giving. people who are now $1000 Owl Club members may decide to drop to the $500 level.

still no amswer on whether it is subsidies that bother you, or just this subsidy. How do you feel about the deductibility of contributions to Muscular Dystrophy, or the March of Dimes, or to the general fund of a university? How about the deductions for mortgage interest, or investment advice, or ....well, all of the ones on the Form A.

"still no answer...?" JSA's response was pretty clear.

Anyway, this is a subsidy I don't like. I don't see the benefit to society of subsidizing the entertainment of UT and Bama supporters. I mean, if you do see value in this subsidy, at most make it a flat dollar amount per school, rather then the perversion that is the extremely profitable athletics programs getting the biggest subsidies thanks to their "nonprofit" status.

I think my answer was crystal clear.

(02-06-2015 11:01 PM)InterestedX Wrote:  I think my answer was crystal clear.

if you are referring only to charitable deductions, yes it was. what isn't clear is how you feel about other things subsidized by tax deductions.

Wouldn't bother me a bit if they also removed the mortgage deduction.