IUF President Dan Smith’s Statement Regarding 11/8/17 New York Times Article

The mission of the Indiana University Foundation (IUF) is to maximize the philanthropic financial resources available to Indiana University to support university priorities such as student scholarships, academic programs, and faculty research.

We invest the gifts we receive from donors in ways that will provide maximum financial returns given a prudent level of risk. At IUF, all the money in the endowment is comprised of funds for donor-designated purposes, and does not include state appropriations or student tuition.

Just as income earned by individuals is taxed, some types of investment income earned by endowments may also be subjected to taxation. This reduces the spendable income we can provide for important priorities such as scholarships. Individuals attempt to invest in a tax efficient manner—blocker corporations are one vehicle to help endowments and foundations achieve similar tax efficiency.

Cambridge Associates, IUF’s nationally recognized investment advisory partner, says the use of blocker corporations is a common and nearly universal practice among institutional investors. They also stressed the fact that any tax savings from these structures are typically minor compared to the benefit of the reduced administrative burdens for investors.

While strategies and techniques of investing are important, the true value is the impact these investment returns have in supporting our students and in enabling our faculty and researchers to focus on their life-improving work.

Please direct questions to IUF Director of Strategic Communications, Matt Kavgian at mkavgian@iu.edu.