Really interesting article in the Register today about a donation policy up at UNI that blew up. Basically the Universtiy sold to donors that they could get a life insurance policy in return for their donations to the athletic department. It appears they were told their donations would accumulate as a cash balance and they'd also get the insurance benefit.
The catch is the IRS changed the rules on this ten years ago and basically you can't do that anymore. The donations are supposed to be just what they are donations. Donors are losing percieved cash balances and the University and donors may end up paying back taxes.
Not sure why nobody caught this earlier both on the University and Insurance company's part, but what a mess. Some donors are really upset.
I can understand a donor being upset if they were told one thing and another happened. Still it seems just a bit petty to me to ask for your money back when it was supposed to be a gift in the first place. It's one of those deals that was just too good to be true.
ISU has had it's own problems with alumini donations in the past, so am not being high handed here. Just glad to see we aren't the only ones who make mistakes.
Last edited by Bobber; 08-23-2009 at 11:45 AM.
Re: Athletic Donations
I posted this over at PN, but I'll post it here too.
Outside of the tax issue, which it's debatable who should have known what, but the the whole ROC program was forcing UNI out of the program. They wouldn't add new members, and thus forcing UNI to drop below a previous standard of so many number of members or amount of $$$. So, if UNI had to have 100 members, and they weren't allowed to drop below that number, but the insurance company was refusing new members, it puts UNI in a position to fail. The individuals who were a part of the ROC program were eventually going to get fewer and drop below the minimum number. It seems to me that what UNI was trying to do was to have the company keep it's side of the bargain, but not only was the insurance company beginning to not accept new members, but they were also jacking up the premiums.
Sounds like a big ordeal and, IMO, it seems like a large amount of the blame goes on the insurance company. As for the tax issue, that's debatable as I said before.
Des Moines Register: UNI Donors Lose Out on Insurance Benefits - Panther Nation