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How One University is Dealing with the Tax Reform in Its Own Unique Way

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The University of Miami’s Hurricane Club is confident in their preparedness.

A look at the new Carol Soffer Indoor Practice Facility that Marks and his team raised over $34 million to complete. (Image via @Give2UM)

Although there has been much chatter around whether or not UCF should have been in the College Football Playoff, nothing has dominated the conversation around college sports like the Republican tax reform bill and its impact on seating donations.

Under the former law, contributors who itemized tax deductions when they filed could claim up to 80 percent of those donations as a deductible contribution to charity.

Now, the new tax bill will repeal that deduction beginning with the contributions made after January 1, 2018.

There is no doubt that this will change the way that athletic departments operate. However, with the right adjustments, Jesse Marks, Sr. Associate Athletics Director for Development at the University of Miami, sees new opportunities to further their philanthropic mission and make it more efficient to identify new donors.

“Over the course of the last three-four years, we have gradually been understanding that there is a portion of our fan base who are supporting the University by purchasing season tickets, but may not have an interest in giving above their tickets in the form of philanthropic gifts.”

While it may seem beneficial to have everyone give some type of donation, Marks sees the seating donation as something that checks a box instead of fulfilling a philanthropic desire of a donor.

“With the new tax code in effect, we have preserved the traditional annual fund model in giving levels for those who are making philanthropic gifts. Still to be determined is how we will account for the revenue dollars tied to season seating donations. For that, we have a couple options, ranging from non-tax deductible gifts to direct ticket revenue. Either way, our goal will be to drive philanthropic donations to our newly structured non-seating related annual fund.”

The plan behind the shift is to make sure they have the ability to incentivize philanthropic annual gifts versus strictly transactional gifts, which have been tied to seating donations.

“If you want to make an annual fund gift, we are going to recognize your gift with unique benefits and experiences that are not ticket related but are philanthropic in nature and buy into our mission of supporting student-athletes,” said Marks.

Even though seating donations played an integral role in the past for collegiate athletic fundraising departments, feedback from constituents have indicated to Marks that most people will support the program through the purchase season tickets regardless of any tax benefits.

“I can tell you, based on the feedback I have received, that the tax impact across the majority of our donor base is minimal, we believe our constituents are going to buy their tickets regardless of having a tax-incentive.” — Jesse Marks, Sr. Associate Athletics Director for Development at the University of Miami

“As an athletic fundraising unit we are going to become more service-oriented to those who are contributing at any level philanthropically. No longer are you stewarding the largest pool of people anymore, whose gifts were tied directly to the purchase of seats. We will be focused on building a programmatic annual fund that emphasizes philanthropic giving and growing that pipeline relentlessly”.

Not only will his staff be able to focus more on people who give philanthropically, but they also will able to continue refining their stewardship and solicitation communications.

“It lets us focus on our messaging and hit more of a target audience instead of forcing the message to people who don’t necessarily want to hear it and would rather just donate the minimum cost to get season tickets,” said Marks. “We are going to be speaking to more people who believe in the mission of Hurricane Athletics as a viable philanthropic option.”

An example of the new communications used by the athletic development office. (Image via Jesse Marks)

With the transition away from seating donations, Marks and his staff recognize the importance of a cohesive development and sales team to the long-term success of the department.

“In collegiate athletics, our best pool of donors has come from our season ticket holders, and that is not going to change. Season tickets are the entry point for so many of our leadership donors. Our sales and annual fund team will bring in prospects and as we get to know them, we are going to get a pretty good idea of their propensity to support us in philanthropic ways. It is our job to get out there, do our research and articulate a mission of support through our annual fund and capital campaigns, which will remain tax-deductible under the new code.”

Tax reform is not a new subject and getting rid of the deductions associated to seats has been a hot-button topic for years. Now that there is a bite behind the bark, athletic departments across the country will have to find unique and creative ways to delivering giving numbers that will keep the lights on.


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