Core Viewpoint - Wealthy private foundations in the U.S. are informally uniting to protect their tax-exempt status amid threats from the Trump administration to revoke it [1][2]. Group 1: Foundation Responses - Major foundations, including the Ford Foundation and Gates Foundation, are discussing potential responses to government attempts to challenge their tax-exempt status [1]. - Some foundations are considering seeking collective or individual legal representation if their tax-exempt status is threatened [1][2]. - John Palfrey, president of the MacArthur Foundation, emphasized that any government efforts to revoke tax-exempt status based on foundation activities would be met with strong legal opposition [2]. Group 2: Government Actions and Concerns - The Trump administration is exploring broader challenges to the tax-exempt status of non-profit organizations, including threats to revoke the status of institutions like Harvard University [1][2]. - A recent executive order from Trump directed federal agencies to identify potential investigations into large non-profits, raising concerns among charitable organizations [2][4]. - Foundations are worried about potential increases in the excise tax on their investment income and changes to spending requirements [3][4]. Group 3: Financial Impact - Revoking tax-exempt status could significantly reduce the funding available for various charitable causes, as many foundations rely on tax incentives to motivate donations [1][4]. - In 2023, foundations donated over $100 billion to U.S. charities, making them the second-largest source of funding after individual donors [4]. Group 4: Industry Collaboration - Discussions among foundations are being facilitated by the Council on Foundations, which emphasizes the importance of independent operation for these organizations [5]. - Some foundations are seeking individual legal representation while others may opt for a united front against government actions [5].

Core Viewpoint - The Republican Party is considering increasing the tax rate on university endowment funds from the current 1.4% to between 14% and 21%, depending on the size of the endowment, as part of a broader attack on elite universities and their perceived liberal agendas [1][2]. Group 1: Tax Policy Changes - The proposed tax rate increase aims to ensure that universities allocate more funds to student needs rather than initiatives opposed by conservatives, such as DEI programs [1]. - Raising the tax rate to 14% could generate $10 billion in revenue for the federal government over the next decade [1]. - The current tax on university endowments was first implemented in 2017, and in 2023, it generated $380 million from 56 universities [2]. Group 2: Financial Impact on Universities - Wealthy universities typically withdraw about 5% of their endowment returns for scholarships and operational costs, making these funds crucial for their financial stability [2]. - For smaller institutions like Davidson College, even a modest tax increase could raise their annual tax burden significantly, impacting their ability to provide scholarships [2]. - Middlebury College in Vermont anticipates that the proposed tax increase could raise its tax bill from $1 million to $1.2 million, contributing to financial uncertainty [3]. Group 3: Broader Implications - The potential tax policy changes could signal a shift in broader tax policies under a potential Trump administration, affecting not only university endowments but also the financial landscape for higher education [3].