All right, right. And if you want to go ahead and get started, you can get going. Great. Thanks, Christie. Hello, everybody. I hope you're doing well on this Friday. Greetings from Washington, DC, where it is the afternoon but good morning to those of you on the West Coast, or. Good morning. Good afternoon. Good evening. For those of you in other parts of the world. It's great to be with you. I'm happy to share kind of the latest news and updates we have from what's happening here in Washington. For those of you I don't know, Brian Flavin, Vice President Strategic Partnerships at CASE. I oversee all of our global advocacy for CASE, which includes a lot of the work that we're doing here in Washington, DC around working with Congress, the agencies and the administration. So happy to kind of walk through the latest of what we're hearing, share with you kind of updates on timing, some of the issues that probably everybody's been following in the news and how that impacts what's happening here in the Beltway. And then also, I want to save a good amount of time for your questions. And that's for a couple of announcements before I jump right into the content. One is just a reminder that we're going to be recording this. And the recording is really so that we can share it back out with all of you who've registered. So just a heads up that we'll be pushing that button shortly. The second piece of it is, if you have questions as we are going through this or as I go through the particular topics and content, feel free to post those in the Q&A tab. So make sure you put them in the Q&A tab. The chat tab is really a place where you can have conversations. But if you have questions for me, when we get to the question and answer part of the session, please put them in Q&A. And as I said, I'm going to try to leave a good amount of time so I can take your questions because I'm really eager to hear what questions you have, where we can be helpful and answer as many of them as we can in the 60 minutes that we have together. So again, welcome. Thank you for joining. And we're going to jump right in. Let me just share my screen. So we're going to go through a little bit of a PowerPoint here and walk you through kind of what we're hearing and what's happening. I want to start just by reminding you of the political landscape and the lay of the land here in Washington around, you know, what's happening and who's governing and who's making decisions. Probably not a lot of surprise to everybody that right now, this is a Republican-controlled Congress and a Republican White House, which means Republicans have a significant influence in terms of policy and activity in Washington, starting, of course, with President Trump, the Trump administration and the executive actions that can be taken from the president. But also up on Capitol Hill, you have Republican majorities in the House and the Senate. So in the Senate, it's a 53-47 Republican majority, which really means so they have a really, Republicans have a three-seat majority. But if you think about it, they kind of have a four-seat majority because if they lose three votes on something and it's a tie 50-50, then Vice President Vance would break the tie and likely on the Republican side. So it really is, if you think about it, in effect, a four-seat margin in the Senate. On the House side, a very, very tight margin for historic purposes in the House, 220 to 215, actually is tighter than it was the last Congress. Republicans still have the majority, but it certainly is a very, very, very slim majority. And it's really impacted how Republicans on Capitol Hill have approached their agenda this year in conjunction with the administration and how they're approaching some of the big ticket items that they're trying to tackle. And I'm going to talk about that in a bit. Obviously, with the White House, with President Trump back in the White House, there's been a real focus on executive action versus legislative action. Why is that? Well, if you look at those margins on Capitol Hill, it's hard to get anything through Congress. It's certainly hard to get big pieces of legislation. A lot of the things that the administration would like to do would struggle to get through even a Republican Congress. And if you've been watching the Republican House of Representatives in particular over the past couple of years, given the tight margins, even when they've been in the majority, it's been hard for leadership to get things over the finish line. So President Trump and the administration have seen executive action as the way to go. And that's where they've done a lot of their policy work. And there are things they have to do legislatively, of course. And they're certainly going to get challenges for some of the executive actions that they've taken. And those might get put down by the courts and they'll have to seek congressional approval for some of those that work. But in the short term, they are certainly pursuing an executive action agenda versus a legislative action agenda as they start out the year. So where are we on Capitol Hill? So right now we are in the midst of the spring district work period or spring recess. So Congress is out this week. It's out next week as well. So they'll be back the 28th of April. What were they doing before they left? Well, they were putting the finishing touches on a pretty contentious debate around a budget resolution. The budget resolution is just a framework document. It's actually something that isn't passed into law. It has to be approved by both the House and the Senate, the same budget resolution, in order to take effect. But why were they spending so much time on it? If it's not signed by the president, it's not in law, it only just provides numbers, it doesn't bind anything. The reason is that you have to have a budget resolution passed in order to use something called tax reconciliation or to have a reconciliation bill process. So you need to have a budget resolution in place that includes instructions for reconciliation. And the reason that Republicans are looking at reconciliation is particularly for the tax bill, which we're going to talk quite a bit about in a second. They want to pass that with all Republican votes. They want it to be a bill that is shaped by the administration and by Republicans on Capitol Hill. And the reality is between the two parties, from a tax policy perspective, and frankly on a lot of different policies, there's a huge partisan divide between what are the priorities of Republicans and Democrats. So what reconciliation allows you to do if you follow certain rules, it allows you to get something passed through Congress without needing 60 votes in the Senate. So if you remember, there's a 53-47 Republican majority in the Senate, but really to pass anything through regular order in the Senate, you need 60 votes to overcome what's known as a filibuster. So in order to proceed to a final vote on a bill, you need 60 votes, which means you need seven Democrats to join with all Republicans in order to move legislation forward. As you can imagine, with something like the tax bill and with the disagreements about tax policy and what priorities Republicans would have versus Democrats, Republicans would much rather pass a bill that is a Republican bill and do that with their majority. So if they can use reconciliation, if they pass the budget resolution, they can use reconciliation, they can pass those with just a majority in the House and a majority in the Senate, which makes it much, much easier. Not saying it's easy, makes it much easier than having to find seven Democratic senators, of course, to support it as well. So the budget resolution passed, which means that now, while Congress is on break, a lot of the committee staff and Republican leadership staff on the House side, and we expect the reconciliation process to start on the House side, are busy behind the scenes preparing for markups, putting draft legislative language together, starting to do the work of putting this, what the President has called the big beautiful bill together that will include taxes, defense, energy, policy issues, all together into one. So that when Republicans are back on April 28th, they can start the markup process, start working through the different pieces of the reconciliation instructions and ultimately try to pass a bill. Their goal, Speaker Mike Johnson, a Republican from Louisiana who is the House Speaker, his goal is to have this bill through by the end of May. I think most people in town here think that is very, very, very ambitious, given all of the things and the issues and the complications they have to work through. But if they want to get close to meeting that timeline and to move things quickly, they're going to have to start the markup process when they get back from recess. So they're certainly preparing for that. So that's what's happening, excuse me, on Capitol Hill, and kind of where we are in terms of the legislative and congressional agenda that's happening on Capitol Hill. Turning to the administration, because I want to talk about that for a second, pause for one moment. For the administration and the Trump administration, it's really been, as I started this presentation, focused on executive action and the things that the administration can take on by itself. This is actually a picture from the executive order signature signing ceremony that happened along with, you can see President Trump along with Education Secretary Linda McMahon joining together to sign the executive order that was really meant to bring a lot of the focus on education as they would put it back to the states and local communities. Inevitably, what the executive order does is really has been more known kind of by shorthand as essentially the closure of the U.S. Department of Education. An executive order that would facilitate its closure if there's a recognition that they can't close it entirely, just by executive action that they would need congressional action as well to support and to make the closure happen. But the administration is committed to shrinking the Department of Education. They've certainly taken actions to do that. And this was really an effort and a focus of President Trump and Secretary McMahon to start that process, to start what I think Secretary McMahon called the final mission of the U.S. Department of Education, to start to think about dismantling the department, moving different functions of the department to other federal agencies. This is a picture of NIH headquarters, National Institutes of Health. That's been also an agency that's been in focus and has been a particular focus recently because of some action the administration took almost immediately once they became, once President Trump was inaugurated again. And that is to issue guidance to limit how much institutions, colleges, universities, and other research institutions could use and could use federal grants to reimburse for facilities administration expenses. So, they took that guidance in order to limit it to 15% of the overall grants. Immediately, a number of our colleague higher ed associations and also some institutions went to court, filed a lawsuit that is under temporary restraining order so that NIH hasn't put that cap in place, hasn't been able to put that 15% cap into place. That obviously would have a dramatic impact on the ability of institutions, research universities in particular, to conduct research if they're unable to cover the cost and expense of labs and the facilities that they use through these grants. Also, there's a question on one of the reasons why it's under a restraining order right now is there's a question on because it's the process of determining F&A percentages and how much can go towards facilities administration is congressionally supported and was passed via statute. The legal challenge is really that the administration is overstepping its bounds when it comes to that. So, the focus is really about right now is that is on pause. But I think the more important thing to say about NIH is that even though that's on pause, there's not a lot of new grants happening coming out of NIH. A lot of the funding has been held and stopped. They're not having community meetings. They're not going to conferences where they're announcing new grants. New grants aren't being issued. It's really been, even though the administration has been told that they can't freeze funding, there really is an effective freeze of funding happening at NIH, in addition to some significant workforce reductions and also NIH budget reductions. Just this week, they announced that they're going to cut the budget of NIH by about 40%, in addition to the workforce reductions that they've had. So, certainly a huge, huge impact on research universities and the groundbreaking research that happens at our institution. So, I'll talk a little bit more about that, but we're in a really obviously difficult place when it comes to the National Institutes of Health. And then, of course, the issue that most of you have probably heard of this week that has had the most attention is the administration's real focus on Harvard University. And what started as an announcement by a joint task force that the administration put together various agencies to look at university response to anti-Semitism on campus. There was a, essentially, a focus around, there was a letter that first Harvard was put under investigation. Then there was a letter, essentially, that was sent back last Friday to the university. It was not public at the time, but the university has made a number of demands to the university of things that they would have to do in order to get funding restored. About $9 billion of funding was put on pause initially when the investigation was announced. And as many of you probably saw earlier this week on Monday, Harvard said they could not abide by the demands the administration was making, that they would not agree to those requests from the administration. And immediately the administration then put $2 billion from the university, federal funding from the university, it canceled that funding. In addition, and I just want to share the quote that Harvard President Alan Garber shared around this, because I think it's a pretty powerful quote about the, really the independence of institutions, particularly private institutions, but frankly all of higher education, and why they did not agree to the demands from the administration. And as you can see in this quote, there's a real sense of, if they had agreed to this, a loss of autonomy, a loss of academic freedom, which is really troubling to the core mission and values of, frankly, any college or university, but particularly in this instance, Harvard University. So what has that led to as a result of that decision by Harvard? Well, immediately following that, as I mentioned, there was a $2 billion cancellation of federal funding that happened across some different grants from various agencies. On top of that, the president actually tweeted out his desire to see the Harvard University lose its tax exemption. And there's been now media reporting that the administration has asked the IRS to revoke Harvard's tax exemption. And in addition, the Department of Homeland Security, Secretary Kristi Noem, sent a letter to Harvard saying, essentially canceling about another $2 million, almost $3 million worth of grants from the Department of Homeland Security, but also saying that Harvard needs to turn over the disciplinary records and protest participation records of all students by April 30th, or they will not be allowed to enroll international students moving forward, essentially removed from the student exchange visa program, which would mean that Harvard couldn't enroll international students. So, obviously, the administration put its demands out. Harvard said we can't agree to these demands, and now the administration has essentially offered a couple of counter punches to that back at the institution. So, clearly, while this is very focused right now on Harvard University, I don't think any of us are under the impression that this will not extend potentially to other institutions like Harvard and other institutions that have been under the microscope. Certainly, Columbia University has been having to deal with investigations and demands from the administration, but other universities are also potentially in that focus. So, the focus on Harvard is going to shape how higher education is viewed, this whole issue. It's certainly gotten a lot of publicity, a lot of focus in the national media, but also has been a focus in the field as well. And I think a general sense around the field, and certainly a sense here from us at CASE, around the importance of institutional autonomy and academic freedom and how it's important during these times, regardless of who the administration is, to make sure those are protected. So, certainly an important moment for, frankly, all of higher education, certainly a potentially painful moment for Harvard University, but also a moment that I think provides some clarity around what are the role of universities and what's the role of government, and why it's a partnership, but government shouldn't be running these universities. And so, that's, I think, where a flashpoint, certainly, that we're going to see moving forward. So, as I talk about all of these things, and I've alluded to some of these, so I'm just going to use this as a summary of kind of what I've talked about. I kind of view things, the issues happening right now that are coming fast and furious, and what I would call the four buckets. So, I talked about the National Institutes of Health. So, for research universities, the cap of the facilities and administration rate at 15%, which again is, of course, on the temporary restraining order, that's what TRO means. Right now, I should have mentioned also the US Department of Energy has also put a similar 15% cap in place, and there are now lawsuits to try to stop that and also make that go on a temporary restraining order as well, so that that doesn't go into place. So, I think regardless, I think that the big headline issue here is there's no, even though these would have certainly an impact on research, I think the bigger short-term impact on research is no more research money is just not going out. Research grants are not going out, and funding is being cut pretty significantly, kind of unilaterally by the administration. So, there's a real concern about the research enterprise and the ability for institutions to keep conducting the groundbreaking research they do. You've obviously heard of stories, and maybe at some of your institutions, PhD candidates have had to be turned away. So, really, really a challenging moment for research universities. I also say that one of the things around, one of the helpful things in a very unhelpful moment that's been out there is there's been a lot of talk of one of the knee-jerk reactions when you heard about the cancellation of federal funding, whether it's Harvard or other universities, has been, wait a second, why don't these universities have big endowments? Why don't they just use their endowments to fill the gap? Or why don't they fundraise their way out of this? And I think it's important to point out, and there's been a number of stories I think have done a really good job of talking about what endowments are and what they aren't. Most of you on this call, if not all of you, know what the role of the endowment is. You know that it's not a savings account that you can tap at any moment, and you can repurpose funds willy-nilly. Obviously, those funds, overwhelming majority of funds are restricted. They're restricted for particular purposes. In most instances, according to the data we've gathered from the Voluntary Support of Education Survey here at CASE, the highest percentage of those endowed funds are restricted for student aid and student financial aid, followed by academic programs and faculty support. So you can't just take money that is directed for those and restricted for those purposes and redirect them towards the research enterprise. So I think there's been some good conversation and understanding that while these institutions have strong endowments that endowments are made up of charitable gifts that that philanthropy is not meant to replace the important role of federal funding, and is also not of a scale that it could replace that that the role of the federal funding that's being canceled. So I think that's been helpful at least in terms of helping to provide some more understanding about what is an endowment and what its role and how does it fit in the overall financial structure for for colleges and universities. Also, my second bucket here is all these, a lot more of the executive action pieces from the investigations and we've obviously talked a bit about Harvard's investigation. There are a number of other investigations happening in the DE, the diversity, equity, inclusion, the DEI space. The administration has announced investigations into 45 institutions in that space, really related to their relationship with a, with an organization program called the PhD program which from the administration's perspective was limiting eligibility for the program to two particular groups. So that's really has been the administration, the administration and all of its work and all of its focus has been in the diversity, equity, inclusion space has really been focused on rolling it back that both at the federal level but also both with institutions that receive federal funds and organizations that receive federal funds talking very expansively about the US Supreme Court decision. Back in students versus fair admissions back from 2023 with Supreme Court rule essentially eliminated affirmative action in admissions, but they didn't, that was really a narrowly focused decision focused on admissions it didn't talk about other aspects of race conscious or race based programs and institutions, but the administration has taken a very very hard line and a much more broader view on what that Supreme Court decision meant and their essentially their view is that all race based programs or race conscious programs are illegal at institutions and that's how they're, they're, they're focusing their investigative efforts. So, again, it goes beyond what Supreme Court said certainly challengeable from a legal perspective. But that's the, that's the viewpoint that they're taking when they're announcing these investigations so the investigation is 45 institutions is really related to the fact that from the administration's perspective, there was a limited eligibility for those for those resources and that through that program. What I've heard a lot of institutions are doing obviously working with legal counsels they review programs and policies in around diversity equity inclusion, thinking about those programs. But one of the ways that the administration seems to be going after institutions, if there is that is that limited eligibility or criteria. So, some institutions have looked at broadening that or opening it up to anybody regardless of whether that person or community group or an entity group as a way to to mitigate some of the risk around having those programs. But again, those are those are programs scholarships all those things are issues that you're going to want to work with legal counsel and think about how to ensure that that those programs are certainly in compliance with where what the department is saying So, if, if there, if there is a sense of some legal space there that the institution has that you can still achieve those aims or goals through through obviously close work with legal counsel. The US Department of Education, I also mentioned a little bit earlier, I just want to again reinforce the executive order which was about dismantling the department significant workforce reductions of department so over 50% of departments staff is now gone from US Department of Education so it is half the size as it was so it was around a 4000 staff agency federal agency now down to 2000. And the reality is that that is going to have an impact on what the department does the most visible and important aspect of what the department does for higher education, particularly is managing the federal student loan program so the $1.8 trillion student loan program. There's been there was a bumpy rollout and that was when the department was fully staffed. So you can imagine we are anticipating some real bumps as as those student aid applications are processed as institutions and colleges are working with the department, and also anticipating implications of the lack of data now they've really gotten rid of most of the research function at the Department of Education. So, lots of lack of data and research happening around outcomes and impacts. So real real significant concern about the US Department of Education moving forward, the administration would like to move those functions to other agencies but the reality is they also are congressionally restricted by that as well and in most instances, I know the President President Trump I haven't heard a lot about this recently but right after this executive order was issued mentioned moving the student loan portfolio student financial aid office over to the Small Business Administration. So the Small Business Administration had a $600 billion agency budget. So you'd be moving over $1.8 trillion enterprise into a $600 billion agency that also has been halved in terms of its staff. So, regardless you have this many federal workforce cuts you also have cuts to these budgets that are happening in each of these agencies it's going to have an impact on service coming out of the department so we're certainly watching that. Then the final piece and the piece I want to spend a little bit of time on before we spend some time with your questions is on tax reform, and the opportunities we see in tax reform and also the challenges that we see. And that's really going back to what Congress is focused on and what Republicans on Capitol Hill are focused on is an area of particular interest and focus now that they've gotten the budget resolution through they're going to want to move very quickly to enact tax reform. One thing I do want to mention I forgot to mention on the executive action front that I think is something that you certainly have seen is all the impact on international students, but some of the executive executive actions have had, and in particular, an increase of the immigration and customs enforcement units going into colleges, universities, the broad scale cancellation of student visas, even for for for very minor violations like traffic violations and others there's been evidence and efforts of canceling those visas kind of willy nilly. And so that's certainly another area where the administration has leaned into immigration. There have been some high profile cases where students or protester who were part of protests back in the fall have been detained, and lots of legal proceedings So, I just want to mention that that is still in particular another focus area of the administration other place where the administration itself has really weighed in and had an impact on our institutions. So going to tax reform. This is just the former Speaker of the House Paul Ryan back in 2017 announcing the passage of the Tax Cuts and Jobs Act, which was a tax reform bill that was passed back in 2017 under a lot of the same circumstances. So you had President Trump in the White House, you had Republican majorities in the House and Senate, they actually in the house had a very 40 seat majority in the house so they had a lot of room to work with. Back in 2017 but they used budget reconciliation the process I was talking about to get Tax Cuts and Jobs Act through so no Democrats supported the Tax Cuts and Jobs Act, and Republicans got it through using the reconciliation rules, but because they used reconciliation and special rules, they had to follow those rules and I'll talk about that in a second. So, in order to get the Tax Cuts and Jobs Act through, they had to make sure that they fit the overall cost of the bill itself within certain budget parameters. The only way they could do that was they decided to make the corporate tax rate cut, you know, down to 21% permanent, and then they made all the individual side tax cuts that were included in the Tax Cuts and Jobs Act temporary. And it just so happens that the expiration date for all those tax cuts is December 31, 2025. So that means Republicans are very very motivated to do something on the tax side and they feel like they need to do something to extend what they would call the Trump tax cuts, the Tax Cuts and Jobs Act pieces, but also to build on those tax cuts. So what happens if they don't pass something this year that means all the marginal tax rates will increase so the top tax bracket will go from 37.5% back to 39.6%. So that would bump in the marginal tax rates, the standard deduction threshold which was doubled in order to simplify taxes for most Americans would go back down, would be halved, so more Americans would have to itemize their tax returns, and the state local tax cap which is at $10,000 would actually lift. So that would, in some instances be a positive, certainly for colleges, universities, and particularly state colleges and universities, and also for those Americans who have high deduction amounts that they could deduct more of that, without that cap, or more of their state local taxes. As I mentioned, this is a priority of President Trump, he wants to see this bill go through he wants to add things like no tax on tips and some other priorities to this bill. And I think it's fair to say that it's different to say that it's going to make it easy because this issue unifies Republicans, but certainly Republicans are unified and understand that this is going to be the seminal legislative accomplishment if they're able to do it, of this Congress and of potentially a President Trump's term. So there's a lot of focus on wanting to get this over the finish line. Again, just to say the process they're using is reconciliation, the reason they're using that is because they can get this through with a simple majority in the Senate, that's why you use it. But you have a few hurdles you have to get over to in order to use these rules, one of them is something called the bird rule was named after late Senator Robert Byrd from West Virginia, who put a rule in that said in order to use reconciliation you have to have anything in there has to have an effect on the budget, it has to be germane to the budget. You can't, you can't enact policy through reconciliation that doesn't have an impact on the budget. So what's going to happen is when the house comes back as I mentioned the markup this these different pieces of the, this big beautiful bill as the President would call it, they'll put it through. They'll work to pass it through the house and then when it comes over from the house, assuming it passes it'll go through what they call a birdbath over the Senate where the Senate parliamentarian will go through all the pieces that were included in the house and decide what stays in and what stays out. That's what's called the birdbath. Essentially, all the things that are not germane will be pushed out of the bill, and then the Senate will likely then have to consider it pass it if they pass it will go back to the house the house left to pass it again. And what we've learned is that the way you get major bills through now in Congress is through reconciliation so I mentioned the tax cuts and jobs act in 2017 certainly this tax bill will be done. Through reconciliation and if you remember in the Biden administration, the Biden administration and Democrats on Capitol Hill passed the Inflation Reduction Act via reconciliation so it's become the new tool for passing big bills. As a reminder of what was in the TCGA it did have an impact on higher education in particular and also education generally, not just higher education so the cap on state local tax deduction certainly had a potential impact on state local taxes and the ability of many Americans and states with higher state local taxes to deduct their gifts. I should say deduct their taxes. We had the private foundation or the private college university excise tax on net investment income also known as the endowment tax that's still in effect that was a 1.4% tax on that investment income at certain private colleges universities and I'll talk about that in a second. So new taxation of unrelated business activities, I will go into that in particular but just to say that it actually treated universities, colleges, schools and other tax exempt organizations worse than corporations in terms of the rules. Elimination on the athletic side for those who remember the 80-20 priority athletic seating rule which allowed you to deduct essentially deduct 80% of those gifts of that of course was eliminated and we don't see that coming back so it's certainly the tax cuts and jobs that had an impact on giving for sure. So what's on the table this year in tax reform well the endowment tax unfortunately is still back on the table but there's been a lot of proposals to increase that tax and that's certainly something we're watching mostly focused on, again, private colleges universities. There's an opportunity in charitable giving to expand and restore charitable deduction for non itemizers and I'll talk about that in a second. We're also watching other ways that Congress could look at taxing tax exempt organizations and nonprofits and college universities and I think it's important to think about that broader picture which is what I start with which is all of the issues with Harvard University and these investigations that could give hill Republicans some runway to try to do some other things to tax the work that we do in education so we're certainly watching that and also obviously ways that they could chip away or think about chipping away at tax exempt status. So I always like to think about so what do we have on our side and it going against us when it comes as we approach tax reform. And so this is just an exercise to kind of say kind of give you a sense of what we have to be thinking about and the dynamics we're thinking about on Capitol Hill. So one thing we have going against us is certainly a decline in public perception of colleges and universities and certainly a more partisan skewing of how college universities are viewed and, you know, really, over the past Republicans and Republican leaning Americans, when they're asked, is caught as our college universities a positive have a positive net effect on the country. Over a majority say no, they do not. They actually are detrimental to the country. Democrats are still majority say they are positive to the country but have declined that they're also perception has declined so we're going into a space where Republicans see and you can see this both of what with what the administration's doing but also with the press releases and focus on endowments and all that coming on Capitol Hill where Republicans feel they have a political advantage going after colleges and universities and particularly those very high profile college universities. The big beautiful bill strategy so I'm not going to get into all the details about this but the Trump administration and hill Republicans have decided to put everything all that they want into one big beautiful reconciliation bill that makes it tough because that means there could be negative things that impact college universities in the bill where we have a lot of potential champions or allies, you might support, you know, might say yeah we don't want to see that in a bill, but they're because it's so big and there are the other things that people want to see if it's going to be harder for a particular lawmaker to to particularly a Republican lawmaker to kind of jump in front of the train as it's moving and say stop stop stop because I want to take a little piece out of it. It just makes it much harder from a lobbying and advocacy perspective to stop things versus if you can't tackle bills or a subsequent number of bills as overall, and then time is of the essence so the debt ceiling. One of the reasons why there's a lot of pressure on Republicans to pass tax reform as soon as possible is, in addition to the Denver's December 31 timeframe when all those tax cuts expire, so they want to certainly beat that. They also decided to include in the big beautiful bill, an increase to the debt ceiling. And so that time the time of when they're going to need to increase that debt ceiling is probably going to come to pass sometime in July or August, the Treasury Department will make that announcement very soon and if that's the case that means they have to increase the debt ceiling by they have to increase the debt ceiling by August that means they need to get this bill through by the end of July, before they go on their August recess so time is the faster this moves the harder it is to stop. What do we have in our favor well I mentioned where it's very slim majorities in Congress so we've got, we've got the ability to, if we can make some more issues headaches particularly those challenging issues headaches to stop some things we've got certainly a lot of engaged partners and coalitions across the charitable sector. Who are also watching things like taxing tax exempt organizations and other other issues so we've, we've got that going for us. We've had we've had some successes that we had back in the Tax Cuts and Jobs Act back in 2017 getting some really bad provisions, out of the bill, taking them out really again working with coalition partners so an example of that is there was an effort to try to tax what we call royalty payments with for affinity programs so for those of you at alumni associations might have credit cards at one point, you got a royalty payment from the bank in order to put the institution's logo or the alumni associations logo on the card. Those, those payments are not taxed well Congress in the first iteration of the Tax Cuts and Jobs Act, the house that actually propose that those be taxed well. Certainly for us there are other organizations and coalitions out there that have that use affinity programs including the Farm Bureau, including Sesame Street and others who get royalty payments so so really being able to partner with those groups. MIT got Republicans to take that out of the bill so we certainly have past experience showing that when we work in coalition and across just not just with education but more broadly, we can have real impact and success. And then of course, we also have some great third party validators that's really where advancement can come in in terms of some of the alumni and key supporters that we have who can use their voice and champion our work. If they know particular lawmakers and others so we certainly have an opportunity there and I'll talk about that in a minute. Just some specifics on the two areas of the tax form that we're really really watching the endowment tax so right now this is the current what the tax is currently it's 1.4% net investment income tax for private colleges universities that have endowments over $500,000 per student that's about 50 to 60 institutions right now and they're not all the, you know, obviously, a lot of the high profile institutions are included in this but there are a lot of institutions that you wouldn't normally think would be included that are a part of this of this tax as well. So it is. That's the current tax what we've been hearing up on Capitol Hill though is a lot of of emphasis and you really using some of the around universities and anti semitism and the protests from last fall as a pretense to to introduce a lot of bills and options to increase the tax. So everything from increasing its 21% investment tax of going from 1.4% to 21% a huge huge increase on this in a bill that's been introduced on the house side, that would be make it in line with the corporate tax rate of course it doesn't make any sense because, as we all know endowment funds are charitable funds they're not corporate profit. So taxing them at a corporate rate doesn't make a lot of sense but that's certainly one proposal that's been out there. You can see another kind of in the middle proposal and increase from 1.4% to 10% tax. But you can also see some focus on seeing if you can shift. That threshold down from $500,000 per student to $250,000 per student which would certainly capture more private colleges universities. And then another proposal that would be there's actually another one to that would be 14% as the tax. And again, looking at broadening the base. If I had to guess right now I mean there certainly is likely going to be an endowment tax increase in the bill, it will likely, we have not heard that will be focused at all on public colleges and universities at all at the focus is mainly on private colleges universities. And my guess is that there'll be more of a focus on increasing the rate than broadening the base given the slim majorities in Congress that we've talked about. But I think we have to watch for that and certainly all of the scrutiny and the focus on what's happening with higher education in the news right now might push Republicans to think about a few in the short term to push for a higher tax rate or broadening that base a little more than they normally would given the administration has decided to attack take on higher education so directly. But we'll have to see how that plays out and but we are certainly expecting to see an endowment tax proposal in there. I should mention that it's been talked about as a revenue raiser. It certainly raises revenue but not near the amount of revenue that Republicans would need to offset the tax bill. It's a very, very, very, very small amount of money that any of these endowment tax rates would raise. On the charitable giving side, and this is really the opportunity side, before the Tax Cuts and Jobs Act, 30% of Americans itemized their charitable deductions and itemized and then so they were able to deduct their charitable gifts. Now we're in a world where only 7.5% of Americans deduct their charitable gifts. And that's really because the Tax Cuts and Jobs Act doubled the standard deduction threshold. So the idea for that was Republicans want to make it easier for Americans to file taxes. And certainly you make it easier when more Americans can take the standard deduction versus itemized. But the problem with that is from a charitable giving perspective is that you have less Americans then who can deduct their charitable gifts. So there's been a number of studies. These are just two examples from the American Enterprise Institute and the Lilly Family School of Philanthropy in Notre Dame that came out that showed that actually that doubling of the standard deduction did have an impact on giving. And if you look at these are just a couple of stats around there. AEI found that we would have had $80 billion more in charitable giving in 2021 had itemized the amount number of itemizers stayed the same and itemized giving and stayed the same. The same thing with Indiana and Notre Dame, they found that doubling the standard deduction led to first a $20 billion deduction in giving in 2018, followed by a permanent $16 billion drop each year post that. So it certainly had an impact on charitable giving and moving forward. There was during the pandemic in 2020 and 2021, a temporary charitable deduction for non itemizers that was $300 and $600. Very modest, but it did lead to additional giving and did provide for the first time in a long time, a charitable deduction for non itemizers. So it brought to those other 93% of Americans or so the ability to deduct some level of charitable giving, even if it was small. So what we've been working on a case along with our partners is really pushing and supporting the charitable act, which is a bipartisan bill that's been introduced in the House and the Senate that would restore and expand the charitable deduction for non itemizers. It would increase that cap that was back in 2020 and 2021 from $300 and $600 to $5,000 and $10,000. And it really this, the charitable act is really what we've been pushing and building bipartisan support for, because we would like to see a charitable deduction for non itemizers included in the tax bill this year. And we are well positioned with some great champions to push that. And just to give you an example, Senator James Lankford, a Republican from Oklahoma has been a real champion for this. He's on the finance committee in the Senate, a Republican. Senator Chris Coons, Democrat from Delaware has also been leading the charge in the Senate. We have 22 senators now in support of the charitable act in the Senate, almost a little over a fifth of the Senate. On the House side, we've got 44 co-sponsors, including a good number of members of the Ways and Means Committee. We're being led by Republican representatives, Blake Moore, a Republican from Utah and Democratic representative, Danny Davis, Democrat from Illinois. So we're really pushing hard to build out and build bipartisan supports that we can ensure that a charitable deduction for non itemizers makes it into a tax bill. And just to show you how we're working at CASE, I have the privilege of chairing the charitable giving coalition, which is a coalition of a variety of organizations. You can see them up here, including the National Association of Independent Schools, the Red Cross, Association of Fundraising Professionals and others, independent sector, others who are all working together to work with Congress and to push Congress to expand charitable giving to non itemizers in tax reform this year. So really, really bullish and hopeful that we're able to make that happen this year. And it's certainly a sliver of light in what has also been a very, very challenging environment for higher education and education generally. Just a quick word about other couple issues to watch for foreign gift reporting and gifts from from foreign sources. The House has passed what's called the Deterrent Act, which would lower the threshold right now. If you get gifts from foreign donors, colleges, universities, this doesn't apply to independent schools, colleges, universities have to report those gifts over $250,000 to the Department of Education each year, twice a year. If the Deterrent Act passes the Senate and is signed into law, that would go from $250,000 to $50,000. We certainly have been opposed to the lowering of the threshold. The idea behind this is to bring more scrutiny to foreign influence, which certainly we understand, but it doesn't really make sense to lower the gift threshold. If you're looking at influence, it would make more sense to focus on bigger gifts, which is where that focus has been in the past and why there's the $250,000 threshold. But we certainly see the potential for a $50,000 threshold coming through. It's unclear when the Senate will take this up, but we certainly are watching the issue and there could be some implications for foreign gift reporting for our member institutions. And then of course, we're going to be gearing up and watching how FY26 federal funding happens. A number of you might have had, particularly if you have community colleges joining us and others, might have had some earmarks that you had hoped to get in FY25. Well, if you remember, Congress just passed a continuing resolution to fund the federal government at FY24 rates through the end of fiscal year 2025. So that means that there were no earmarks, there were no congressionally directed spending, and it's unclear whether that'll happen in FY26 as well. The way things are looking right now, it's looking more and more like we might have another continuing resolution through the appropriations process next year, but we're going to have to watch and see how that plays out. Certainly a lot of the actions the administration has taken around cutting spending at the federal level, it's going to be hard to see Republicans and Democrats coming together on federal funding. And for federal funding and appropriations, you can't use reconciliation for that. You actually have to go through regular order so that Republicans and Democrats need to work together to make that happen. So before I open it up for some questions for the last 15 minutes or so, just wanted to share some resources that we have and some things that you can do. Hopefully many of you are a part of the Case Advocacy Network. If you're not, that's our online community where you can sign up and you get weekly updates on what's happening on Capitol Hill. And also we're starting to update, in addition to when Congress is on recess, just updating administration actions as well. So we're working to keep you all informed about what's happening. We have a U.S. Federal Policy Tracker that we're trying to keep as updated as quickly as we can and includes links to all of the executive orders. I didn't get a chance to cover even a portion of all the executive orders that have been introduced that impact colleges, universities, and schools. So you can find more information about those in our U.S. Federal Policy Tracker that we're keeping up to date. I'm doing a lot of case leader briefings, so joining institution senior advancement teams, joining, also able to join volunteer leader meetings, like board meetings and others, providing quick updates, zooming in, so to speak, joining and providing quick updates on what's happening on Capitol Hill and how it impacts your specific institution. So if they're interested in that, you can certainly reach out to provide more information about that. It's been a great way for us to, in case, to be able to help share what's happening inside the Beltway real-time with some of your key leaders and key colleagues. I think it's really important right now for advancement to be working, if government relations isn't a part of advancement, to be building and making sure that you're working and are in tune and aligned with government relations, particularly when it comes to tax reform. That's really where a lot of the issues that impact advancement will be on the table, from whether it's in the endowment tax issue or expanding charitable giving or other issues that we may not, that may arise over time. So it's really important to build that relationship. And also, I know a number of your institutions likely have alumni advocacy networks. I just want to say, really think about whether you have a formal network or not, think about how you can leverage your alumni during this time. Are there key supporters in key places who have key relationships who could help championing your institution, champion higher education generally, and could help, you know, a good example is around research, right, who can share the real value of research and what institutions are doing and hopefully help provide some voices to Republicans on Capitol Hill, who can then push back and say to the administration, it's really important that we unlock this funding and unfreeze this funding. So certainly thinking about alumni advocacy, and we at Case have been thinking about other ways and new ways and creative ways that we can help our members engage with alums and work closely with alumni associations on that. So stay tuned as we start to think about and bring out some new tools and resources on that front. So with that, this is my contact information. I'm going to close my slideshow here in a second, because I want to open it up for questions. And I noticed in the Q&A tab, Christy, that there's been some activity. So hopefully we've got some questions. I'm going to try to tackle as many of them as I can. So let me turn it over to you. Perfect. And before I get to those, I just want to let everyone know, we had a few people asking, we are recording this, that link will be going out after we get it uploaded back into the event page. So you will find it at the same link used to join today. And then I did just post the two links that Brian had on his last slide for the Advocacy Network and the Federal Policy Tracker in the webinar chat. So you can have those. So our first question here, some of our campuses have alumni advocacy programs that are largely focused on state politics. Our foundation has an email system to invite alumni to send emails to elected leaders. We've been focusing on Washington State, but now we're considering expanding to federal advocacy. It would be great if we were adding our alumni voices to the larger effort from across the country. Are you aware of any nationwide higher education advocacy efforts focused on contacting federal level elected officials? It's a great question. It's something that we're certainly starting to work on here at CASE, and we know that we have to do it very quickly. It's one of those issues where we need to work with our higher ed association colleagues to put that into place and to make it happen. And I know there's been great, great, unbelievable work, and you said you're from Washington, and I know there's been great work in the state of Washington around this, of grassroots advocacy and advocacy at the state level. It has made a real difference for institutions, particularly for public colleges and universities. I think we need to start thinking about how you can take those networks and think more broadly, not only the networks that you have working in a particular state are probably really focused on your alumni within that state, but think about your nationwide alumni and how you can activate them when it comes to federal issues. So we are certainly actively looking and working to see how we can activate and think about connecting alumni. One site that I'll mention, and we can share this in the follow-up, and maybe Christy, you can try pulling it up while I'm answering questions, is the American Council on Education, which we work with on quite a bit of issues, as you can imagine, has created a kind of a website focused on tax reform that has a number of links and also has an ability, some grassroots advocacy functionality that allows you, once you visit the site, to send a message to lawmakers. So that could be a tool that you could use with your alumni networks right now that could help them send messages around various aspects of what we expect to see in tax reform. Or you may want to, it's just one example of a tool that's out there, but we certainly are looking at how can we kind of connect the dots and bring kind of a nationwide effort together, connect these alumni advocacy networks and make more of a difference. I'll also say that a lot of that, again, is happening at the public college university level. We're also looking for great examples and to start encouraging private institutions to do the same, to start thinking about their alumni as advocates. And again, not focusing on, I know there's a real concern about feeling too political or getting involved in partisan issues, but the issues that we would encourage for you to think about for alumni to get involved in are really issues that impact higher education as a whole, that have direct impact on your institution. They're not, you know, our institutions are non-partisan. Support of higher education should be a non-partisan issue. So messages from alums talking about the importance of federal research, the importance of that partnership, the importance of charitable giving and what it does for institutions, those types of messages being amplified by alums, whether it's through grassroots or whether it's positioning key alums or donors or supporters for individualized meetings with key members of Congress, whatever the strategy, I think just thinking about using your alumni is really important, but it's a good question. It's something that we're trying to figure out how we can try to put up, set up and activate a larger nationwide network on alumni advocacy. Great. So another question, given the current federal financial aid uncertainties under the current administration, do we foresee a significant impact not only on international student enrollment in the U.S., but also a potential outflow of domestic students choosing to study abroad instead? That's a good question. I, you know, we haven't seen any indication of that, of the latter yet. Certainly I think we're going to see an international student enrollment decline. It would be surprising to not see that given this situation. We also saw that during the first Trump administration, and you could argue some of the actions that are being taken right now are even more directly focused on international students or potentially direct, increase the risk to international students if they decide to study here. So I think that's a real challenge. It's interesting to think about what domestic students will do. You certainly could see that potentially, but you know, I think the jury is still out on what that will be and really how long lasting this impact will be. I mean, our hope is that we can collectively work together to push back on this work to reinforce the value of what our institutions provide, to provide the support necessary so that we keep, so that students who want to study in the United States, whether they're domestic students or international students, can study here and bring that value to institutions. But we're going to still have to, we'll have to see what the impact could potentially be on the domestic student side. The worst of all worlds, of course, though, would be that we see just an overall checking out or decline in enrollment generally for higher education. So we see students just say, or anybody just say, you know, I don't think it's worth it for me to go. I don't want to deal with it. I know, I don't know what my aid will be. I don't want to deal with the headaches. I just, I'm not going to pursue that path. And I think that would be the worst outcome, of course, of all. If out of this, we end up seeing, we already have some obviously demographic issues happening around enrollment, but to see that accelerated because of actions that certainly could be addressed would be a real, would be very disappointing, to say the least. So hopefully we won't see that. Yeah. Someone else asked, if the endowment tax would exempt public institutions, how would it impact separate college and university foundations? Would private independent foundations be shielded from this tax? As of now, yes. The reason for that is 5-1-C-3 college university foundations, mostly those exist and that are connected to public college universities, exist to support their, you know, to raise money and invest money on behalf of the public college university. The language around the endowment tax is focused on private institutions and the definition of private institution. It doesn't, wouldn't, the language in statute does not call out or indicate a private 5-1-C-3 affiliated with an institution. I would say there's no reason why a private institution or I should say very little reason why a private institution would create a separate foundation because they're already a 5-1-C-3 and they're already private. But if they did, you could maybe make an argument in the short term that you could, that by having a separate foundation, that might not be subject to it, but that would be a loophole that would be closed very quickly. Both probably from a regulatory perspective by the IRS or Treasury. But public college universities and public college foundations, I don't see them, again, there's been no indication that public college universities are going to be potentially subject to the endowment tax. It would broaden the base of institutions that would be subject. First of all, public college universities aren't going to be near the endowment thresholds because they have such high enrollment. But even with that, think about all the lawmakers that you'd be potentially bringing into the fray around their college universities that would be taxed and their state college and flagships and community colleges. There's just not an appetite for that, I think, on Capitol Hill right now. And I think the foundation, because it is affiliated with a public college university, would be protected from that. Great. Good question. Someone else asked, what would be the repercussions on universities if tax-exempt status was revoked? Oh, I mean, it would be a huge impact. And I want to be clear that there's been an effort and the administration has asked that tax-exempt status be revoked. The burden on the administration and on the IRS to make that happen is huge. And there certainly would be, I would assume, a legal challenge to that because it's very clear in the tax code that an educational institution conducting research, a research institution, is certainly a charitable organization. In fact, education is specifically called out in the tax code as a charitable activity and charitable entity. So even if there's an effort to revoke the tax exempt status, there usually has to be a pretty strong case for that for the IRS to actually do it. And even if the IRS does it unilaterally or just does it because they want to, the courts would very much have to look at whether a process was followed, what the specific violations are, was there due process, was there an opportunity for the institution to provide reasonable, address the concerns. And in this case, it doesn't appear that that's the approach the administration is taking. So I certainly would think there was a legal challenge. But you can imagine if an institution didn't have tax-exempt status, first of all, you're subject to all the property tax and all of those, depending on if state and localities followed that, that would be potentially subject to that. But in addition to that, all the assets and resources would be potentially subject to corporate tax as well. So it would have a huge impact on institutions in the bottom line. Again, I don't want to overstate it. Certainly, it looks like in the case of Harvard, there's a real risk of that happening, or at least an attempt to that happening. But the legal hurdles to making that stick are really, really, really, really tall. And so I think we have time for just one more question here. We're about at time, but I think this one's pretty simple for you to answer. Do you have a template letter or talking points on the Charitable Act that we could use to support? Absolutely. And in fact, what I'll do as a follow-on, and maybe also as an encouragement for you to join the Case Advocacy Network, I'll post one on a message there. But also, I can share with Christy that we can get around a template letter that you can use around the Charitable Act. Again, it's one of the areas that's kind of a bright spot in a lot of challenging time, and one that we really want to lean into. And it's certainly an area where certainly our college universities can weigh in, but also our independent schools and private schools, which are, relatively speaking, the administration views in a much better light. They certainly have an opportunity or ability, potentially, to be strong advocates for the Charitable Act as well. So we'll certainly share that template letter. Great. And I think we're just about at time. I want to thank everyone so much for joining us, especially on a Friday afternoon. We really appreciate it. I will include these links in the follow-up email when I send out the recording as well, so you guys can bookmark those if you didn't grab them out of the chat. But thank you so much, and have a great weekend, everyone. Thanks, all.

Brian Flavin

Strategic Partnerships

higher education

Republican-controlled Congress

executive actions

budget resolution

tax reforms

Department of Education

institutional advocacy