Tax exempt debt. Bond issuance. Foregone revenue. As a marketing person, I read those words and yawn. Boooring. Boring but important. It might take a quick call down to the Econ Department to help with some of the verbiage but I’m determined to understand this new issue…and so should you be.
Senator Grassley, from Iowa, is investigating the legality (or at least merit) of non-profit institutions – that’s you, colleges and universities! – borrowing bonds from the federal government. The Senator says the problem is this: a college could borrow money from the government, even if it’s not in debt, without being taxed. Further, the college could then use their existing endowment to invest in other places – thereby using government money instead of their own.

Not fair, says Senator Grassley.

Now, finance issues are not normally part of the marketing department’s purview. But pay attention to this issue. Think of the PR nightmare: your institution is painted in the public eye as swindling the Federal Government – using tax payer dollars to pay for new buildings when the average person can’t even find work. Just another case of the rich using loopholes to get richer, they’ll say.

What will YOU say in your marketing message response? That’s the question you have to be prepared to answer. Even if it means spending a couple of minutes going back to Econ 101.

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