The business environment for higher education institutions is becoming increasingly more sophisticated and diverse. Education and academics, alone, are no longer sufficient to compete in the higher education market. Universities are adopting growth strategies that embrace alternative sources of revenue and activities.
In many cases, these new activities are spun-off to a related affiliate – a practice that allows the affiliate to operate without the governmental constraints of a public university and with a singularity of purpose and mission. Colleges and universities are forming affiliates to manage intellectual property and technology transfer, encourage business incubation, engage in economic development, conduct research activities, provide insurance, and conduct activities unrelated to their educational and academic missions. These activities can take a number of forms including through a tax-exempt subsidiary (e.g., a supporting organization), taxable subsidiary (which may be limited by potential constitutional constraints), joint venture, contractual affiliation, or investments in commercial organizations.
Attorneys from Ice Miller’s Exempt Organizations and Tax groups focus on the federal and state income, estate, and gift tax issues facing our higher education clients. We routinely advise higher education clients on the advantages and risks of forming and operating affiliates to conduct ancillary activities. Our attorneys understand the unique statutory, constitutional, financial and governance issues that colleges and universities face in this process.
Ice Miller's Exempt Organizations practice serves as outside general counsel to governmental and tax-exempt clients, from start-ups to mature and sophisticated entities. We understand that federal and state regulators, alumni, and the general public have demanded a greater degree of transparency and disclosure than has been the case in the past. In response to this trend, we are actively structuring proactive policies and procedures to adopt strong conflicts of interest policies and related disclosures (applicable to all parties, including board members, faculty and employees); incorporate the best practices in an evolving and complex regulatory environment; and avoid transactions or arrangements that could give rise to intermediate sanctions, private inurement, or private benefit.
Ice Miller’s attorneys actively advise a number of governmental and nonprofit entities, large and small, with regard to their corporate and governance issues. We regularly attend our client’s board meetings and serve as a legal and business resource to the board and executive team. We advise our clients on governing documents, committee charters and enabling resolutions, conflicts of interest policies, issues relating to board/staff relations, appropriate delegation and accountability, board and staff succession plans, director and officer indemnification and insurance, and other governance related matters. Our clients depend upon us to monitor industry trends, best practices, and legislative proposals.