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Sports donors under review

Dean Treftz

The Daily Iowan

January 29, 2007

[Note: This material is copyright by The Daily Iowan, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of The Daily Iowan.]

WASHINGTON - Prompted by high-profile stories of lucrative salaries for collegiate coaches as tuition continues to rise nationwide, Sen. Charles Grassley, R-Iowa, is investigating the role that tax-deductible contributions play in university athletics.

Specifically, Grassley - the ranking Republican on the Senate Finance Committee - is taking a look at tax-exempt donations that give donors higher priority for such perks as luxury seats and game-day parking spots.

"I worry that these tax breaks may be eaten away by universities that raise tuition all the time," he told The Daily Iowan. "I want to know, what does it contribute to the educational purposes of the university?"

For instance, he pointed to new Alabama football coach Nick Saban, who is slated to earn $32 million over the next eight years. Those salaries, Grassley said, concerned him that universities and their athletics departments were losing sight of their scholastic mission.

He was quick to emphasize that his investigation is in its early stages and that he doesn't know what the result will be, but any potential change in contributions could greatly affect the financial makeup at the UI and other colleges nationwide.

The revenue brought in by the tax-deductible contributions is essential to make sure Hawkeye athletics is pulling its weight in university finances, said Hawkeye Athletics Director Gary Barta.

"The revenue we bring in for football, including contributions, pays for the other 24 sports," he said.

Donations will become more crucial this year as the Iowa athletics department becomes financially independent from the university's state funds, he said. At present, the athletics department relies on $800,000 from the university out of its $56 million budget.

In fiscal 2006, the UI received roughly $20 million through athletics donations, which qualify donors for priority seating at sporting events through the I-Club program.

Though Andy Piro, the UI Foundation senior athletics fundraiser, declined to speculate on potential effects of changes in criteria for tax-exempt donations, he said he was not worried about the investigation.

"We're confident [that] any review by Sen. Grassley or Congress would only reinforce [intercollegiate athletics'] value," Piro said.

Grassley, a fiscal conservative and well-known penny-pincher, is no stranger to federal oversight. In the past decade, he has investigated several federally aided charities and nonprofits.

While he certainly has the power to initiate legislation, the senator said internal probes have historically yielded the most effective results. He recalled a post-9/11 look into the Red Cross when the organization reduced the size of its board of directors after conducting an investigation of its own.

"They probably did more good on their own than if I passed a law," Grassley said.