“The size and growth of college and university endowments has attracted the attention of academicians and policymakers,” the Congressional Research Service says in its “Overview and Tax Policy Options” report issued recently.   Because of this increasing concern, the CRS has issued the report to provide “background information” on endowments and “discuss various options for changing their tax treatment.”

Possible options discussed in the report include (1) establishing a payout requirement; (2) imposing a tax on investment earnings; (3) limiting deductions for certain gifts to endowments; and (4) a change in tax treatment of certain debt-financed investments used by endowments.