What is the problem?
A discrepancy in the tax code prevents not-for-profit entities from being able to use tax-deductible charitable contributions to build, maintain and improve student housing.
- Fraternities often lack the financial ability to build new structures and make critical safety improvements to existing facilities.
- Because of this issue, fraternity members often live in sub-standard housing.
- Fraternities are losing capacity given that they cannot make the improvements we need to ensure a safe living environment for students.
- Alumni and donors want to contribute to improve fraternity housing to positively impact member living and learning experience, but are unable to make tax-deductible donations under the current code.
What is the solution?
The Collegiate Housing and Infrastructure Act (CHIA) (H.R. 1200/S. 736)
- CHIA eliminates an arbitrary distinction in the current tax code that allows colleges and universities to use charitable contributions to build and maintain student housing but prevents other not-for-profit student housing entities from doing the same.
- CHIA would result in all not-for-profit housing being treated the same under the law.
- The text of the bill simply states that a 501(c)(3) organization will not lose its tax-exempt status solely because it chooses to make housing and infrastructure grants to 501(c)(2) organizations or 501(c)(7) organizations.
Primary benefits for passage of CHIA
- Safety: Fraternities often lack the funds needed to provide critical safety upgrades to existing structures.
- Affordability: More not-for-profit housing will be built allowing students to better afford safe housing.
- Creates jobs: Over $1 Billion dollars in proposed housing is waiting to be built providing needed jobs.
- Minimal costs to tax payer: It is rare that a bill costs the tax payer little and has bipartisan support.
- Treats everyone the same: All not-for-profit student housing would be treated consistently under the law.
How much will CHIA cost?
The Joint Committee on Taxation last scored the cost of CHIA at $148 million over 10 years.