Cornell Tax Returns Show Salaries and Economic Challenges

Each year, people file their personal tax returns with the IRS, and corporations and businesses must file tax returns as well. However, although personal and for-profit business returns are strictly confidential, Congress has for decades required the public disclosure of non-profit returns to discourage scams or the misleading of donors.

Unlike political organizations or private foundations, the list of donors and gift amounts on the returns of public charities are kept confidential by the IRS and excluded from the public version of the tax returns.

The returns relating to the Cornell community have now been publicly posted, disclosing the salaries of directors, officers and the highest-paid staff. There are dozens of relevant returns to consider, and this report looks at the largest ones. At least two returns – for the Cornell Sun and the Student Agencies – are not public because those corporations have for-profit status.

As the national debate over the Hamas / Gaza situation turns toward donor boycotts and tuition strikes, these tax returns indicate how vulnerable Cornell would be to such actions. Here is what we can learn from the larger Form 990 returns.

Cornell University

Cornell’s 72-page Form 990 provides more detailed information than does its Annual Report or associated press releases. Years ago, Cornell would host press conferences to answer questions about its finances, but in recent years, Cornell’s Media Relations staff has limited discussion of important financial issues or of the context of its numbers.

For the year ending June 30, 2022, Cornell had $17,439,114,941 in assets, $4,144,096,861 in liabilities, giving a net worth of $13,295,018,080. Program income included $1.3 billion in tuition, $1.3 billion in medical services, $1 billion in research grants, $173 million in room and board, $152 million in land grant appropriation and $838 million in other income.

Regarding financial aid, the Form 990 reports for 2021-22:

Each 990 must list the compensation of all officers and directors as well as the five highest-paid employees. At midwestern and southern universities, this includes the football and basketball coaches that frequently are paid more than the President. At Cornell, the top earners are medical doctors working at New York Hospital.

Trustee Salaries

When faculty or employee trustees join the Board, they agree to have their salaries disclosed on the Form 990. In recent years, these seats have been held by senior faculty and senior employees. In contrast, when community elected trustees were expanded in 1970, there was a separate seat for a non-tenured faculty, and there were four faculty-elected seats instead of the present two.

Presidential Salaries

Each year, the release of tax returns triggers a comparison of Ivy League salaries:

Investment Officers

Cornell University Foundation

The CU Foundation is a donor-advised fund. A donor makes a tax-deductible donation to the CU Foundation up front, and then over time, allocates specific gifts to eligible charities, including Cornell programs. This allows a donor to receive a tax deduction in a year that is helpful to him without deciding where the money should go at the time. The Foundation files a separate Form 990 that lists all of the charitable donations paid out during the year without disclosing the specific donors. As of June 30, 2022, it had $167 million in assets for 213 different donors. Of this, $156.6 million is invested in Cornell’s endowment.

During the year, donors designated $18,024,112 to Cornell programs, but also gave to charities that might not be popular with some on campus, such as $40,000 to Turning Point USA and $25,000 to the American Council of Trustees and Alumni (ACTA). If a future donor boycott hit Cornell, the past transfer of funds to Cornell could not be reversed, but the donors could stop designating Cornell programs to receive CU Foundation funds.

Jacobs Technion – Cornell Institute

The Jacobs Institute is a joint venture between Cornell and Technion that operates a masters program on Roosevelt Island as well as a “Runway” program to launch new tech startups. It files a separate Form 990. The Institute does not have employees.

The Institute was founded in 2013 to implement the Cornell-Technion joint venture on Roosevelt Island, and its students receive degrees from both Cornell and Technion. Joan and Irwin Jacobs gave the initial $133 million gift to start this program.

As of June 30, 2023, the Jacobs institute has $168,791,006 invested in the Cornell endowment.

Boyce Thompson Institute for Plant Research

BTI operates a lab on Tower Road, as a replacement of its former independent campus in Yonkers, NY. BTI has 168 employees and total revenues of $16.7 million. Its investment income was $1.1 million based on total assets of $101 million of which $5.9 million is true endowment.

The highest paid BTI employees are:

Apparently, Ithaca-based plant scientists do not earn as much as Manhattan-based surgeons.

Taxation

The income and capital gains of all of these organizations are tax-exempt. Because Cornell’s endowment totals less than $500,000 per student, it is not subject to the 1.4% excise tax on large college endowments. Each return lists the total gifts for the year of appreciated stocks, and it is clear that Cornell donors avoid millions in capital gains tax by donating appreciated stock instead of selling those stocks and then donating the same amount of cash.

However, charities can engage in unrelated businesses. For example, the Catholic Church owned a pasta factory. Although the income relating to a non-profit organization’s charitable mission is tax exempt, these organizations pay tax on their unrelated business income (UBTI).

In conclusion, there are literally hundreds of Cornell-related entities that file Form 990 tax returns, and they all deserve public examination and scrutiny. All of the information is there and each reader can draw conclusions regarding the merits of how the entity deploys its assets. None of the entities listed above are particularly vulnerable to a tuition boycott or donation boycott stemming from the Hamas / Gaza conflict.