The U.S. Internal Revenue Service recently decided to allow philanthropist Rod French to make a significant tax deduction on his $200,000 contribution to the renovated skybox facilities in Jack Trice Stadium.

According to ISU officials, this decision could be a financial landmark for the growth of athletic programs at Iowa State and other universities nationwide.

French, owner and president of R.L. French Corp., received approval last Wednesday to claim $143,584 of his $200,000 gift to ISU as a tax deduction.

In return for the gift, French received the use of a 16-foot skybox.

Because he received benefits for donating money, the IRS ruled last December that French should not be allowed to make such a substantial tax deduction because it seemed that he was paying a rental fee for the skybox instead of making a charitable contribution.

However, as reported in The Des Moines Register, it was ruled last week that French was indeed making a charitable contribution to ISU because he was following guidelines set forth by the IRS that state that “the payment is deductible only to the extent that the payment exceeds the fair market value of the privileges or benefits received.”

Although the decision initially brought into question whether it was ethical for a donor to receive benefits for donating to university projects, ISU Athletics Director Gene Smith said the growth of ISU athletics is at the heart of the matter for French.

“Rod believes in intercollegiate athletics and the benefits that kids receive from participating in them. He knows that his dollars help kids,” he said.

Smith also said the new 23-suite skybox and press box facility, now in its third year of use, was a $6.1 million project, about $5 million of which came from donors like French.

Smith said the skyboxes “serve a number of purposes” for contributors.

“[Some] bring clients or people that they have a working relationship with; some bring their families, and some use the skyboxes strictly for business reasons. ISU can increase initiatives by providing all those purposes,” he said.

The initial $6.1 million will go toward paying the construction costs of the suites for the next seven to eight years.

Then the revenue generated from the suites will go directly back into ISU sports, Smith said.

“I am glad that Rod French was able to work with the different associations across the country and the IRS to show that this is a value to higher education,” Smith said.

Joan Bowles, assistant athletics director for annual giving and customer service, also said a tax deduction could be an incentive that might attract more donors not only to ISU but to other schools across the country.

One other school trying to attract more donors is the University of Missouri, Bowles said.

In fact, University of Missouri officials were “waiting for the outcome of the French decision to see how they would approach their own fund raising,” she said.

Bowles also said the 16 donors, corporate and individual, have made a 10-year commitment to lease their suites.

The price of a suite is dependent on its size.

A nine-foot suite costs $15,000 annually to lease, and a 16-foot suite costs $25,000 annually, Bowles said.

Along with the R.L. French Corp., other contributors include Gary Thompson Oil Company, the ISU College of Engineering, R & R Investors, Ltd. and Pioneer.

“Many of our suite holders are also donors to other programs in our athletic department,” Bowles said.

Other benefits also are included with donor contributions.

One such benefit is membership to the National Cyclone Club, the annual giving program.