University endowment earnings are usually tax-exempt. However, depending on the type of investment, even Universities can be required to pay federal taxes. Investing through so-called blocker corporations, which are established in no-tax or low-tax jurisdictions like the Cayman Islands literally blocks the University from having to pay taxes. IU and many other Universities utilize blocker corporations to maximize the return on their investments. The practice is legal but supports a system that is often used to hide money or exactly how it is invested. We have asked how you feel about IU investing in offshore accounts.