Best Practices Regarding University-Affiliated Foundation ...

Best Practices Regarding University-Affiliated Foundation Relationships

Advisory Task Force Report

August 19, 2013

Prepared by: Regent Brenda Pejovich, Chair Regent Robert L. Stillwell Regent Wallace L. Hall, Jr. President Diana S. Natalicio, Ph.D. President David L. Callender, M.D. Chancellor Francisco G. Cigarroa, M.D. General Counsel to the Board Francie A. Frederick Vice Chancellor for External Relations Randa S. Safady, Ph.D. Vice Chancellor and General Counsel, ad interim, Daniel H. Sharphorn Associate General Counsel to the Board Karen Rabon Dr. Jeffrey J. Cain, Founding Partner, American Philanthropic Mr. David Bass, Director of Foundation Programs, Association of

Governing Boards of Universities and Colleges

TABLE OF CONTENTS

EXECUTIVE SUMMARY

1

I. INTRODUCTION

2

A. Background

2

B. Charge to the Task Force

3

C. Work of the Task Force

3

D. Findings/Guiding Principles

4

II. RECOMMENDED BEST PRACTICES

4

A. Mission Alignment

4

B. Transparency

8

C. B est Relationship Practices and University-Affiliated Foundation

9

Policies to Assure Exemplary Governance and Activities

D. Gift Acceptance Policies and Honoring of Donor Intent

11

III. CONCLUSION

12

IV. APPENDICES

13

Best Practices Regarding University-Affiliated Foundation Relationships

Executive Summary

Mission Alignment

Recommendation #1: Each U. T. System institution should engage its affiliated foundations in a process to review or develop a

Memorandum of Understanding (MOU), consistent with the recommendations in this Report, that (a) clearly defines the relationship between the university and its affiliated foundation(s), (b) assures the preservation of mission alignment over time, and (c) is periodically reviewed, assessed, and adapted in keeping with changing circumstances and the passage of time.

Transparency

Recommendation #2: Universities and their affiliated foundation (s) should work together to implement practices that increase

transparency, openness, and disclosure to the supported institution and the public.

Best Relationship Practices and University-Affiliated Foundation Policies to Assure Exemplary Governance and Activities

Recommendation #3: Recognizing that good governance and strong board leadership are essential to the mission fulfillment of each

university and its affiliated foundation (s), the Task Force has identified several best governance practices that should be followed.

Recommendation #4: University-affiliated foundations should adopt policies that are transparent, reflect best practices, and mitigate

even the appearance of impropriety, unfairness, financial self-dealing, or fiscal imprudence.

Gift Acceptance Policies and Honoring Donor Intent

Recommendation #5: Institutions and university-affiliated foundations should adopt and consistently apply gift acceptance policies,

thoroughly document donor intent, and carefully review proposed gifts to ensure that donors' intentions can be fulfilled and that through the acceptance of gifts institutions will not be subject to undue external influence, such as over academic programs and appointments, or to financial or compliance risk.

Best Practices Regarding University-Affiliated Foundation Relationships

1

I. INTI.RINOTDRUOCDTUIOCNTION

A. BaAc.kBgraocukngdround

ThereTihsegrreeaist gdriveeartsditiyvearmsiotyngamthoeng21thUe.T2.1SUy.sTt.emSystem universthitey-daeffvileialotepdmfeonutn,dmaatinoangsermeveienwt, eadndbyexthpeenAddivtuisroeroyf

univerTsaitsyk-aFffoilricaeteodnfoBuensdtaPtiroancsticrevsieRweegdarbdyintgheUniversity-AffiliartedsoFuorcuensdathtiaotnsRupeplaotirot nUs.hTip. sSy(hseteremafintesrtithuetions are

Adviso"TryasTkasFkorFcoer"c).eTohnisBdeisvtePrsriatyctriecfelescRtsetghaerddiinsgtinct genesis adnodnheisintoariemsaonfntehrecsoenosrigsatennizt awtiothnsfe,dtheerairl,usntiaqtuee, and

Univeresiltayt-ioAnffsilhiaiptesdwFitohutnhdeastiuopnpRoertleadtiounnsivheiprsit(iheesr,eaanfdtetrheir varloyicnagl loarwgas,naiznadtiothnaatl tshterufcotcuuresso, fmuinsisvieornssit,y fundraising

the "Tanskd Faossrceet"s).izTehsi.s diversity reflects the distinct

efforts by university personnel remain on funds to be

genesSisomaneduhniisvteorrsieitsy-oaffftilhiaetseed oforguanndiaztaiotinosnso,ptehreaitre under a detaaidlemdimnisetmeroerdanbdyutmheouf unnivdeerrssittya.nTdhinegUw.itTh. System also uniquecorneslaidtieornasbhleipgsuwiditahntchee, csoulplapboorrteadtiounn,iavendrseitiveesn, adniredct assissthaanrceesfwroimth tihtseinsustpitpuotirotends uannidvetrhseitya.ffOilitahteerds foundations their voapreyirnagteobrgyawnaizyaotifoangarlesetmruecntutsreosr, bmyilsaswiosntsh,at provide little iansthpeecwiaalyoobflidgealtiinoenattoinmg athinetareinlatthioensphuibpl,icd'suttieruss,t.

and asasnedtsshizaeresd. objectives between the foundation and the affilWiatheedthuenrivaerusnitiyv.eSrsoimtye-acffoilniadtuecdt fsoigunnidfiactaionnt is dependent

Somefuunndivrearissiintyg-aafcfitliivaitteieds ffoour nthdeataioffnilsiatoepdesractheouonlsd, einrvest their fuonndtshewiathffiTliahteedUnuinvievresristyityo,f iTnetexradseIpnevnedsetmnet,notr fully a detaMileadnamgeemmoernatnCdoummpoafnuy,nadnedrsktaenedpindgetwaiiltehd and transparentinrdeecoprednsdoefntth, eitisr daectliiboenrsataiorensneacnedspsraorcileysbsoeusn. dSoinmtehe considsehraarbelestgauffidaanndcoef,ficceolslapbaocreatwioitnh, tahnedaeffvileianteddiruencitversity. Otphuebrslica'sreewyehotollythaeutsounpopmoortuesdwuinthivreersspiteycat ntodtthoethe assistaafnficlieatferdomuntihveerssuitpy,paocrtteindgusntriivcetlrysiatys. iOndtheepresndent, private foreupnudtaattiioonnsowf itthheaeunntiiqreueUm. Tis. sSioynstetoms.uWppitohrot uat srienggalerd operaitnesbtiytuwtioany aonf dagwriethemveernytslittoler bdyirleacwtsintvhoaltvepmroevnidtefrom that intsotitthuetiodnegortheeerothf alengaanl nseupaal rreaqtiuoensatsndfoirnfduenpdeinngd.ence,

little inThtheeUw.aTy. Sofydsteelimne'sautinigvethrseitrye-laaftfioliantsehdipf,oduuntdieasti,ons reflectetahcehduisntiivnecrtsivitey-caoffniltiraibteudtiofonusnodfatthioenir sfohuonudlderdse,monstrate

and shdaorneodrso,bajencdtivvoelsunbteetewreterunstheesfo, umnadnaytionf wahnodmthaere univertshitey hailguhmensit, lseuvpeplsoortfearsc,caonudntbaubsilintyeassndantrdansparency

affiliatceodmumniuvneirtsyitlye.aSdoemrse. TchoendTuacstksFigonricfiecarenct ofugnndizreasistinhgat the inwdheipleenadlseonscaefeagnudadrdivienrgsidtyonoof rthperivUa.cTy. aSnydstpermop'srietary

activitaieffsilifaotretdheunaifvfeilirastietydfsocuhnodoaltsio, ninsviessat tghreeiratfusntrdesngth, one thbaut suinieqsuseliynfroerfmleacttisona.nd serves the System's

with TmheisUsinoinvearnsditycoomf TmeuxansityI.nvestment Management

The U. T. System is not alone in recognizing that

CompAatntyh, eansdamkeeetpimdee,taaislead paunbdlictraennstiptyareennttrurestceodrdwsith both prtiovastuepapnodrtpthuebldicivfeurnsditsy, athnedUin.dTe.pSeynsdtemnc'se of its

of thegirodveelribneinrgatbioonasrdanhdaspraocreesspsoenss. iSboilimtyetosheanrseusretatfhf at the deuvneilvoeprmsiteyn-ta,ffmiliaanteadgefomuenndta, taionndse, xapsewnedliltuarsetohfe System's

and ofrfeicseousrpcaecsethwaitthstuhpepaofrftilUia.teTd. Suynsivteemrsiitny.stOituthtieornss are done iinnsatitmutaionnnaelrinctoengsritsyt,eint tiswnitehcfeesdsearrayl,tsotadtiesc, oavnedr and

are whloocllayl alauwtosn, oamndouthsawt itthherefoscpuesctotfoutnhiveearsffiitlyiaftuenddraising effoinrtsstibtuyteunbievsetrspirtaycptiecressonrengeal rdeimngaiunnoivnefrusnitdy-saffiliated

univertsoitby,eaacdtimnginsisttreicrtelydabsyitnhdeeupneinvdeersnitt,y.pTrivhaeteU. T. System alsfoousnhdaaretisonwritehlaitsioinnsshtitpusti.oAncsroasnsdtthheecaoffuilniatrtye,dpublic

foundafotiuonndsawtioitnhsaausnpiqeuceiaml oisbsliigoantitoonstuopmpoaritnatasinintghlee public's triunsstt.itWutihoentshearrea iunncirveearssiintyg-layffrielilaytiendg foonunadffailtiaiotnedis

institudtieopneannddenwtitohnvtehrey aliftftilleiadteirdecutniinvveorslviteym, ienntetrfdroempetnhdaetnt, or fuolulyndinadtieopnesntdoefnots, tietsr acctuioltnusrearoef npehcileasnstharroilpyyb, orauinsde

instituitniotnheotphuebr ltich'asneaynentuoatlhreeqsuupepstosrtfeodr fuunnidveinrgs.ity and to the rperpivuatatetiosnupopf othrte, feonrgtireepUu.bTli.c-Spyrsivtaetme.pWarithnoeursthips

The Ur.eTg.aSrdystotetmhe's duengivreersoityf -leagffaililastedpaforautniodnataionndsindependencteh,aet afacchiliutantieveernsittrye-parfefinliaetuerdiaflovuenndtuartieosn, sahnoduslderve

reflectdtehmeodnistirnactetivtehecohnigtrhibeustiolenvseolsf othf eaicr cfoundtaebrsili,ty and transapsaarednvcoycawtheisleinalssuopspaofretgoufaprudbinligc dhoignhoerrperdivuaccaytion.

donoras,ndanpdrovporliuentateryerbturusisnteses,inmfoarnmyaotfiownh. om are

The U. T. System is supported by a diverse group

univerTshitey Ual.uTm. nSi,ystuepmpoisrtenrost,aalnodnebuinsirneecsosgnainzding that to suppoorft athffeiliadtiveedrsfoituynadnadtioinndsetpheant dpelanycea ovfitiatsl role in

commuunniivtyerlseiatyd-earfsfi.liaTtheed TfoauskndFaotriocnesr,eacsogwneizlleassththaet System's insustpitpuotirotinnagl itnsteggroriwtyt,hitaisndnecxecsesllaernycetoodviescr omvaenr yanydears.

the indinesptietuntdeebnecsetapnradcdticvesrsrietygoafrdthinegUu.nTiv.eSryssittye-maf'fsiliated foundTahtoiounghretflualtieoxnasmhiipnsa.tiAocnrosf scuthrreencot ufonutrnyd,aptuiobnli-cinsti-

affiliatiendstuitnuitvioenrsitayrefoiunncdreaatisoinsgliys raelgyrinegatosntraefnfiglitaht,eodnfeoundationtustitonforestlaetrioancsuhlitpusre, idoef npthifiilcaantihornopoyf,ersatiasbelipsrhiveadtebest

that usnuiqpupeolyrt,refoflregcetspaunbdlics-perivveastethpearStnysetresmhi'pssmthisastiofancilitate enptreapctriecneesu, raianldvceonntusrideesr,aatniodnsoefrwveayass faoduvnodcaatitoens-insti-

and coinmsmupupnoityrt. of public higher education. The U. T. System istusutiopnpopratertdnebrysahipdsivecarsnebgerosutrpenogf tahfefinliaetdedwill help both

At thefosuanmdeattiiomnes, tahsatapplauyblaicveitnatlitryoelenitnrussutepdpowrittihng its growth atnhde eUx.cTe.llSeynscteemov'serinmstaitnuytioynesarasn. dThaoffuiligahtetfdulfoundations both perxivaamteinaantidonpuobf lcicurfurenndtsf,otuhnedUat.ioT.n-Sinyssttietumti'osn relationshipsa, didveanntcifeictahteioirnmofisessiotanbsliasnhdedenbseusrteprthaectyicoepse, rate with the governainndgcboonasriddehraastioanreosf pwoanyssibfioliutyndtoateionns-uinresttihtuattion partnershfuipllsaccacnoubnetasbtrielitnygothweendedtowthillehpeulpblbicothetyheseUr.vTe.

System's institutions and affiliated foundations advance their missions and ensure they operate with the full

accountability owed to the public they serve.

Best Practices Regarding University-Affiliated Foundation Relationships

2

B. Charge to the Task Force In November 2012, the Board of Regents Chairman Wm. Eugene Powell established the Task Force to "assure that relationships between the U. T. System institutions and the U. T. System and affiliated foundations are optimally structured to serve as a national model for public universities for the best management, compliance, and oversight practices."

For the purposes of this review, university-affiliated foundations are defined as Texas nonprofit trusts or corporations whose sole, primary, or operationally significant purpose is to provide financial support to a U. T. System institution (see Appendix A for the complete list of foundations affiliated with University of Texas System institutions considered in this review).1

In accordance with the Chairman's charge (see Appendix B), the Task Force included in its research and deliberations identification of best practices in seven key areas of university-foundation management, including:

1. Best structures for affiliated foundations/university interactions and reporting. 2. Ideal location of and staffing for foundation offices. 3. Methods for requesting, record-keeping, and provision of funding for university support to assure

no impermissible direct benefits to U. T. employees. 4. Overlaps in foundation and university fundraising. 5. Compliance with current legal requirements concerning conflicts of interest and tax issues. 6. W ays to enhance delineation of university and foundation activities to reduce confusion or ambiguity. 7. Ways to ensure alignment between university-affiliated foundations and university missions.

C. Work of the Task Force Since November 30, 2012, the Task Force has convened twelve times and reviewed the general practices, organizational documents, and operations of 21 university-affiliated foundations with the goal of identifying opportunities for improvement and best practices. Task Force members also interviewed U. T. presidents from institutions with one or more affiliated foundations and received testimony from university-affiliated foundation principals and key staff members, as well as Assistant Attorney General of Texas Susan Staricka and Princeton University General Counsel Peter McDonough. (See Appendix C for a list of meetings and individuals who presented to or were interviewed by the Task Force.) The Task Force engaged a number of national experts, including David Bass of the Association of Governing Boards of Universities and Colleges, and Dr. Jeffrey Cain of American Philanthropic, LLC, a national philanthropic consulting firm. Finally, it reviewed key articles, research, and publications regarding best practices for university-affiliated foundations. The Task Force reviewed the materials included in the Appendices (see page 13) and discussed findings in the Texas State Auditor's Report on the Cancer Prevention and Research Institute of Texas (see Appendix K).

1 A s they are independent entities whose primary or operationally significant purpose is to provide financial support to a U. T. System institution, The Sealy & Smith Foundation and the Southwestern Medical Foundation were both included in the list of foundations considered in this review.

Best Practices Regarding University-Affiliated Foundation Relationships

3

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download