A University Foundation Comes Under Fire. And For Good Reasons, Too

The University of Connecticut Foundation is in the middle of a big controversy that is likely to come to a head in 2015. Over the past years, many efforts have been made to require the foundation to be more transparent. There is great interest inside and outside of Connecticut as to how the foundation raises and spends millions of dollars each year. Currently, 5 bills are pending in the Connecticut legislature aimed at opening the curtain behind which the foundation operates.

For some reason, there is a state law in Connecticut which expressly exempts the university foundation from Freedom of Information Act requirements. While donors may request anonymity, it is highly unusual for a charity to operate in such secrecy. The Office of Legislative Research, the nonpartisan research arm of the Connecticut General Assembly, indicates that UConn is the only New England state that provides this protection to the fundraising arm of the state university.

Various recent foundation transactions have drawn criticism from Connecticut legislators. The foundation recently raised the compensation of its president by 60 percent, including a salary of approximately $300,000. At the same time, the foundation decided to continue to pay its former president through June of 2014 even though he retired in June of 2013.

The foundation also paid Hilary Clinton $251,000 to speak at the university last April. Some or all of these transactions do not sit well with some Connecticut legislators concerned with tuition levels and other costs.

UConn raised $63 million in the academic year ended June 30, 2013 and $81 million the following year. The university leads fundraising efforts among the New England public universities. The foundation is pushing back and is nervous about any legislation that might result in wider public access to the organization’s records. I am always wary of people afraid of greater transparency.

Donors who share the concerns of the legislators, rather than make donations directly to the uiniversity foundation, may instead donate their money into donor advised funds or charitable trusts. Using these philanthropic vehicles, the donor is able to take a tax deduction for the full amount of their contribution, without giving any funding to the university until future years. In addition, if the donor becomes disenchanted with the university sometime in the future, annual donations from the donor-advised fund or the charitable trust may be directed to charities other than the university.