Updated at 10:53 a.m. CST Feb. 4

DES MOINES — The fund-raising arms of the state’s three universities must make their records open to the public, the Iowa Supreme Court ruled Friday.

The court ruled that the Iowa State University Foundation “is performing a government function, and therefore its records are subject to disclosure.”

The ruling overturned a September 2002 ruling by Judge William Ostlund, which dismissed the case in favor of the foundation.

The Supreme Court said Ostlund’s summary judgment was not proper.

“Successful fund raising and management is a very important, if not vital, function of the modern university and an integral part of its continuing viability. The foundation’s activities support a myriad of university programs, scholarships, facilities, and projects,” the court said.

Arlen Nichols, 75, a retired Des Moines businessman, and Mark Gannon, 47, a former university employee, filed a lawsuit to force the ISU Foundation to open its records.

Nichols and Gannon want the $295.3 million ISU foundation to be subject to the open-records law.

The two were active in a group of donors, alumni and employees that objected when a 240-acre farm near Duncombe, willed to the ISU Agricultural Foundation by the late Marie Powers, was sold against her wishes after her death in 1995.

She had asked that the land be kept as a farm in memory of her husband, who operated a seed company there. Much of the $1.2 million proceeds went to the larger ISU Foundation and was spent on campus buildings and other projects.

After claiming the foundation didn’t produce records they wanted, Nichols and Gannon sued.

Using their own money, small donations from open records advocates, and a $1,000 gift from the legal defense fund of the Society of Professional Journalists, they hired lawyer Hanson and launched the appeal.

Mark McCormick, a former Supreme Court justice and a lawyer for the Iowa Board of Regents and the foundation, argued before the Supreme Court in October that the organization is private and nonprofit and its records should remain closed.

Legal authorities have said the stakes were high for the foundation and others like it at other universities. Such foundations pump millions of dollars into the schools.

If forced to reveal the foundation’s inner workings, ISU officials said, fund raising will suffer and people who want anonymity won’t donate. Besides, officials claim, much of what the foundation does is already available to the public for the asking.