ISU Foundation officials and open-records advocates have been grappling for years with whether or not the Foundation’s financial and donor records should be open and accessible to the public.

The Foundation hopes to ease tensions with its release of a new policy that states exactly what is open, what is not and why.

“The philosophy of the [Foundation Board of Directors] is to be as open as possible while honoring the privacy of our donors,” said Phyllis Lepke, Foundation vice president of communications. “The public information policy … is one way for the Foundation to show its many stakeholders that it operates in a manner that engenders trust, shows accountability and has a significant positive impact on the institution.”

Lepke said the Foundation’s board of directors has developed a formal, comprehensive information policy in response to recent questions about openness and accountability.

The new policy will test information requests against privacy constraints and competitive business constraints.

“We listened, we heard and we recognized that we needed to do a better job of explaining the important work of the ISU Foundation in assisting Iowa State,” said John Lawson, chairman of the Foundation Board of Directors.

The Debate

At the heart of the debate is the question of whether or not public university foundations are government entities, which are subject to Iowa open-records laws.

The ISU Foundation describes itself as “a private, nonprofit corporation and, as defined in the contract for services with Iowa State University, the organization designated to secure and manage private gift support to benefit ISU.”

During the last two years, Lepke said, legislative efforts have called for more openness in university foundation records, but those bills have died in committee.

She said a lawsuit filed in August against the Foundation will be the test.

“That’s the question that’s being asked in this lawsuit that was filed,” Lepke said. “Is the ISU Foundation a government body? Or, even if it isn’t, does it have records that relate to university funds that should be public?”

Lepke said the legislation in Iowa for open records does not specifically point to university foundations and state that they are covered.

“Laws are written and then they are tested in court and that’s what’s happening here,” she said.

Many groups, including The Iowa Freedom of Information Council and the Iowa Newspaper Association, insist foundations are public bodies that were created to raise public money in the name of the state universities, said Kathleen Richardson, executive secretary of the Iowa Freedom of Information Council, in an e-mail.

“The foundations are avoiding the accountability that citizens demand of their government agencies,” she said.

Lepke said the lawsuit and public information policy are two different things.

“Whether or not we have a public information policy will not change the interpretation of Iowa law,” she said. “We choose to have a public information policy. And we’ve been moving forward with it even though there is a lawsuit pending.”

Lepke wants to make clear that this lawsuit is not about any malfeasance, but rather interpretation of law.

She said the Foundation had discussed developing a new open records policy prior to the lawsuit.

Lawson said staff had difficulty determining what to release when someone requested information.

“It became apparent we did not have a well-stated policy,” he said.

The board then formed a committee to review documents, policy and procedures pertaining to donor relations, Lawson said.

Lepke said the board had the staff present it with lists of the types of information staff hold. That information was then categorized.

The board devoted its summer meetings to developing a policy, Lepke said.

Lawson said the staff and board worked extensively to develop a policy and make a main goal clear.

“What the board did was establish a philosophy statement that essentially says their goal is for us to be as open as possible,” Lepke said.

During meetings in September and November, the board finalized the policy and released the new, comprehensive public information policy on Dec. 4.

The Policy

Under the new policy, Lepke said when the Foundation receives a request for information, they will test it against two constraints: privacy constraints and strategic and competitive business constraints.

“When we’re not able to be as open as possible, it may be for one of those two reasons,” she said.

Lepke said privacy constraints include donors’ financial and biographical information.

“Most people would agree that there is certain information that we can reasonably keep private out of respect for our donors,” she said.

Lawson said he thinks most people will agree with this.

“A vast majority of information will be open and things not open are things most people see as appropriate to be closed,” he said.

Strategic and competitive business constraints include campaign plans, meeting agendas and minutes and lists of prospective donors.

“This information is not disclosed because it would have an impact on the competitive advantage we might have as a fund-raising organization,” Lepke said.

Included in the list of information the Foundation does release are tax forms, summary of the operating budget, bylaws, employee and board member information, audited financial statements, annual reports and investment information. The Foundation releases some information because law requires all charitable organizations to do so and voluntarily discloses the rest, Lepke said.

“The largest [amount of information the Foundation discloses] by far is the information that we can voluntarily decide to disclose,” Lepke said. “It’s not required but we might choose to do that.”

The new policy also allows for accountability with a bench-marking survey and a regular review of the policy with a public comment period.

“A step we haven’t taken before is to be sure to explain to the public that if we can’t give them the information, why we feel we can’t, and it’s something where even if they don’t agree they can understand the reasons,” Lepke said.

Lepke said the goals of this formal, comprehensive policy are to build trust, to become more accountable and to establish or maintain a level of excellence.

Questions Remain

Lepke’s job has been to present this new policy to the public and interested parties such as the Iowa Newspaper Association, the Iowa Freedom of Information Council, and the ISU Government of the Student Body, Alumni Association and Faculty Senate.

“The board directed us to go out and give the information to as many people as we could — champions and critics — and to seek their input,” Lepke said.

One critic has been Bill Kunerth, open-records advocate and former ISU journalism professor. While Kunerth is pleased with the progress being made, he still has concerns.

“Those of us who are interested are concerned about one thing and that is having access to individual financial transactions,” he said.

Kunerth would like to see the Foundation disclose how much it spends for hotel rooms, food, travel and other expense information. He said the Foundation could keep duplicate vouchers or receipts — one public document showing the amount spent with any donors or potential donors names’ blacked out and the other being the Foundation’s confidential record.

“Access to individual business transactions is the key to genuine financial accountability,” he said.

Kunerth also said he and other open-records advocates understand the need for donor privacy.

“We have ever since we’ve begun this gone along with protecting donors, and that’s the basic reason they give for wanting to maintain secrecy,” he said.

Kunerth said in states where university foundations are under open records and meetings laws, directors have had no problems with concerns of contributors or potential donors.

“There’s no reason not to make these things available,” Kunerth said. “It will improve the credibility of the Foundation and encourage donors.”

Another concern Kunerth has is the permanence of the policy.

“What’s to prevent the next board of directors from saying, ‘Well, we don’t agree with these policies’?” Kunerth said.

Lawson said because the board is set up with staggered terms, it is unlikely a future board would change the policy.

“In the way the governance of the board is set up, it would be difficult but not impossible to change,” he said.

Kunerth said he is optimistic about the work of current Foundation officials.

“We are encouraged by what appears to be a change in philosophy in the Foundation,” he said. “They understand the need for openness — we just don’t agree on the degree of openness now.”

Richardson agreed and said most members of the Freedom of Information Council are pleased with the policy.

“The overall opinion is positive in that the Foundation is eager to talk with us and set up a policy,” he said.

Bill Monroe, president of the Iowa Newspaper Association, also commended the Foundation for its efforts.

“We applaud the forward direction the policy has taken,” he said.

Monroe said great progress has been made, compared to what the policy was, but he said he still believes more can be done.

“We’re hoping they will make more information available,” he said.