Regent, foundation interaction in spotlight

Michaela Saunders

In recent months, several Iowans have questioned the relationship between the regent university foundations and the universities they serve.

The relationship between the fund-raising foundation and the Board of Regents has also come into question.

These questions appear at a time when the Foundation’s open records policies are being debated in the Iowa Senate and the ISU Foundation and the Iowa Newspaper Association are attempting to reach a compromise.

“The ISU Foundation has always been an independent, private, nonprofit corporation, as are most institutionally-related foundations in the United States,” said Tom Mitchell, president and CEO of the ISU Foundation. “This status allows the ISU Foundation to assure donors that their gifts are separately invested from state-appropriated funds and used according to the donors’ wishes.”

Bill Kunerth, ISU professor emeritus of journalism and mass communication, said the ISU Foundation is distancing itself from the university.

Kunerth said examples include the fact that the university president no longer appoints members to the Foundation’s Board of Directors. Additionally, he said, Iowa State gave $1.3 million each year to the Foundation for salaries until last year. Now the university will pay the Foundation $750,000 for services rendered.

Also, the Foundation is moving off campus.

“Those changes are only cosmetic,” Kunerth said. “There is a symbiotic relationship there because the university and the Foundation are so closely allied.”

Mitchell said the ISU Foundation’s decision to move off campus is unrelated to its relationship to the university. The space has simply become inadequate and there is no space available on campus.

“The Foundation’s physical location does not affect or change in any way its mission or openness,” he said.

Mitchell said the other changes are a result of recent changes to the Foundation’s articles of incorporation. He said those changes will “help assure donors that their private gift funds are separately and distinctly accounted for from state allocations.

“The changes also will ensure that no one person or group of people could change the mission of the Foundation,” Mitchell said.

Others have raised concerns about the relationship of the Board of Regents and the regent university Foundations.

Thomas Hanson, of Des Moines law firm Hanson, Bjork and Russell, L.L.P., said Feb. 6 that the Board of Regents had yet to respond to a letter sent on Dec. 7 to then Interim Executive Director, Robert Barak.

Hanson’s letter was sent on behalf of Des Moines businessman Arlen Nicholls, who could not be reached. The letter explains the relationship between the regent university foundations and the board citing Iowa Code 262.9, which lists the powers and duties of the Board of Regents.

Duty eight reads, “accept and administer trusts and may authorize nonprofit foundations acting solely for the support of institutions governed by the board to accept and administer trusts deemed by the board to be beneficial.”

The Board of Regents responded to Hanson’s letter with a letter dated Jan. 11.

In the letter Barak said, “It appears to me that we have an honest difference of opinion about the relationship of the Board of Regents, State of Iowa, to the foundations of the universities.”

The Board extended an invitation to Hanson to meet with the legal counsels of the universities.

Mitchell described the relationship between the Board of Regents and the Foundation as a coordinating and communication-based relationship.

The ISU Foundation was established as a nonprofit corporation, separate from the university, in 1958.

Mitchell said the Foundation has an annual service agreement, “to secure and manage private gift support and to manage the ISU alumni/donor database. The ISU Foundation raises private gifts to support priorities that are set by the university, not by the Foundation.”

He said as part of that service agreement the Foundation provides a copy of its annual report to the Board of Regents.