No Taxpayer Dollars For Private University Foundations

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Yesterday the legislature heard from the alumni of several of the state’s universities speaking in favor of legislation providing matching tax dollars for contributions made to the university foundations.

“House Bill 1204 would contribute $1 from the state for every $2 generated by the foundations,” reports the Grand Forks Herald. “There would be a cap of $10 million in matching grants for the University of North Dakota and North Dakota State University and $1 million for the other nine campuses.”

This would be problematic in a major way.

First, these funds aren’t transparent. Coincidentally, I had put in an open records request for financial statements from the North Dakota University System foundation and was told by Director of Communications Linda Donlin that the records aren’t public. “Please note those records are not subject to North Dakota’s Open Records Law because the foundation is not a public entity as defined at N.D.C.C. 44-04-17.1,” Donlin wrote me in an email citing NDUS’ general counsel. “It is a private, non-profit foundation that carries out non-governmental functions and is funded by private contributions.”

Are the taxpayers to be expected to dump money into these slush funds without any way for the public to see how the money is being handled?

Second, it seems to me that the legislature already spends money in support of the universities. These are called appropriations. The university foundations are supposed to exist to provide additional revenues for the universities in addition to what taxpayers fork over and students pay. The foundations, in fact, are supposed to help defray the cost of the universities for both taxpayers in students. Unfortunately, it seems they’re more often used to pay for perks for university administrators, or for decidedly non-academic purposes such as sports programs. Regardless, pouring taxpayer money into these foundations would defeat the purpose of the foundations.

Third, let’s remember that foundation money has in the past been used for explicitly political purposes. During the food-fight over the Fighting Sioux nickname funds from the UND foundation were used in a deep-pockets campaign against nickname supporters. State law defines supporting or opposing initiated measures as a political purpose. In the future, would these funds be used for additional political purposes? Probably so. Perhaps especially so given the aforementioned problems with transparency.

North Dakota’s universities are lavishly financed by the taxpayers already, what with the university system having enjoyed a 150% increase in funding since the 2003-05 biennium (assuming Governor Dalrymple’s budget recommendations for the coming biennium pass).

There is no need to funnel additional money into these foundations. The legislature should support the universities through appropriations, and we can have a debate about how much appropriation is prudent, but giving money to these foundations would be an extremely inappropriate use of taxpayer dollars.

Rob Port is the editor of SayAnythingBlog.com. In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters. He writes a weekly column for several North Dakota newspapers, and also serves as a policy fellow for the North Dakota Policy Council.

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  • WOOF

    There goes the university foundation studies of Crustaceon preparation,
    autopsies and nutrition.

    Are people to pay for their own lobsters ?

    • http://sayanythingblog.com Rob

      Haha.

  • http://Sayanythingblog.com The Whistler

    the foundations are set up and promoted by the universities.

    But if they want to be private we should take the schools off of the public doles. I’m willing to support the kids, but not a bunch of overpaid, underworked bureaucrats.

    • http://sayanythingblog.com Rob

      If they’re set up and promoted by the universities, then why are their finances not public record?

      I have a complaint to the AG’s office pending on that question, I guess, but it seems to me that public support for the universities should come through the traditional legislative process.

    • http://sayanythingblog.com Rob

      the foundations are set up and promoted by the universities.

      Yes, that’s true, but they’re intended to solicit private dollars. They weren’t intended as a landing pad for more taxpayer dollars.

  • John_Wayne_American

    But gee, if the state helped the foundations, the foundations could help keep the NDSU bird in the air instead of having to sell it.

    Maybe they could use the extra foundation money to hire a full time Butler, Cook, Chauffeur, Masseuse and Yoga instructor for the President and his family at the Mansion.

    Oh, yes, with a bit more foundation money, we could build a Nice house for the Chancellor too! after all if his job is to be above all these lowly college presidents, than shouldn’t he be allowed a nice place to live too?

    Maybe its time we pass a bill limiting these “Private Foundations” on what they can donate to, as far as our higher ed goes. I’d start with buildings and tuition scholarships . After that the money has to go directly into the state Higher ed budget.

    • http://sayanythingblog.com Rob

      Maybe they could use the extra foundation money to hire a full time Butler, Cook, Chauffeur, Masseuse and Yoga instructor for the President and his family at the Mansion.

      They could! If only the taxpayers would match donations….

      Why do we want to deprive our poor, poor university system administrators?

  • NDSiouxFan

    Rob – A portion of the tax return that is filed by foundations is a public record. You should be able to request a copy of the Form 990 from the IRS.

    • http://sayanythingblog.com Rob

      Yeah, but the Form 990 doesn’t give me what I was looking for. I wanted transactions, deposits and withdrawals.

  • reggy

    I like how you didn’t discuss the limitations on these dollars. Really makes it sound like a free cash grab and not what it actually is, a method in which 2/3rd of academic construction costs are paid for via private dollars and not tax revenue.

    • http://sayanythingblog.com Rob

      What limitations are there on these dollars?

      There was certainly no limitation on using them for political purposes this summer.

      There’s no limitation on using them for the sports programs. I just got in an open records request for NDSU dollars used to promote fan attendance at the Bison national championship game. It came to $1,200. The rest? From the foundation, which I’m not allowed to access because the university has declared those funds not public record.

      You don’t see this as problematic?

  • RCND

    We need to have Open Records laws changed to include private foundations that benefit public entities.

  • ND Observer

    I am all for state match on private donations to university foundations, providing they are for student financial aid, more faculty and new academic buildings – but not for sports, perks for administrators, or for god sakes more administrators on campus or in the Chancellors office – no more bureaucrats!

  • HideFromObama

    The foundations operate on privately donated funds, so who cares (beyond those who actually donate) how it’s used? I don’t donate to the NDSU foundation because I don’t like not knowing where my money goes. I also don’t donate to the NDSU Alumni Assocation for the same reason. If I give money, it will be walking into the department chair’s office of my choosing and saying “Here is a check. Use it for this, this, and this” You start donating to the “big picture” groups and your money goes to build big fancy expensive Alumni Centers and president’s houses and other such luxuries while the students who you want to be sharing with get nothing of it.

  • HideFromObama

    To finish what I started: My point is, the State should NOT be matching funds to the foundation accounts as then you would lose State money transperency. But to villify the college for using a private donation foundation to avoid either tuition hikes or more Legislature posturing is just smart operating-as I said, I don’t donate to those types of funds because I don’t like what the money usually gets spent on. I have that choice. State funds, I don’t have that kind of direct choice. Given the opinions on this board about the State spending too much on higher ed, wouldn’t you support private foundation donations to be funding our universities primarily? So if NDSU needs more money, go to your foundation, not the State, correct?

  • ec99

    A number of years ago a bill was introduced which would subtract a dollar from legislative appropriations for every private dollar donated. I believe it died in committee.

  • Lynn Bergman

    This is the legislation that former UND President Kupchella said was forthcoming three or four years ago at a UND function in Minneapolis…I was there! Hoeven started it!
    This is complete idiocy and MUST be stopped; help us everyone, please! Show up at the session and kill it dead!

  • Sunshine

    As one who believes we need a strong University System that can oversee the excesses of the individual institutions I find this bill problematic. While I believe having a matching fund to encourage contributions of value, having the state funds go to a foundation without transparency of use is not acceptable.

  • Mike

    I support more higher ed funding, but you have a point on this.

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