The foundations that gather donations in support of public universities exist in a nether-world straddling private and public status. While they are “joined at the hip” with their host universities — often sharing facilities, logos, employees and governing board members — foundations generally are separately incorporated as private, not-for-profit entities rather than government agencies. And that can complicate the job of journalists attempting to gain access to foundation records and meetings.
While private corporations normally are not subject to public-records acts, courts in at least eight states have ruled that the foundations of public universities operate as arms or adjuncts of the state, and must comply with the same disclosure requirements as the universities they support.
Even in states without such friendly disclosure laws — or at private colleges, which normally are exempt from open-records obligations — all is not lost. All nonprofit corporations, including foundations (and athletic associations and hospital authorities as well, hint hint) must file an annual Form 990 tax return with the IRS, and those documents must be made available to any interested member of the public. The Form 990 return discloses the compensation of the highest-paid employees, any insider contracts between foundation directors and the corporation, and other potentially newsworthy information.
Using IRS Form 990 reports and interviews with foundation insiders, reporter Nathan Halverson of the Santa Rosa Press-Democrat documented how the Sonoma State University foundation made inadequately-secured loans to a former foundation director and clients of his finance company. A podcast with Halverson describing his reporting methods is available here, and a webinar with his reporting tips is viewable here.
There is no assurance that your own university foundation’s finances hold revelations quite as juicy as, say, a $42,000 Corvette for the university’s president — but you’ll never know unless you ask for the records.