Published May 5, 2014
Since its formation more than 50 years ago, the University at Buffalo Foundation (UBF) has helped support and advance the mission of UB through efforts to manage gifts and grants on behalf of the university, among other benefits.
In an effort to provide greater transparency and clarification on how UBF works with the university, Laura Hubbard, UB’s vice president for finance and administration, and UBF Executive Director Ed Schneider met with the UB Faculty Senate Executive Committee on Wednesday.
Hubbard and Schneider spent nearly two hours talking about
UBF’s history, governance structure and finances, in addition
to answering questions from the executive committee. Click
here to see the PowerPoint slides featured in the
“I know transparency is of interest to all of us,” Hubbard said, noting that “90 percent” of the material used in her presentation came directly from the UBF website. She pointed out that there is “more transparency around the financials of UBF” than at many state and public agencies.
Public university foundations date back to the late 19th century. UBF began in 1962 when the private University of Buffalo merged with SUNY and became the public University at Buffalo. The vast majority of public colleges and universities today rely on the assistance of private foundations to support their missions, Hubbard noted.
UBF serves a variety of important functions, including:
As a private entity, UBF also allows UB to be more flexible and nimble with certain transactions while still following UB and SUNY guidelines. The university’s acquisition of land for the new School of Medicine and Biomedical Sciences in downtown Buffalo, which is the largest construction project in that area in decades, would have taken significantly longer if UB had to proceed with the property acquisition through New York State instead of through UBF, Hubbard said.
UBF is governed by a 20-member board of trustees — all identified on the UBF website — who can serve up to two consecutive three-year terms. There are five ex-officio positions held by UB administrators, four of which are non-voting. The president has voting authority on the board. In addition, a 13-member board of directors advises the trustees. All of these are nonpaid volunteer positions.
Most UBF activities are managed by six smaller corporate entities designed to manage risk: UBF Activities, UBF Services, UBF Corp., FNUB, UBF Incubator and UBF Faculty-Student Housing. “Isolating risk is the reason we have multiple corporations,” said Schneider, the UBF executive director.
UBF operates in a manner consistent with the policies of the SUNY trustees and UB, but its trustees and directors are independent of SUNY in their fiduciary responsibilities.
UBF also manages three types of gifts to UB:
Donor privacy remains one of the most important reasons to keep some of UBF’s records private, Hubbard said. “Our ability to fundraise would be hampered if we did not have that mechanism.”
As noted in the consolidated financial statement posted to the foundation website for the fiscal year that ended June 2013, UBF controls nearly a billion dollars in assets that help support the mission of UB.
Hubbard emphasized the importance of properly using UB Foundation funds. “We should never be trying to do things through UBF that we really should be doing on the university side. We work collaboratively with UBF to make sure that the things we’re doing and processing on the university side are appropriate for (a public university) and we’re not doing things on the UBF side that really should be coming out of the university.”
In response to a faculty member’s question about what polices ensure that a gift is being used how its donor intended, Schneider said, “Every endowment has a deed of gift or some sort of evidence of what the donor’s restrictions were. We’ve got that stored electronically and available for the administrator of each endowment available to the unit. It should be the role of UBF to make sure expenditures are consistent with the deed of gift.”
Some executive committee members noted that states such as California and Iowa have passed legislation requiring that the records of foundations that support public entities be made public.
Hubbard noted that these states excluded many records from public disclosure — including donor records and various types of trade secrets — and pointed out the downside of such an approach without these protections in New York and with UBF, which in 2012 was found to be a “private entity” in a ruling by the State Supreme Court.
“Once you decide to start making some records available, then anybody can make the argument that everything you have, you’ve now made available and what you don’t have in these other states that we’re talking about — they excluded a lot of things,” Hubbard said. “You don’t have that legal protection.”
Ernest Sternberg, who chairs the Faculty Senate’s Academic Freedom and Responsibility Committee, said the issue of transparency merits further discussion. “There’s a great advantage to transparency. I should also say there are dangers to transparency from a personal privacy and freedom point of view,” he said.
Your report on the UBF meeting is not merely anodyne. It is, in fact, a tissue of obfuscation:
"Some executive committee members noted that states such as California and Iowa have passed legislation requiring that the records of foundations that support public entities be made public. Hubbard noted that these states excluded many records from public disclosure, including donor records and various types of trade secrets, and pointed out the downside of such an approach without these protections in New York and with UBF, which in 2012 was found to be a 'private entity' in a ruling by the State Supreme Court."
"Once you decide to start making some records available, then anybody can make the argument that everything you have, you've now made available and what you don't have in these other states that we're talking about, they excluded a lot of things," Hubbard said. "You don't have that legal protection."
As was pointed out to VP Hubbard, the NYS FOIL law precisely does exclude "trade secrets" and some information about donors (like addresses or contact numbers), and members of the Budget Priorities Committee at the meeting said, quite specifically, that they would be happy to carve out a donor-name exception for all those donors who wished to remain anonymous. Under these conditions, it's difficult to understand what VP Hubbard (and the Provost, who echoed her comments) might have meant by "once you decide to start making some records available, then anybody can make the argument that everything you have, you've now made available...."
The fact is that the university just doesn't want the faculty and the general public to know on what UBF is spending the university's monies. Why?