Legislative Committee Deals Blow
Two legislative provisions that would have affected UConn and other public universities in the state did not make it out of the Legislature’s Committee on Higher Education and Employment Advancement Committee last week.
The first bill would have frozen tuition for the next academic year at its current levels. The second would have subjected private, non-profit foundations – such as the University of Connecticut Foundation – that serve public colleges and universities to biennial audits by the Auditors of Public Accounts and required their volunteer boards of directors to submit information about their financial holdings to the state Ethics Commission.
Proponents of the tuition freeze had argued that public education in the state was becoming unaffordable for increasing numbers of Connecticut families.
“It was clear that an overwhelming number of legislators recognized that Connecticut public higher education is one of the state’s greatest success stories,” says Alvin Wilson, director of governmental relations. “They recognized that UConn is experiencing record demand, record enrollment, and is having the most qualified and diverse entering classes in our history. It is also clear that, compared to public universities in the Northeast, UConn is ranked among the top in academic quality but is in the bottom half in terms of cost. We provide a tremendous value for families.”
The foundation bill was designed to subject private foundations to public audits, even though they are independently audited each year and those audits are provided to the Auditors of Public Accounts. The proposal would have also required the volunteers who serve on the private, non-profit foundations’ boards of directors to file with the state Ethics Commission financial reports detailing stock holdings, mortgages, and other information.
That information is now required of high-ranking public officials. However, it is clear that providing such personal information would be a deterrent to finding volunteers – who provide investment expertise and help in soliciting donors – to serve on foundation boards.
The legislative committee also considered having state audits only of state funds, which are provided as a match for endowment funds raised. But that proposal died in a tied vote.
“This bill was spurred on by stories in The Hartford Courant,” Wilson says. “But clearly the success of the Foundation at UConn – where the endowment has grown from $49.5 million in 1995 to $252.4 million in 2003 – is due in no small measure to the fact that the Foundation is private, and donors feel that their financial information will remain confidential.”
The Courant’s story on March 21 contained several significant errors and led to a retraction and clarification in the March 23 paper.
UConn’s fund-raising program was given a jump-start in 1995, when legislators encouraged the University to aggressively raise private funds by enacting the state Endowment Matching Grant Program as part of UConn 2000. Today, the program provides a match of 50 cents for every $1 contributed to endowment for scholarships, professorships, or program enhancements.
“Virtually every land grant public university in the country is supported by a private, non-profit foundation which provides primary fund raising and private asset management for its university,” says President Philip E. Austin. “This works because private fund raising is not normally the province of state government. At UConn it has been extraordinarily successful: the UConn Foundation’s sole purpose is to support and enhance the University.”
Members of the Foundation’s board of directors, many of them alumni and also private sector financiers, sign a statement that they will reveal any potential conflict of interest when acting as a board member. In addition, Foundation employees are subject to rules concerning ethical behavior.
The legislative session ends in June. “Although the provisions died,” says Wilson, “the issues may remain in play until the session ends.”