INSIDE IOWA STATE
June 29, 2001
Mitchell says independent foundations are the models
by Debra Gibson
As the ISU Foundation moves toward independence from the university,
special-interest groups are making more noise about the fund-raisers'
practices. Foundation president Tom Mitchell tells Inside where his
organization is headed.
Does the recent action to realign the membership of the Foundation's
board of directors reflect a shift in the fundamental mission of the
No, our vision and mission have not changed. Our vision of the Foundation is
to support ISU's aspiration to become the best land-grant university in the
country. Our mission is to secure and manage private gifts and grants that
support ISU. In this difficult [financial] time the university is
experiencing, private support can be one of the growth areas.
Why does the Foundation want to become a private organization?
Since it was incorporated in 1958, the ISU Foundation has been a private,
non-profit organization. In 1995, a group of university administrators,
faculty, alumni and volunteers reviewed the Foundation's structure and
governing policies. An ad hoc committee then continued looking at the
relationship between the Foundation and the university, studying model
foundations nationwide and their best practices.
When we looked at those models [e.g. foundations at Texas A&M, University of
Kansas, University of Nebraska, University of Iowa], those implementing the
best practices are separate from their institutions. Most of those models
have been in place for quite some time, and they are the models we now are
How many U.S. colleges and universities maintain their foundations
separately from the institutions?
According to the Council for the Advancement and Support of Education, about
80 percent of foundations are administratively independent. The University
of Iowa Foundation has been private since its founding in 1956. While [UI
President] Mary Sue Coleman is a voting member of that board, she is the
only university representative on that board, and she does not appoint board
members. So, the changes our governors made bring the Foundation more in
line with practices across the country.
There are those who say appointing [former ISU vice president] Murray
Blackwelder to the board of governors is compromising ISU's fund-raising
efforts, since he will be leading the philanthropic charge at
Nominations were received in January before Murray was inter-viewing for the
Purdue position. He met the criteria for membership, since he and his wife
Diane are generous contributors to ISU and belong to the Order of the Knoll.
The nominating committee of the board of directors recommended 16 persons
out of 38 nominations.
Once Blackwelder accepted the Purdue position, was there discussion
regarding potential conflict of interest?
There was some discussion, but all of our governors, many of whom are
community leaders active in a variety of fund-raising endeavors, sign a
conflict of interest statement. It was the governors' opinion that Murray
could participate in volunteer leadership activities as a governor.
The biggest issue being raised by some is that of opening Foundation
records. They argue that the Foundation's independence from the university
will keep information from public review. How do you respond?
private funds for academic purposes are processed through the university.
You can go to the Office of the Vice President for Business and Finance and
find out how much money was transferred from the Foundation into what
specific accounts and how the university spent those funds.
The Foundation's tax returns are public documents, and they contain
extensive information about both income and expenditures. The Foundation
audit, which is conducted by a national firm, also is available to those who
request it. Additional information about fund sources, investment returns
and gift designations is included in our annual report, which is available
to any who want it. This information will continue to be available in the
Foundation critics want more specific information regarding
None of our donor records are shared with the public now without donor
permission, and we continue to strive to maintain that commitment. As one of
our donors said publicly, It's no one's business but my own how much I give
and how I give it, the tax consequences, or what's in my will and who are
its beneficiaries. Making this donor information public would harm our
fund-raising efforts greatly. First, the competition for philanthropic
support is extraordinary. If we have to share personal financial information
about individuals, everyone else would prepare to approach them. Second,
donors would stop providing information to us, such as wills or stock
portfolios, which are necessary to develop large-scale, long-term
Haven't open records proponents offered a compromise that would support
I've heard the argument that they wouldn't need names. And yet, the most
tenacious, aggressive efforts I've ever seen came when the Foundation
announced an anonymous $80 million gift. Those donors asked us for
anonymity, and the Foundation continues to honor that request. Others,
especially the press, have worked very hard, and have gone to extremes, to
make an unconfirmed identification of those family members. They did not
respect the donors' wishes.
Is there a compromise to be reached with supporters of open
We have offered to discuss their concerns. First, they need to review what
is already public, and few among the critics have taken the time to do so.
We are more than willing to share as much information as we possibly can,
provided it doesn't harm our fund-raising efforts and it doesn't affect
donor confidentiality. I believe that by opening all records, we would see a
drop in private gift support. It would be compromised in a manner I can't
even think of now. When you look at the current economic climate in Iowa,
and the university's second year of major budget rescissions, I'm saying
that we all ought to be thinking about how we can further strengthen private
gift support, not diminish it.
Is the Foundation accepting less money from the university for its FY
Yes. Our budget for next year will be around $10 million, with $750,000 of
that coming from university funds to cover fund-raising services through a
service agreement. This frees up $450,000 for the university to reallocate
to other programs. (ISU allocated $1.2 million for the Foundation's services
in FY 2001.)
Will the Foundation now be paying all its salaries with private
Foundation staff will be paid with non-public funds. Our revenue streams
come from multiple sources, including unrestricted gifts, the returns on
investments of unrestricted gifts and service fees on accounts.
Are you looking for new office space for the Foundation?
Yes, we have a number of options we're looking at and all of them would free
up much-needed student space in the Memorial Union. We've outgrown our space
in the Union. We currently have 30 employees in rented space at 2300 Lincoln
Way (Campus Book Store building). Because we anticipate that the university
will continue to ask us to increase the level of private gift support, our
staff is expected to grow.
Where are you looking?
We're reluctant to share that information because we lose our competitive
advantage to purchase a facility at a price below market value when that
facility is named in the newspaper. But I will say we have set no timelines
or deadlines for this move.
Will the ISU Alumni Association be moving with you?
The Foundation's board has encouraged us to pursue a facility that can meet
the needs of both organizations, and we would very much like to be in a
facility that also houses the ISU Alumni Association. The Association's
board is evaluating the Association's future space needs.
Are you considering constructing a new alumni/foundation center?
No, it's not feasible at this time to consider a new center. Raising $10
million or more for an advancement center when the university students,
faculty and staff have so many needs would be inappropriate. Our goal is to
support the university that is our first concern.
Ames, Iowa 50011, (515) 294-4111
Published by: University Relations,
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