CUNY to “Rein In” its Foundations with New Procedures!

Dear Commons Community,

The City University of New York announced yesterday that it would be “reining in” foundations that have been established at its colleges in an effort to provide broader fiduciary oversight on private giving.  As reported by the New York Times:

“The City University of New York, troubled by federal and state investigations, plans to overhaul the rules governing its affiliated nonprofit foundations as part of an effort to reassure alumni and donors.

If adopted, the guidelines would give CUNY, the largest public urban university in the country, more control over a sprawling network of more than two dozen funds that last year gave $250 million to the university and collectively have more than $900 million in assets, according to tax records. The New York Times obtained a draft of the new rules.

The changes are being proposed as federal prosecutors in Brooklyn expand their investigation into several CUNY foundations, including two associated with the City College of New York, the university’s flagship school, for their handling of federal research money and personal expenses.

The former president of City College, Lisa S. Coico, resigned abruptly in October after The New York Times contacted officials with questions about more than $150,000 of her personal expenses, which had improperly been paid by the CUNY Research Foundation. A memo concerning her expenses seemed to have been fabricated, apparently to deceive prosecutors.

In recent months, prosecutors have subpoenaed records related to the presidential discretionary funds of all CUNY schools, not just City College.

Donations to City College’s main fund-raising arm, the 21st Century Foundation, are on track to be significantly lower this year, according to budget documents, reflecting unease among alumni and potential donors.

The new guidelines were still being ironed out, and were subject to last-minute changes. They are part of a package of administrative reforms to be voted on by CUNY’s trustees, most of whom have been appointed by Gov. Andrew M. Cuomo, at their June 26 meeting — the last one before the next academic year.

When asked about the guidelines, James B. Milliken, CUNY’s chancellor, confirmed that they were intended “to ensure transparency and accountability” to give “people confidence in the administration and governance of this university.”

And while he said that the guidelines were “part of a larger plan that we’ve talked about, how to improve over all the operations of CUNY,” he also noted that outside investigations, one by the United States attorney for the Eastern District of New York, and the other by the New York State inspector general, had “identified and raised” important issues.

“We want an environment that contributes to successful fund-raising and stewardship and that certainly includes an assurance to donors that their dollars are being invested wisely,” he said. “To the extent that it’s consistent with what the I.G. has identified, and others, all the better.”

The overall impact of the new rules would be to centralize oversight of the foundations. They would have to open their records to CUNY, and would be subject to periodic audits by the university. Each foundation must enter into a new memo of understanding, which will outline the purpose of the fund, its personnel and the expectations of how it will operate. The university will also keep closer track of whether funds are being used as donors intended them.”

This action was inevitable after the scandals at City College last year.  Private giving is a lifeblood to the operations of many of our colleges.  We need to get it right.


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