CSU’s Bedrock: Private foundations build support for public institutions
The world of higher education is a complicated web of money, books, and strategic planning. While many institutions are public, such as Columbus State, public money that goes into them on state and federal levels can’t be used for everything.
To achieve funding for things such as catering institutional events, purchasing gifts for employees, or simply taking donations from alumni that fund student scholarships requires more than simple tax dollars. As a result of this financial need, institutions of higher education have created a series of 501(c)3 non-profit foundations to handle the private side of university funding.
“Generally, for public institutions like CSU, the push was made to incorporate 501(c)3’s that are separate from the university legally speaking,” said Brett Evans, the Senior Director of Development and CSU Fund Development, “So that they can receive private donations from alumni, other individuals, foundations, corporations and other sources,”
Evans works with the CSU Foundation and CSU’s Office of University Advancement. The two organizations, both committed to furthering CSU’s goals, work in tandem to manage donations, gifts and endowments for CSU as well as receive and request funds from private sources.
All Foundations employees, for the multiple organizations, are “Columbus State employees. We’re all state funded and we’re all state employees like every other staff on campus,” said Evans, “Everything we do for the Foundation is tied directly to what the university is trying to accomplish. It strictly functions to support the academic mission of CSU.” With University Advancement and the CSU Foundation sharing employees, Evans believes that it helps to guide CSU’s missions.
“We do this year round to support the overall mission and vision of CSU. So legally, we can make these gifts tax-deductible as allowed by law by having a separate foundation,” he continued.
Similar to other universities and educational systems, CSU didn’t always have a partnership program that worked the same way that the CSU Foundations work now. Rather than simply one large foundation to handle everything, CSU has multiple organizations that each deal with different university programs.
The CSU Foundation and the CSU Properties Foundation to let the main body organization manage other projects and let the Properties Foundation focus on holdings and properties instead.
“There’s really multiple foundations. Years ago, they began when we were Columbus College, they started with what was called the Columbus College Foundation. The public schools, many of them had private foundations that served as fundraising for private support,” said Tom Helton, CSU’s Vice President for Business and Finance, “For us, it’s always designated for something, it generally has a purpose. Like if someone wants to endow a scholarship, sometimes it funds a program or an endowed chair.”
“Originally, there was only one foundation, Columbus State was a commuting school. We started wanting to move into housing, and what we call Courtyard I was built by a third-party developer as independent housing,” said Helton, “And they sold it to the bank, so they [the CSU Foundation], thought this might be the way to get into housing.”
Helton also serves as the Executive Director of the CSU Properties Foundation, the organization that manages funds for the various property holdings that then either become school buildings for the university, or are used to acquire rental payments from lessors, allowing CSU to fund other programs with the profits from the properties.
One example is the Nyack House, originally owned by Carson McCullers, a native Columbus writer. “There’s a big apartment downstairs,” said Helton, “and that was her apartment. But she already had it done this way, where there were apartments upstairs for rent. The Properties Foundation manages taxes, rent and fees for it,” and the apartments are still rented today and “leased for housing.”
The Foundation received the lease from the bank and split into the CSU Foundation and the CSU Properties Foundation to let the main body organization manage other projects and let the Properties Foundation focus on holdings and properties instead.
While Helton serves on both the Properties Foundation and as a Vice President at CSU, only one CSU employee has a vote on the boards of the foundations. While the majority of the members of each board, who have votes, are volunteers from the community, CSU President Chris Markwood has a vote on all of the boards, filling a unique role as CSU’s leader.
“The only person, by mandate of the Board of Regents, who has a vote is the President, is a member of the board and serves on all boards,” said Helton.
This crossover of employees and administrators to positions within the foundations helps to support CSU’s missions. The largest function of the various foundations at CSU is scholarship funding, according to Helton.
“We’re responsible for stewarding those gifts, for managing those endowment funds, for managing those accounts to then transfer to the university side to be used by other departments, the provost office and other outreach centers,” said Evans.
While these situations with non-profits and universities is a fruitful system of funding and support, not everyone finds the setup ideal. Josh Freedman, a contributing writer at Forbes magazine delved into the systems of non-profit foundations in higher education after receiving a copy of a Harvard funding request sent to their alumni. After reading it, Freedman decided to question the thoughts behind it.
“…Harvard’s philanthropy is clearly questionable. Most of Harvard’s students are rich. (For that matter, on average four year nonprofit schools skew upward in the wealth distribution, although not as much as many of the most elite). Harvard itself is also really rich, with billions of dollars in its endowment and billions of dollars of property, all of which are untaxed regardless of what they’re for,” writes Freedman.
Indeed, as the cost of education for everyday students continues to rise, from tuition costs and course fees to the costs of exercise facilities, the needs of institutions to receive private funds as well as taxpayer dollars is notable.
In 2014 alone, the CSU Foundation received $16,902,542. While revenue came from multiple sources, the majority, $12,420,772, came from “contributions,” or private donations. As of 2014, the total assets within the CSU Foundation totaled out to $72,655,536, with these statistics all available for perusal at ProPublica.org.
Regardless of personal views held regarding the role of private non-profits within public institutions, for now they appear to be a fixture in the world of higher education.
