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Board Member Questions UT-Austin Fundraising Totals

The University of Texas at Austin, which is at the tail end of its largest-ever capital campaign, just completed a record fiscal year of fundraising.


The University of Texas at Austin, which is at the tail end of its largest-ever capital campaign, just completed a record fiscal year of fundraising. But one member of the UT System Board of Regents, Alex Cranberg, is questioning how the university is counting its contributions.

As of the end of July, according to a university official, more than 88,800 individual donors contributed this fiscal year to the campaign, which is now roughly three-quarters of the way toward its $3 billion goal. Of that group, nearly 11,200 — about 12.6 percent — were counted because they paid membership dues to the Texas Exes, an alumni organization that is technically separate from the university.

According to the Council for Advancement and Support of Education, the international organization that sets standards for fundraising reporting in higher education, membership dues should not be counted toward capital campaign goals.

Cranberg told The Texas Tribune, “If my reading of the CASE rules is correct, UT-Austin should probably correct its calculations.”

The university, though, defends the decision to count the membership dues toward its capital campaign goal, and officials say they have no plans to change course.

The "Campaign for Texas" began in September 2006 and will end in August 2014. It was launched to help the university implement the recommendations of a major study group called the Commission of 125, which included developing a new undergraduate curriculum, attracting and retaining top academic leaders and researchers, and enhancing campus facilities.

In his "State of the University" address on Wednesday, UT-Austin President Bill Powers encouraged people to give to the campaign, which will require one more record-breaking year to meet its goal. "Only through philanthropy will we be able to realize our founders' vision for national and world-class greatness," he said.

On its website, CASE recommends considering a person’s intention when deciding whether to count the contribution.

“If the donor intended to make a philanthropic gift to the institution, then it is a gift and should be reported,” the organization's website states. “If the donor wrote a check to receive something in return — a magazine, admission to an event or membership in an organization — then the amount should not be considered in alumni giving totals, even if the donor receives a receipt from the institution.”

Individual memberships to Texas Exes range from $48 to $1,000 depending on members' age when they join and the length of their commitment to the organization. Benefits include career services, university library access, admittance to special events and discounts at some merchants.

This is not the first time that a regent has questioned fundraising reports at the flagship university.

In 2012, embattled regent Wallace Hall, traveled to Washington, D.C., and participated in a CASE meeting at which UT-Austin representatives disputed a rule that prohibited counting in-kind software donations toward their capital campaign. Hall argued in favor of CASE’s rule and against the university, which was ultimately forced to remove more than $220 million from its total — temporarily knocking it back below the $2 billion mark. 

In a letter to the Texas House Select Committee on Transparency in State Agency Operations, which is currently mulling filing articles of impeachment against Hall, his lawyer alleged that, in the course of his controversial investigations into activities at UT-Austin, he has uncovered “systemic inflation and misreporting of non-monetary gifts.” 

University officials have denied that and other charges made by Hall, including that the school uses more lenient admissions criteria for politically connected applicants.

“We had a disagreement [with CASE],” Powers told reporters on Wednesday regarding the software issue. “We do not have favoritism in our admissions process,” he added.

Unlike the in-kind software donations, if UT-Austin were forced to remove the dues-only-payers from their totals, it would not create a significant drop in the overall progress toward the capital campaign goal.

Still, UT spokesman Gary Susswein said the university has no plan to remove those numbers.

“Of course we count the charitable portion of the dues paid to the Texas Exes in our capital campaign, as do several other top-ranked public research universities,” he said in a statement, noting that the alumni organization provides millions of dollars in scholarship money for UT-Austin students.

Susswein said that the university has been transparent with its governing board about its fundraising totals since the capital campaign began.

He said that since 2005, the university has worked with the Texas Exes to find a way for contributions to the alumni organization to be counted to “fully capture the relationship between our alumni and the university.” He said that 80 percent of the dues are considered charitable.

CASE publishes guidelines that apply both to reports submitted to its organization as well as to the Council for Aid to Education, a national organization that conducts policy research and promotes corporate support of education. “We will comply with all guidelines in the reports we send to CASE and CAE,” Susswein said.

The reporting standard guidelines for CASE and CAE surveys indicate that alumni dues should not be counted — though the Internal Revenue Service indicates that a portion of them constitute a legal gift — because such payments “imply a perceived benefit to the donor of equal or greater value.”

The guidelines also say, “If an amount is paid over and above the assessed amount of the alumni dues amount in conjunction with that dues payment, and that additional amount is applied toward philanthropic endeavors, those additional funds are counted.”

But even if the university altered its reporting to CASE, it would not necessarily be required — unless made to do so by the system, as happened previously — to change its public fundraising pronouncements.

“For national reports, it is important that all participating institutions follow the same standards to ensure comparability,” a spokeswoman for CASE said via email. “For institutional purposes, there can be many good reasons why an institution may want to use different figures for purposes of donor recognition, staff performance measures or governing board reports.” 

“We simply encourage institutions to be clear and transparent about what those figures actually represent and be prepared to explain why they differ from nationally reported numbers,” she said.

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This article originally appeared in The Texas Tribune at http://www.texastribune.org/2013/09/12/ut-austin-fundraising-totals-questioned-board-memb/.

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