Compliance Status

Louisiana State University and A&M College is in compliance with this principle.

Narrative

Institution-related entities that are separate from Louisiana State University and A&M College (LSU) are organized primarily to support LSU and its programs. LSU clearly defines the relationship with these entities in terms of authority, operating control, extent of liability, and formal control of fund-raising activities by the LSU chief executive officer.

Two statutes promote fund-raising by Louisiana public universities. The powers of the LSU Board of Supervisors are enumerated in Louisiana Revised Statute (R.S.) 17:3351 and include solicitation of donations:

(2) Actively seek and accept donations, bequests, or other forms of financial assistance for educational purposes from any public or private person or agency and to comply with rules and regulations governing grants from the federal government or any other person or agency which are not in contravention of the constitution and laws [1].

Under Louisiana R.S. 17:3390, universities are encouraged to promote fund-raising organizations as a method to procure additional resources in support of the institutional mission [2]. This statute specifically indicates that fund-raising organizations are private entities as long as their boards of directors are not university employees and the organizations pay for their expenses. 

The LSU Board of Supervisors has a clear policy and arrangement with non-profit organizations that raise money on behalf of LSU System institutions. Chapter VIII of the Board of Supervisors’ Bylaws & Regulations outlines the relationship of affiliated organizations that raise funds in the name of and in support of the system and university [3]. Through a contractual arrangement known as the Uniform Affiliation Agreement, LSU permits the existence of such non-profit corporations to assist in fund-raising, with the university retaining control of the relationship, and with the condition that they may terminate at any time. Uniform Affiliation Agreements exist with the LSU Foundation, the LSU Property Foundation, the LSU Marine Property Foundation, the LSU Alumni Association, and the Tiger Athletic Foundation [4] [5] [6] [7].

The Uniform Affiliation Agreement affirms that the non-profit, private-support organization is an affiliate of the university with its own legal standing but has a mission to support Louisiana State University (Section 1) [4] [5] [6] [7]. The governance section (Section 2) provides a level of legal and familial separation between the university and the affiliate, while also guaranteeing the university the right to inspect affiliates’ records. Sections 3, 5, and 6 enumerate the responsibilities of the affiliate for the management and distribution of funds, while Section 4 lists the university’s duties. Section 7 outlines the activities that are prohibited, with special emphasis on the personal enrichment of public employees.

7.1. Affiliate shall not expend funds for any of the following purposes…:

7.1.1. Solely for the private benefit of a University employee (or the family or spouse of a University employee or other non-employee who is on University business)….

7.1.3. For any gift which is presented to be personally from a University employee in his or her personal capacity.

7.1.6. For any expense or reimbursement which would create, under all circumstances, a reasonable conclusion… that the amount is extravagant or lavish beyond the appropriate University purpose.

7.1.9. For any purpose which is not consistent with the Affiliate’s Purpose….

Sections 8, 9, and 10 pertain to the method in which policies are adopted, and in which the affiliation relationship is terminated, and provides the specifics of official correspondence and dialogue. Section 9.4.4 is especially important in establishing that assets are property of the university and the disposition of assets should the relationship be severed.

9.4.4. Transfer to the University or at the University’s sole discretion to another non-profit entity affiliated with University, all funds and assets donated to Affiliate…because of its association with University.  

The chancellor controls the parameters of the relationship between affiliated organizations and the university. Under Policy Statement 50, the chancellor is the chief executive officer of LSU and has jurisdiction over all matters not specifically dictated by the board [8]. The policy of the chancellor, Policy Statement 115, identifies the approved affiliated organizations, defines the parameters of the relationship, and outlines the cooperation of the university and the affiliated organizations, as well as establishes the rules for general fund-raising outside of the affiliated organizations. For example, PS 115 provides the ethical guidelines for fund-raising, the coordination of fund-raising among numerous entities, and the rules for fund-raising [9]. Additionally, the ability to use the university’s name and indicia for fund-raising purposes is controlled by Policy Statement 93 [10].

The affiliated organizations are separate legal entities and must maintain the governance and fiscal autonomy of their organizations (Uniform Affiliation Agreement, Sections 1.5 and 3.5) [4] [5] [6] [7]. As stand-alone corporations, affiliates are responsible for their own finances as well as risk. Pursuant to Louisiana R.S. 17:3390B(3) and Section 3.5 of the Uniform Affiliation Agreement, organizations affiliated with the University are required to reimburse the university, either directly or in-kind, for the value of any facilities, personnel, or other support provided by the university [2] [4] [5] [6] [7].  This obligation is confirmed and clearly described in Section 3.5 of the Uniform Affiliation Agreement.

The chancellor establishes the strategic philanthropic goals and maintains a strong working relationship with the affiliated organizations. Periodically, the chancellor establishes overarching institutional fund-raising goals by specifying such in a document or through leadership in a capital campaign. In December 2010, LSU concluded its Forever LSU capital campaign, which raised more than $700 million toward its pillars of student, faculty, and program support and infrastructure improvement [11].  After the campaign wrap-up was completed, Chancellor Michael Martin distributed a directive for philanthropic support focusing on endowment building, student aid, and new infrastructure [12].

To ensure the affiliated organizations remain focused on the philanthropic goals, the chancellor conducts meetings and frequent consultations with the leaders of the affiliates. The leaders of the affiliates are also members of the Executive Staff, and participate in regularly scheduled meetings with university administrators [13]. The chancellor also participates in fund-raising activities with the affiliates to demonstrate to donors the solidarity of effort in support of a request [14].

The chancellor is particularly interested in the conduct of the primary booster organization, the Tiger Athletic Foundation (TAF) [15]. Due to particular sensitivity of college athletics, additional procedures exist to closely monitor both the Athletic Department and TAF. The athletic enterprise is overseen by the board through its standing Athletic Committee [16]. The most recent policy approved by the Athletic Committee is an Athletics Funds Transfer Policy [17] [Item 11D1] that establishes a revenue stream to the academic programs from athletic revenues. The board also controls athletic ticket prices through policy, though the board members are not entitled to nor can they receive any free tickets or parking passes in accordance with the Code of Governmental Ethics (R.S. 42:1111(A)(1)) [18] [19].  At LSU, the athletic director is also a vice chancellor and reports directly to the chancellor [20]. However, the chancellor also maintains control of athletics by the presence of the Athletic Council (PS 110) and of an embedded compliance officer who also reports to the chancellor [20] [21] [22]. For the TAF specifically, the university has at least one representative who attends TAF Board of Directors meetings. The Vice Chancellor of Finance & Administrative Services meets with TAF’s financial officer and other staff to discuss financial and capital concerns. TAF-supported facility renovations and additions must be approved by this vice chancellor, the chancellor, and, in some instances, the Board of Supervisors [23]. Additional details associated with intercollegiate athletics are presented in Comprehensive Standard 3.2.11.

Policy Statement 50 empowers the academic officers of the university to conduct activities in furtherance of their academic goals [8]. To that end, each college, department, or unit may employ advancement professionals in support of their individual unit’s philanthropic goals. By embedding the fund-raising activities, the units and the university are able to direct their efforts in accordance with existing goals. Due to Louisiana law on affiliated non-profit support organizations (R.S. 17:3390), some of the professionals may be compensated partly or completely by an affiliated organization [2]. Conflict in management is avoided by the chancellor having the authority to determine fund-raising efforts through Policy Statement 50 and 115 [8] [9] [25]. Clarity is further provided through the joint development agreement (JDA) that re-states the LSU Foundation’s mission to support LSU and that enumerates the expectations of the foundation, the university unit, and the advancement professionals [26] [27] [28] [29].   

Policy Statement 50 identifies the chancellor as the chief executive officer and establishes that the chancellor oversees a broad array of activities for the promotion of the university [8]. Certain academic officers, such as vice chancellors and deans, are empowered to conduct activities in furtherance of their particular academic goals. As stated previously, each college, department, or unit may employ advancement professionals in support of their individual unit’s philanthropic goals, with some of these professionals compensated either partly or completely by an affiliate organization. The LSU Foundation maintains an organizational chart coded according to pay type, with some employees considered state employees, some foundation employees, and some compensated through a shared arrangement. While this system may appear inconsistent, the pay arrangement is typically for the benefit of the professional who may have a particular circumstance [30]. Regardless, the expectations are the same, and are even solidified through joint development agreements [26] [27] [28] [29] that outline the relative goals and responsibilities of the foundation and the university.