3.2.13 Institution-related foundations
Any institution-related foundation not controlled by the institution has a contractual or other formal agreement that (1) accurately describes the relationship between the institution and the foundation and (2) describes any liability associated with that relationship. In all cases, the institution ensures that the relationship is consistent with its mission.
Judgement of Compliance:
The University of Tennessee at Chattanooga (UTC) has a merger agreement detailing the merging of the University of Chattanooga with the University of Tennessee. As part of the merger, the University of Chattanooga became the University of Chattanooga (UC) Foundation, and it received restricted funds to be retained in the endowment of the educational foundation. The University of Chattanooga Foundation, Inc. (the “Foundation”) is formed exclusively for charitable, scientific, literary, and educational purposes within the meaning of Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).
Relationship between UTC and UC Foundation
The mission statement of the UC Foundation states that it will provide resources that support distinctive programs and promote bold initiatives that enrich the educational experience at the University of Tennessee at Chattanooga. The UC Foundation bylaws state that it is formed for the exclusive purpose of benefitting the educational, research, and public service missions of the University of Tennessee at Chattanooga. The language of the bylaws reflects the UTC Mission Statement and demonstrates the consistency between this foundation and the University Mission.
In the 2010 Fiscal Year, the UC Foundation provided $1,865,792 in unrestricted funds to support mission-related initiatives at UTC. Included were $484,000 for Strategic Initiatives, $268,000 for Faculty Development and Support, $973,792 for Student Scholarships, $30,000 for Executive Partnerships, and $109,000 to support endowed professorships and the Fine Arts Series.
Liability Associated with Relationship
On November, 9, 2007, the UT Board of Trustees (BOT) adopted a Policy on Related Foundations, which includes a section devoted to the UC Foundation. This policy contains provisions governing any potential liability for the university (Page 3). The UC Foundation submits an annual audit and an annual report to the BOT at its June meeting. The FY 2010 annual report of the UC Foundation was presented to the BOT at its June, 2010 meeting. The final item in the report states, “The UC Foundation has not received any gifts that would place a financial liability on the University.”
- University of Chattanooga and University of Tennessee Merger Agreement
- UC Foundation Mission Statement
- UC Foundation Bylaws
- UT BOT Meeting Minutes, November 9, 2007, adoption of Policy on Related Foundations, Page 11
- Unrestricted Funds, FY 2010
- UT Board of Trustees Policy on Foundations, November 9, 2007
- UC Foundation Annual Report to UT, 2010