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CUNY Tries to Balance Fundraising and Transparency

Martin Levine
June 12, 2017
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“Sewing needle with thread.” Credit: Markus Grossalber

June 7, 2017; New York Times

Last fall, a sharply critical report from New York’s Inspector General prompted the Trustees of the City University of New York to take notice of problems in the university’s $900 million endowment program. At the time, as NPQ reported, “CUNY Chancellor James B. Milliken said…that he takes seriously the findings of the state’s inspector general about the university: ‘CUNY must have in place the policies and practices that reflect and ensure the highest levels of integrity, accountability and transparency.’” At the same time, Governor Andrew Cuomo was pressing the university to use endowment funds as a replacement for diminishing state funding for general operations.

The CUNY system comprises 11 senior colleges, seven community colleges, the Macaulay Honors College, and five graduate and professional schools, cumulatively serving 274,000 students. The unique history and culture of each unit led to the development of 24 separate endowment funds, which were allowed significant latitude to operate under their own direction. In the last year, these funds contributed $250 million to CUNY operations. While effective in raising money, this approach resulted in limited overall control, controversy, and the IG’s finding of potential mismanagement.

Last week, almost nine months later, we learned more about the changes CUNY is now poised to enact. According to the New York Times, 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.” Included in the proposed revisions is a requirement that each fund open up their data bases to the CUNY administration.

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Other than moving accountability and control from each associated endowment fund’s own board of directors to CUNY’s trustees, there’s nothing very radical in these proposals. James B. Milliken, CUNY’s chancellor, told the Times, “We want an environment that contributes to successful fundraising and stewardship and that certainly includes an assurance to donors that their dollars are being invested wisely.”

Max Berger, chairman of the Baruch College Fund, one of CUNY’s largest foundations, told the Times,

We are in the process of discussing with CUNY a revision to the foundation guidelines and a memo of understanding. Everybody recognizes that the foundations are extraordinarily important to the CUNY system and the colleges they support, and we believe that the foundations are operated with the highest level of responsibility and transparency. We’re just trying to work through our issues so we can come to a place where everyone is satisfied.

As part of a system dedicated to “the upward mobility of the disadvantaged in the City of New York,” it’s important that the trustees can satisfy both the demand that they exert greater control on the management of its endowment funds and the need to raise much-needed funds. With the trustees set to vote later this month on a final set of changes, we will know soon if they have been able to thread a very fine needle.—Martin Levine

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About the author
Martin Levine

Martin Levine is a Principal at Levine Partners LLP, a consulting group focusing on organizational change and improvement, realigning service systems to allow them to be more responsive and effective. Before that, he served as the CEO of JCC Chicago, where he was responsible for the development of new facilities in response to the changing demography of the Metropolitan Jewish Community. In addition to his JCC responsibilities, Mr. Levine served as a consultant on organizational change and improvement to school districts and community organizations. Mr. Levine has published several articles on change and has presented at numerous conferences on this subject. A native of New York City, Mr. Levine is a graduate of City College of New York (BS in Biology) and Columbia University (MSW). He has trained with the Future Search and the Deming Institute.

More about: college endowmentsexecutive compensationFundraisingHigher EducationManagement and LeadershipNonprofit News

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