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Legislation Passes to Increase Transparency of Public Foundation Donations, Spending

People sitting in a legislative chamber
The Virginia Senate in session. (Photo: Craig Carper/VPM)

After a series of lawsuits made it to Virginia’s highest court, lawmakers are trying to increase transparency regarding donations to publicly-funded state universities. Although state universities are public, they also operate private foundations which allow for anonymous, untracked donations. 

Critics say that's a problem, because that private money may influence major decisions made by public institutions.

“So while they are private foundations, they do exist solely to support our public institutions,” said Stacie Gordon, with the advocacy group Partners for College Affordability and Public Trust. “So I think it's important that lawmakers understand what this money is going towards.”

Lawmakers have signed off on a bill that requires universities to annually report foundation spending in standardized categories like financial aid and faculty compensation. Gordon says these standardized categories will make it easier for lawmakers to track and compare spending across all Virginia public universities going forward. 

“Because their [foundation's] work so heavily influences the universities’ decision-making and ability to carry out various programs and services, there needs to be some measure of accountability,” said Megan Rhyne, with the Virginia Coalition for Open Government. 

Other legislation Gov. Ralph Northam is expected to sign on Monday will make sure donors who wish to contribute with strings attached can’t keep their name, or conditions of their gift, a secret. While Ryne says this legislation is important, she notes that the legislation doesn’t entirely prohibit donors from remaining anonymous. 

“A donor can give you a million and say you use it for whatever you want to, but I want to remain anonymous,” Rhyne said. “But if they say with this $1 million I want you to hire my son George to teach a class…then that donor could not remain anonymous because of it.” 

Another bill introduced by Del. David Bulova (D- Fairfax) requires universities to create policies determining what kinds of conditions they’re willing to accept – or not accept – in exchange for foundation dollars. These policies would also be subject to public records law.

“Oftentimes, there is not a paper trail as it goes from the foundation to the university, and so you lose that transparency in the process,” Bulova said.