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Editorial: $200M UNM Foundation wrong to cling to secrecy

The University of New Mexico Foundation has a new president and CEO. Unfortunately, the organization seems intent on doubling down on its penchant for secrecy – declining to release how much incoming chief executive Jeff Todd will be paid or who were the other finalists for the job.

While the foundation has taken the position it isn’t subject to the state’s Inspection of Public Records Act – and is appealing a state district court decision that concluded it is – Todd’s pay won’t stay secret forever. Salaries of top executives are required in the foundation’s federal tax filings as a tax exempt 501(c) public charity. The foundation’s 990 return for 2017, the latest available on Guidestar, shows Todd’s predecessor, Henry Nemcik, had reportable compensation of $418,101 plus another $45,900 in estimated “other compensation.” Two other executives topped the $300,000 combined mark.

The foundation, which on its tax return describes its mission as “successfully raise, invest, and steward gifts through long-term partnerships with donors,” has maintained it especially wants secrecy to protect confidential communications with donors. But it casts the blanket of opaqueness much wider by claiming it isn’t a public body.

That’s an interesting position for an organization that is described on EVERY PAGE of its independent outside financial audit of June 2018, also available on Guidestar and posted on the foundation’s website, as “A Component Unit of the University of New Mexico.”

The audit report, which lists the foundation’s total assets on June 30, 2018, as $264,789,100 and its “net position” as $229,559,368, also points out that a top funding source for the foundation’s operating costs for the year was “UNM contract service revenue,” which accounted for 39.1% of total operating expenses of $11.6 million. The big-ticket expense items, according to the report: staff salaries of $7.49 million, fringe benefits of $1.36 million and “donor relations” of $473,148. Receipts for those expenditures would likely make interesting reading. And why shouldn’t they be public?

While it professes to be independent, the foundation is performing a public function solely for the benefit of UNM and is hopelessly intermingled with the university – hence the ruling by District Judge Nancy Franchini that it is a public body subject to IPRA.

The outside audit reinforces this. It points out that the memorandum agreement between UNM regents and the foundation states that UNM “will continue to provide the Foundation sufficient administrative support to allow the Foundation to conduct its business and fulfill its responsibilities to the University.”

It also provides that “gift funds and income on gift funds for the benefit of any unit of the University … will be disbursed through the University’s general ledger system. …” Any exception to that requires the approval of the UNM president.

And, separate assets of the foundation and UNM are for the most part invested jointly in a Consolidated Investment Fund.

Separate entity? Hardly.

The foundation does important work for the benefit of the university. Its assets range from stocks and bonds to real estate and art. It has shown solid investment returns and fundraising success.

But with UNM President Garnett Stokes still relatively new on the job and new leadership at the foundation in CEO Todd, it would be a good time to re-think what has been a losing position of total secrecy – starting with the release of Todd’s salary – that can do nothing but erode public confidence.

There is a reasonable compromise to be had that protects both the public interest and sensitive donor information.

This editorial first appeared in the Albuquerque Journal. It was written by members of the editorial board and is unsigned as it represents the opinion of the newspaper rather than the writers.