5.3.a-c Institution-related entities

For any entity organized separately from the institution and formed primarily for the purpose of supporting the institution or its programs:

(a) The legal authority and operating control of the institution is clearly defined with respect to that entity.

(b) The relationship of that entity to the institution and the extent of any liability arising from that relationship are clearly described in a formal, written manner.

(c) The institution demonstrates that (1) the chief executive officer controls any fund-raising activities of that entity or (2) the fund-raising activities of that entity are defined in a formal, written manner which assures that those activities further the mission of the institution.

Judgment

x Compliance o Non-Compliance o Partial Compliance

Narrative

Louisiana Statute RS 17:3390 governs private nonprofit corporations that support public higher education institutions within the State of Louisiana. This statute states that:

a nonprofit corporation whose principal purpose is to support one or more programs, facilities, or research or educational opportunities offered by public institutions of higher education, including but not limited to any nonprofit corporation whose primary purpose is to finance the design, construction, renovation, or equipping of facilities to be leased to such public institutions of higher learning,

shall be a private entity that shall not be deemed to be a public or quasi-public corporation or an administrative unit, public servant, employee, or agent of any institution of higher education for any purpose whatsoever if it meets all of the following criteria:

(1) The majority of the voting members of the corporation's board of directors are not members or employees of a higher education management board.

(2) The corporation is under the management and control of a board of directors elected by the members or shareholders of the corporation.

(3) The corporation reimburses, either directly or through in-kind services, the cost of housing, personnel, which personnel shall remain public servants for all purposes, and other support furnished to the corporation by any institution of higher education, if any such support is furnished.

The University of Louisiana System Policy Number FB-IV, effective April 2015, defines the UL System’s policy and expectations regarding the relationship between its universities, their foundations, and other affiliate organizations:

To ensure that the universities and their affiliated organizations have a clear understanding of their legal, moral, and financial responsibilities, each university and affiliate shall enter into a memorandum of understanding or affiliation agreement that will be approved by the UL System Board of Supervisors. [3 - Paragraph 3]

Policy Number FB-IV states that the organization must maintain continued compliance with the affiliation agreement, state law, and Federal Internal Revenue Service regulations for 501(c)(3) corporations (as applicable). Compliance with these regulations is considered necessary for foundations and other affiliated support organizations to maintain their non-profit, tax-exempt status and be recognized by the UL System BOS. The BOS has additional financial requirements for funds received from the Louisiana Education Quality Support Fund (LEQSF), which are covered in a Funds Management Agreement, dated May 16, 2018.

UL Lafayette has three primary affiliated entities: The UL Lafayette Foundation, Inc., the UL Lafayette Alumni Association, and the Ragin’ Cajun Facilities, Inc. (RCFI). The Ragin’ Cajun Athletic Foundation and the Hilliard Museum are subsidiaries of the UL Lafayette Foundation. These entities are described below.

UL Lafayette Foundation, Inc.

The UL Lafayette Foundation, Inc., exists to encourage, manage, and administer private resources to support the mission and priorities of the University, as established by the Board of Trustees and the President of the University.

The UL Lafayette Foundation meets the requirements of Louisiana Statute RS 17:3390 and UL System Policy Number FB-IV.(4)a, as evidenced by the UL Lafayette Foundation Articles of Incorporation, the UL Lafayette – UL Lafayette Foundation Affiliation Agreement, UL Lafayette Foundation By-Laws, and the UL Lafayette Foundation Annual Independent Audit Reports for 2015, 2016, 2017, and 2018.

The Articles of Incorporation for the Foundation were updated on November 4, 1999, to reflect a name change from the University of Southwestern Louisiana Foundation to the University of Louisiana at Lafayette Foundation. The University of Southwestern Louisiana Foundation was originally incorporated on August 2, 1955.

The President of the University serves as an ex-officio voting member of the Board of Trustees of the UL Lafayette Foundation, as noted in Article V Section B of the Foundation’s By-laws. The UL Lafayette – UL Lafayette Foundation Affiliation Agreement references the University President’s responsibilities, and is discussed in greater detail in the response to Comprehensive Standard 5.2.c. The President meets bi-weekly with the Vice President for Advancement to review fundraising goals, strategies, and successes, as well as campaign priorities for fundraising. Additional information on the President’s responsibility as it pertains to fundraising can also be found in UL Lafayette’s response to Comprehensive Standard 5.2.c.

The Affiliation Agreement provides that the Foundation will establish asset-allocation, disbursement, and spending policies that adhere to applicable federal and state laws. The Bylaws and policies of the Foundation clearly address the Board’s fiduciary responsibilities, including expectations of individual Board members based upon ethical guidelines and policies. A Management of Funds Agreement further defines and clarifies the Foundation’s investment and audit responsibilities, and the Foundation’s Conflict of Interest Policy protects the interests of the Foundation with regard to safeguarding the integrity of the Board’s financial decision making.

The Affiliation Agreement provides that the Foundation be responsible for the management, control, and investment of all assets of the Foundation. This includes the Foundation’s prudent management of all gifts consistent with donor intent, and the University’s practical control over the Foundation by virtue of:

a) the University President’s participation in the governance of the Foundation

b) the fact that a large percentage of the members of the Foundation’s Board of Trustees are either nominated by the University’s President or are University employees or representatives

c) the President’s control over Foundation disbursements

The leadership of the Foundation and the leadership of the University work collaboratively to meet the University’s strategic goals and mission utilizing the following means:

· An annual external Foundation audit is performed by a certified public accounting firm.

· The UL Lafayette Foundation and Advancement staff work with and inform UL Lafayette Foundation Board members who vote on UL Lafayette Foundation policies and, when needed, forward these policies to the UL Lafayette Board of Trustees for approval.

· The Foundation serves as an instrument for entrepreneurial activities for the University and engages in such activities as purchasing, developing, or managing real estate for University expansion. Evidence of this practice can be seen in meeting minutes from the UL Lafayette Foundation Real Estate Committee, on which the University President is a standing member, as well as the 2004 Affiliation Agreement, which addresses the Foundation’s purchase and financing for the University Art Museum. According to the Bylaws, Article V.B, the President of the University is an ex-officio voting member of the Foundation Board of Trustees. In January 2000, the UL Lafayette Property Foundation was incorporated for the purpose of property acquisition and management.

· The Ragin’ Cajuns Athletic Foundation (RCAF) was incorporated on December 14, 2011. This corporation is a subsidiary of the UL Lafayette Foundation, and its purpose is to support the activities of the Foundation and the University with regard to athletics. The RCAF is governed by a Board of Directors of three to seven members appointed by the Board of Trustees of the UL Lafayette Foundation (Article 10). Section 2.1.B of the August 2013 Governing Provisions of the UL Lafayette Foundation Ragin’ Cajuns Athletics Governing Board states that, in addition to the members listed in the Articles of Incorporation, ex-officio, non-voting members of the Athletics Governing Board shall include the Chairman of the Foundation Board of Trustees, the President of the University, the Vice-President for University Advancement, and the Athletic Director.

· The Paul and Lulu Hilliard Art Museum was created with special financing as stated in the 2004 UL Lafayette–UL Lafayette Foundation Affiliation Agreement. The Foundation has not been historically involved in the daily operations of the Museum, and the facility is now leased to the University. The University Art Museum Advisory Board was created and is governed by an agreement between the University and UL Lafayette Foundation, dated February 15, 2017. The purpose of this Board is to provide advice and support to the Museum on matters relating to general policies and operations, financial operations and fund-raising initiatives, and other museum-centric activities. According to Article 4 of the governing provisions, the Board consists of 11 members, with five members appointed by the President of the University and four members appointed by the President of UL Lafayette Foundation. In addition, The Hilliard Society is an organization created for the specific purpose of increasing membership and fund-raising. The Hilliard Society Articles of Incorporation explain that the Hilliard Society is a subsidiary of the UL Foundation. The Hilliard Society By-Laws state that all funds raised by the Museum are deposited with and managed by UL Lafayette Foundation.

University of Louisiana Lafayette Alumni Association

The UL Lafayette Alumni Association is a 501(c)3 organization incorporated in 1965. The 2018 revised Articles of Incorporation state that the purpose of the organization is “To advance and strengthen the tie of affection and esteem formed in school days…to further the interest and improvement of the University…to fund scholarships…to establish, maintain and administer funds for the assistance of worthy students…and in all and any ways to further the interests of students and alumni…and to organize alumni chapters.”

Article 1 of the By-Laws of the Alumni Association state that the organization “shall exist and operate in conjunction with the Department of Alumni Affairs to form the Alumni Office for the University of Louisiana at Lafayette. The two components of the Alumni Office shall operate in fulfillment of the same role, scope, and mission. The UL Lafayette Director of Alumni Affairs shall serve as the Executive Director of the Alumni Association.”

The reporting structure of the Department of Alumni Affairs ensures that the President, at all times, controls the activities and fundraising component of the Alumni Association. The Executive Director, Alumni Affairs, reports directly to the Vice President for University Advancement, who reports to the President. Further, the Alumni Association has an Affiliation Agreement with the University, which further defines the working relationship between the groups and requires the Alumni Association to adhere to the Fundraising Policies and Guidelines. Exhibit “B” of the Affiliation Agreement further defines the financial policies regarding the deposit and expenditure of Association funds to ensure the financial integrity of the Association.

Ragin’ Cajun Facilities, Inc.

Ragin’ Cajun Facilities, Inc. (RCFI) is a 501(c)3 non-profit organization established in January 2001. As stated in the Articles of Incorporation, the purpose of this organization is to promote, assist, and benefit the mission of the University, specifically including, but not limited to, acquiring, constructing, developing, managing, leasing as lessor or lessee, mortgaging, and/or conveying student housing, parking facilities, and other facilities on the University. All revenues collected by RCFI are used to carry out its objects and purposes (Article 10). As stated in the Bylaws, RCFI is governed by a Board of Directors, which may consist of three or five members. To ensure adequate presidential control of this affiliated entity, the University President appoints one member when the Board has three members, and appoints two members when the Board has five members.

RCFI has an Affiliation Agreement with the University, which states that one of the duties and responsibilities of RCFI is to provide support to the University, and that it may not engage in activities contrary to this objective, and in no way conflict with the authority of the University. The Affiliation Agreement, as well as the By-Laws, stipulate financial controls and requirements for an annual independent audit.

These are the only institutionally affiliated entities of the University as defined in Louisiana Law and authorized by the University of Louisiana System. Each has a documented purpose, structure, and role that support the University and its programs.