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Public records bill could drive away UC donors

Blowback

SB 330 would undermine the private gifts crucial to maintaining UC's status as a premiere university system.

September 14, 2010|By Maurice Salter and Richard M. Rosenberg

A bill in Sacramento supported by The Times' editorial page ("Fundraising, with limits," Sept. 8) turns out to be, on closer inspection, a poster child for the law of unintended consequences. It deserves rejection by the governor.

The bill, SB 330, would subject private charitable organizations that raise scholarship funds and other philanthropic resources for public college and university campuses to the state Public Records Act. Sounds good, until you look at the details.

At the University of California, campus foundations are nonprofit, nongovernmental entities overseen by volunteer boards. They raise money and transfer it to a UC campus for expenditure. The foundations are subject to federal and state laws, undergo annual audits and produce financial statements and tax returns that are public.

Once donations to a foundation are transferred to a UC campus, information about the expenditure of those funds already is subject to the requirements of the Public Records Act — the "problem" SB 330 purports to remedy. The university also reports to the public voluntarily on how gift funds are spent.

But by applying the Public Records Act directly to these foundations, SB 330 could end up scaring away many private donors who wish to support UC students and programs. That's a serious issue when the state and the university are already facing huge financial challenges.

First, donors who discuss a contribution with a foundation — even if the contribution is not anonymous — may reveal aspects of their personal finances, family medical history or other issues they do not wish to be disclosed. That privacy is threatened under SB 330.

Second, anonymous donors have an even greater concern for their privacy. They may have safety concerns if their wealth is publicized; they may have religious beliefs requiring that charitable contributions go unrecognized; or they may have a family member with an illness for which they would like to fund research without compromising the relative's privacy. SB 330 does not guarantee protection for them.

Already, several major donors to our universities have told us they would have to reconsider their support for UC campuses if SB 330 becomes law. SB 330 provides that the names, addresses and phone numbers of anonymous donors would remain private. But their financial holdings and other personal information could still be disclosed, compromising their anonymity.

In addition, even the protection of the name could go away under SB 330 if the donor sought to influence "action" within the university. Because most donations are given to expressly address a particular purpose — for instance, to extend library hours or expand aid to lower-income students — virtually all donations could be construed as influencing an action and thus require disclosing the donor's name. The exemption also does not apply to donors who contribute through family trusts or family foundations, or to volunteers who serve as trustees of campus foundations.

Keeping UC a strong public university for California and its students requires strong philanthropic support. Frankly, without private philanthropy, UC runs the risk of becoming a second-rate university system. SB 330 offers too many ways for support to be undermined. Gov. Arnold Schwarzenegger should veto it.

Maurice Salter is chairman of the UCLA Foundation. Richard M. Rosenberg is chairman of the UCSF Foundation.

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