The University at Buffalo Foundation occupies a peculiar place in Western New York’s public life. It is a private entity, but one whose purpose is to support one of the most important public institutions in the region. As such, it has a common-sense duty to operate transparently and efficiently. The university’s standing depends on it, yet the foundation isn’t doing the former, which makes it difficult to determine whether it is doing the latter.
The issue arises in light of an analysis of the foundation’s spending conducted by a UB faculty organization. What it found was disconcerting – not illegal, not unethical, but also not in keeping with the policies of an organization seeking to maximize its influence. All of Western New York has an interest in the foundation doing just that.
The foundation, whose assets broke the $1 billion mark in 2013-14, has created an endowment for the university and while $1 billion pales in comparison with many other universities, it is no small amount. Questions about its management – where the money comes from, how it is invested and where it is spent – are crucial to the foundation’s ability to continue to attract donations. Transparency matters.
Those questions are largely unanswered. The review by the UB chapter of the American Association of University Professors turned up some facts that would be better explained than dismissed.
For example, the analysis concluded that the foundation’s spending on university and foundation salaries grew by 174 percent over a 13-year period and rose to 40 percent of total spending from 30 percent during the same time. There may be a good reason for that, but absent an explanation, donors can only wonder.
Another point: The foundation spent more than $1.2 billion between 1997 and 2013, but on what, exactly? We want to presume it was for expenses that truly benefited the university – that got the most bang for the donated buck – but there is no way to tell and, thus, no way for future donors to assess how well their own dollars might someday be put to use.
Such endowments are critical to all universities, public or private. In one way or another they help in some combination to keep student costs down and educational quality high. And for UB, there is plenty of room for growth.
According to U.S. News & World Report, Harvard University has the largest endowment, a staggering $36.4 billion. Leading the public universities was Texas A&M University-College Station, with an endowment of $10.5 billion.
The University at Buffalo doesn’t come close. But as the UB Medical School prepares to move downtown, into the health care dynamo of the Buffalo Niagara Medical Campus, and as the city, itself, continues its resurgence, the opportunities for growth will expand greatly.
The foundation needs to be prepared to take advantage of that opportunity. That is in the university’s interest, in the public’s interest and in the foundation’s interest, as well. Many factors go into such preparedness, but transparency is clearly among them. And secrecy is a deterrent.
Sometimes, organizations hoard information simply because they don’t feel the need to share it. Sometimes, they don’t want observers to know what they are doing. Whatever the reason at the UB Foundation, failure to disclose fundamental information about its finances can only depress its growth and, thus, harm its ability to support the university. It should aim to do better.