Â鶹´«Ã½ Foundation employees to continue co-employment relationship with Â鶹´«Ã½ under separate budget reporting structure
March 19, 2021
The exploration into separating Â鶹´«Ã½ Foundation employees from the Â鶹´«Ã½ budget has concluded, and the result is that Â鶹´«Ã½ Foundation staff will retain their current employment status. Outside legal counsel from Stoel Rives, received last week, concludes that current and future Â鶹´«Ã½ Foundation employees can continue in a co-employment relationship with the university, and maintain Â鶹´«Ã½ benefits, even though their employment starting in FY22 will be reported solely through the Â鶹´«Ã½ Foundation. The FY22 budget approved by the Board of Regents includes this proposal. This change in reporting has no bearing on the continued relationship between the Foundation and Â鶹´«Ã½.
Since October 2020, an executive team led by Michelle Rizk has been charged with reviewing the opportunity to transition Â鶹´«Ã½ Foundation employees off of the Â鶹´«Ã½ System budget and separating the 501(c)(3) organization from the Â鶹´«Ã½ System reporting. Dennis McMillian was engaged to work on details necessary to implement this transition with a focus on providing Foundation employees, Board of Directors, and other stakeholders with an outside and neutral contact to raise their concerns and questions. Stoel Rives provided legal guidance on any possible impacts to employee benefit plans and programs. The intent of the transition was to maintain existing Foundation employees without job loss or disruption in benefits.
Two factors drove this review. First is that a major criticism of Â鶹´«Ã½ is the size of administration, especially in the system office, and the practice of counting Â鶹´«Ã½ Foundation employees as Â鶹´«Ã½ System Office employees added to that perception. A second factor is that Â鶹´«Ã½ programs are in greater need of philanthropic support, and the Â鶹´«Ã½ Foundation actually needs to grow to support increased fundraising capacity across the Â鶹´«Ã½ system. The Â鶹´«Ã½ Foundation is largely self-funded and provides services on behalf of all parts of the system. As a result of the analyses and discussions over the past four months, both the Foundation and Â鶹´«Ã½ are better positioned to work together to enhance the seeking, securing and stewarding of philanthropic support for Â鶹´«Ã½A, Â鶹´«Ã½F and Â鶹´«Ã½S.
The System Office has submitted the FY22 budget to the State which includes removing the Foundation’s budget from the Â鶹´«Ã½ budget. The State is reviewing the change and assuming they accept it, this achieves the first objective of the transition proposal. Because Â鶹´«Ã½ will no longer include the Foundation’s budget, Foundation employees will no longer be reported under the System Office. Instead their budget, including employee compensation, will be reported through Â鶹´«Ã½ Foundation accounting and reporting.