Policy
THIS POLICY WAS RESCINDED JUNE 29, 2021
Original Issuance Date: January 25, 2019
Last Revision Date: May 29, 2019
1. Policy Purpose
The purpose of this policy is to establish standards that help ensure relationships between System, UW institutions and Primary Fundraising Foundations and Other Affiliated Organizations, including primary and real estate foundations, are productive, efficient, and beneficial to the UW System or a UW institution.
2. Responsible UW System Officer
Vice President for Finance
3. Scope
This policy applies to all Primary Fundraising and Affiliated Organizations that receive administrative support from the UW System or a UW institution.
4. Background
Primary Fundraising Foundations and Affiliated Organizations provide tangible and intangible value to the UW System and UW institutions, such as financial support and external relationships. They promote the UW System and UW institutions to varied audiences including alumni, community members, prospective students, current students, faculty, and staff, and sponsor activities that enhance the reputation and standing of the institutions.
However, UW System and UW institutions shall ensure that Primary Fundraising Foundations and Other Affiliated Organizations that receive administrative support do so in a manner consistent with the UW System’s or a UW institution’s mission and policies.
5. Definitions
Administrative Support: The personnel, facilities, or other monetary or material resources of UW System or a UW institution provided to a Primary Fundraising Foundations or Other Affiliated Organizations without direct and full reimbursement.
Other Affiliated Organization: An entity that is legally distinct from the University but is organized and operated for the benefit and in support of the University and/or conducts activities that advance the mission of the University. Unless otherwise expressly authorized by the Board of Regents, affiliated organizations must hold a valid tax-exempt organization and corporate status under federal and applicable state law. The definition of affiliated organizations for this exercise excludes the following:
- University-recognized student, faculty, or staff groups or organizations
- Advisory councils established under the auspices and direction of an academic or administrative official for the benefit of the unit
- Other state agencies or statutorily-created entities, such as the UW Hospitals and Clinics Authority
- Research sponsors
- Donors
- Licensees that do not otherwise have affiliate status
- University auxiliary enterprises
- Commercial contractors and vendors
- Consultants
- Lessors and lessees
- Labor unions
- Individuals, such as University retirees and alumni
- Institutions with which the University has programmatic affiliation agreements designed principally for student clinical program placements or scholar exchanges
- Subsidiaries of primary University foundations (covered under the 501(c)3 status of that primary foundation)
Primary Fundraising Foundations: Any entity subject to Regent Policy 21-9, Institutional Relationships with Foundations.
6. Policy Statement
On an annual basis, the UW System or institution shall provide an accounting of administrative support when the total administrative support provided to the Primary Fundraising Foundations or Other Affiliated Organization is valued at $100,000 or greater. This accounting shall include a comparison of administrative support provided and benefits received from the Primary Fundraising Foundation or Other Affiliated Organization, in a format developed by and submitted to the Vice President for Finance by March 31st following the end of a fiscal year. UW System Administration will annually provide a summary of reported administrative support and benefits received to the Board of Regents.
For Primary Fundraising Foundation, the UW System or institution shall enter into a memorandum of understanding (MOU) with the Primary Fundraising Foundation, in accordance with Regent Policy Document 21-9. For Other Affiliated Organizations, if the Other Affiliated Organization receives annual administrative support valued at $100,000 or greater in a calendar year, the System or UW institution must also have a written agreement with that entity within 6 months of that entity being identified by the UW System or UW institution as an Other Affiliated Organization that must report under this policy.
7. Related Documents
Regent Policy Document 21-9, Institutional Relationships with Foundations
8. Policy History
Revision 1: May 29, 2019
First Approved: January 25, 2019
9. Scheduled Review
May 2024
Guidance
Administrative Guideline for Institutional Relationships with Primary Fundraising Foundations and Other Affiliated Organizations for Capital and Real Estate Projects
Original Issuance Date: May 23, 2019 Last Revision Date: May 23, 20191. Publishing Office
The UW System Office of Capital Planning and Budget (CPB) is charged with the maintenance and communication of this guideline. Institutions involved in any legal or financial agreements related to real estate with a Primary Fundraising Foundation or Other Affiliated Organization (as defined in UW System Administrative Policy 362) shall consult this guideline prior to entering into any agreements or commitments.2. Affected Stakeholders on Campus
The primary offices required to actively participate in this guideline include business affairs, financial offices, advancement or development offices, and the facility or campus planning offices of any UW institution. When a real estate project is first considered, the lead campus partner will contact CPB to describe the scope of work and confirm the review and approval process. This guideline shall be distributed to:- Chancellors
- Chief Business Officers
- University Advancement Officers and staff
- Alumni Relations Officers and staff
- University Relations Officers and staff
- Facilities directors, physical plant directors, and campus planner staff
3. Primary Responsibility
The UW System Office of Capital Planning and Budget has the primary responsibility for developing, disseminating and addressing questions related to this guideline. Each chancellor has the primary responsibility for implementation and maintaining compliance at each UW institution. During the planning or development stage and prior to the execution of an agreement related to any real estate project, the UW Institution shall provide CPB with project details. CPB is responsible for distribution of the project information to the appropriate offices within UW System Administration for review and approval. The offices include but are not limited to the Office of General Counsel, Finance, Administration, and Risk Management. No UW institution may move forward with the project until CPB provides feedback on the proposed project.4. Guidelines
The University of Wisconsin System recognizes the important and valuable role that Primary Fundraising Foundations and Other Affiliated Organizations provide by supporting UW institutions. This support may take the form of several different types of partnerships. These partnerships can encompass all real estate development projects undertaken by a Primary Fundraising Foundation or Other Affiliated Organization, or an ownership entity where the Primary Fundraising Foundations and Other Affiliated Organizations is a partner; where the intent is for a UW institution to enter into any type of agreement for space and/or contribute financially to the project. This guidance specifies protocols for UW institutions as they contemplate partnerships for the development of real estate projects, as permitted in Regent Policy Document (RPD) 21-9, Institutional Relationships with Foundations, including Appendix A.A. Planning for Development
Each UW institution in the initial stage of planning a project must provide to CPB as soon as feasible, the following:- A description of the Primary Fundraising Foundation or Other Affiliated Organization including all possible partners.
- A projected timeline of the planning and development.
- A completed space needs form identifying the type of space required. Net new square footage requirements as delineated in the UWSA Criteria for Capital Budgeting must be met.
- A financing plan including a list of possible sources and uses of funds including segregated fees, program revenue, general operations, gifts, or grants. Uses of funds must include all applicable costs, including but not limited to rent, special equipment, tenant improvements, and operating expenses.
B. Legal Documentation and Review
CPB and the UW institution will develop a list of all related legal documents necessary to affect the project plan. CPB will coordinate legal review and compliance with the UW System Office of General Counsel.C. Required Approval for Financial and Development Structure
- Any real estate development or investment undertaken by a Primary Fundraising Foundation or Other Affiliated Organization that involves state or university funding requires the notification of and approval by the appropriate UW chancellor, the System President, and the Board of Regents within the limits contained in Regent Policy 12-1, 13-1, 13-2, 13-5, or 21-9. Other required approvals are summarized in table below.
- A Primary Fundraising Foundation or Other Affiliated Organization cannot legally obligate a UW institution or the UW System to secure the financing of a capital project for the benefit of the UW institution or UW System. Conversely, a UW institution cannot lease real property as a means to guarantee a Primary Fundraising Foundation or Other Affiliated Organization debt obligation related to investment in the real estate.
- As a state agency, the UW System and its institutions cannot secure or guarantee the debt or obligations of private entities, such Primary Fundraising Foundations or Other Affiliated Organizations.
- Approval of a Financial Plan
- If the development of the real estate will rely upon the use of program revenue funds or segregated fees to fund the development or operation of the project, the use of such fees must comply with all applicable Board of Regent, UW System, and UW institution policies and procedures.
- If the development of the real estate will rely upon the use of general purpose revenue to fund the development, the use must comply with all applicable Board of Regent and System policies and procedures as well as any applicable state or building commission requirements.
- The UW institution must demonstrate that the Primary Fundraising Foundation or Other Affiliated Organization or other partners do not require state of Wisconsin capital financing to proceed with the real estate development.
- The UW institution must provide confirmation of funding from their existing budget to cover the associated capital expenses including furniture, equipment, and tenant improvements.
- The UW institution must demonstrate funding from their existing budget is sufficient to cover any and all lease costs including increased operational costs such as utilities, cleaning, and maintenance.
D. Reporting
On a quarterly basis, the UW institution shall report the status of the project and confirm or amend the project plan and associated timeline in a format acceptable to CPB. CPB will distribute the project information to the appropriate UW System office, System President, or Board of Regents as necessary depending upon the project parameters. CPB provides a biannual report to the Board of Regents regarding all real estate activities in process, completed, or developed on behalf of a UW institution where the UW institution is a partner.E. Standardized Legal Documents
All leases, agreements or memoranda of understanding covered by this document, regardless of the delegation of signature authority or whether the institution is the lessee or lessor, shall utilize standard templates developed by CPB. Any amendments to these templates requires the review and approval of the UW System Office of General Counsel.| Required Approvals for Real Estate Development | |||||
| Chancellor or VC Chancellor of Finance | VC of Administration | Office of General Counsel | Board of Regents | State Building Commission | |
| RPD 12-1. Competition with the Private Sector | |||||
| Criteria for Judging the Appropriateness of Competitive Activities In addition to Chancellor, there is a committee from other university representatives, plus private sector and public at-large people. | X | ||||
| RPD 13-1 General Contract Approval, Signature Authority, and Reporting | |||||
| Grants from and contracts with for-profit entities with a value between $500,000 and $1,000,000 | X | ||||
| Grants from and contracts with for-profit entities with a value more than $1,000,000 | X | ||||
| RPD 13-2 Real Property Contracts: Signature Authority and Approval | |||||
| Sale of Real Property | |||||
| • outside of or if the project alters campus boundaries | X | ||||
| • involves agricultural land | X | ||||
| • is a state-owned residence hall sold to another state agency or non-profit for an alternate use | X | X | |||
| Acquisition of Real Property | |||||
| • is outside of or would alter campus boundaries | X | X | |||
| • Agricultural land under s. 36.33, Wis. Stats. | X | X | |||
| Leasing of Real Property | |||||
| • initial terms are equal to or less than $1.0 m and 5 years in length | X | ||||
| • initial terms are greater than $1.0 m and 5 years in length | X | ||||
| • all student housing leases | X | X | |||
| RPD 13-5 Capital Projects Solely Managed by UW System | |||||
| Capital project that the UW System solely manages costing more than $1.0 million | X | X | |||
| • a project exceeds the estimate budget previously authorized by the Board by 10 percent or more | X | X | |||
| •the scope of a project is materially altered from when the authorization was initially provided by the Board | X | X | |||
| System Policy 820: Segregated University Fees | |||||
| • Allocable SUF are allocated by students, in consultation with the Chancellor and subject to final approval by the Board. | X | X | |||