CSULB Foundation: shows you the money

By Mike Kilroy
Summer Forty-Niner

Although it oversees the financial management of programs that affect hundreds if not thousands of students at Cal State Long Beach, the CSULB Foundation remains largely a mystery to many on campus.

Located on private land on State University Drive across from the Social Sciences/Public Affairs Building, the CSULB Foundation was created in 1956 and is the money manager for the California Repertory Company, CSULB Alumni, numerous department grants and student scholarships,  a planned technology park, the Pyramid, and a wide variety of other university programs, including this newspaper.

It has nearly $90 million in assets, and invests in stocks and bonds. Yet the foundation is strictly a non-profit organization, known as a 501(c) (3) in tax
code, whose sole purpose is to serve the university.

"The foundation is essentially a legal circumvention of state laws," said Joseph Latter, assistant treasurer of the foundation's board of directors. Latter also serves as associate vice president of financial management for the university.

"There's a lot of things you can do in a non-profit organization that the state can't," Latter said.  "As a state agency, there are rigorous laws of how we handle money, how we invest money and how we buy things."

Most of the foundation's funds stem from federal and state grants, as well as private gifts, contracts and grants, according to its 1999 annual report.

"If it's 'soft' money, if it's non-state, then it can go to us," said Sandra VanderHeyden, the foundation's executive director.  "Scholarship and endowment money can, too, unless restricted by the donor."

While faculty have the option to work through CSULB's business office, it is discouraged by the university, VanderHeyden said.

"The university doesn't feel it has the staff or capability to handle those kinds of activities," she said.  "We have special staff that are trained in managing those kinds of soft monies such as contracts, grants and special programs."

One point of contention by some departments working with the foundation is its  6 percent check-writing fee.  According to Janna Tenenbaum, deputy executive director of the foundation, the fee is misunderstood.

"You can't really call it a charge to process a check," Tenenbaum said.  "It's much more comprehensive than that."

Tenenbaum said the foundation doesn't charge for financial audits and statements, payroll taxes, petty cash administration, legal research and investigation and other services which are partially reimbursed by the check-writing fee.

In addition to managing university program finances, the foundation can actively increase revenues through its own enterprises not necessarily tied to the university, such as doing payroll services for the City of Long Beach's community development department, or offering video-conferencing services to private firms.  Although a non-profit organization, the foundation works as the "entrepreneurial arm" of the university, according to VanderHeyden.

"We bring our revenues back to serving the university," VanderHeyden said.  "Two million dollars will be given direclty to the university this year."

VanderHeyden said maintaining the legal separation between the university and the foundation isn't difficult, even though the two are inextricably
linked.

"We are very much aware of the laws regarding the foundation and the university," VanderHeyden said.

"One of the most important rules is that state general funds cannot be used to support foundation activities, and visa versa.  If we did, it would be a violation of our feduciary responsibility."

The greatest area of vulnerabality to illegalities at the foundation is expenditures, VanderHeyden said.

"We have a full contracts and grants program staff that review every expenditure that goes through to make sure there's no ambiguity or irregularities," she said.

Although funds are maintained separately, university and foundation employees do work jointly on projects.  One of the most prominent of these is the Technology Park, a 32-acre site in Long Beach that will be dedicated to growing high-tech start-up firms, potentially with the help of university researchers and student interns.  The site is scheduled for ground-breaking in September.

Vice President of Administration and Finance Bill Griffith worked with the foundation's Mo Tidemanis to secure the land when the Navy first made it available in 1995.

"Bill could've brought the land under the auspices of the university or the foundation, but because the foundation has less restrictions regarding operations and so forth, the decision was made to bring it here," VanderHeyden said.

As with most joint projects, the Technology Park is overseen by a task force composed of deans from the university's colleges, and a steering committee made up of mostly university officials, according to VanderHeyden.

All foundation activities are overseen by a board of directors that includes President Robert Maxson and all university vice presidents except Student
Services.  Also on the board are Long Beach business leaders and the president of Associated Students.

Responding to a question about the low-profile the foundation maintains at CSULB, VanderHeyden said, "We're facilitators, we're not the leaders on campus.  We provide the back-up services to the university."

The director said the foundation does publish a monthly newsletter and quarterly financial statements that are sent to every division at the university.  It also holds open board of director meetings at the Foundation Building.  The next meeting is scheduled for Aug. 24 at 3 p.m. in Room 204.