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ASU Foundation:
Innovative or Odd?

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Fulton Center, home of the ASU Foundation for A New American University.
The Non-Profit, Founded In 1955 Has Collected And Dispersed Millions Over The Years, But Some Experts Say Transparency Is Lacking

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By Charles T. Clark
Arizona Center for Investigative Reporting
Special for Modern Times Magazine

July 25, 2017 — Over the past decade the ASU Foundation for a New American University, the nonprofit fundraising arm of Arizona State University, has brought in revenues upwards of $100 million per year and given more than $60 million in grants annually back to the university.

Incorporated in 1955, the foundation was envisioned as a way to support Arizona’s fastest-growing university. And throughout the years as ASU has grown, the foundation has become a crucial piece of university operations, offering support through a variety means including philanthropy, research funding and partnerships and investment.

In 2016, ASU Foundation was reorganized as a conglomerate of nonprofits known as ASU Enterprise Partners.

But while the foundation receives high marks from charity watchdog organizations for directing above-average portions of revenue to program services, experts in nonprofits say there are some oddities contained in ASU Foundation’s tax filings.

Following the publication of a 2008 report questioning whether Sybil Francis, the wife of ASU President Michael Crow, should have been employed by the foundation, Crow disappeared from the foundation’s list of board members in its tax filings for four of the next six years. Likewise, Francis no longer was reported as one of the organization’s highest-paid employees.

In subsequent years, Crow returned as a board member and Francis is again listed as receiving a salary.

In an emailed statement that a spokeswoman said could be attributed only to the ASU Foundation, the organization said Crow and Francis’ exclusion from the tax filings was inadvertent and blamed the errors on its accountant. Crow has been a voting board member since 2002, when he became president of Arizona State University, the foundation said in a written statement.
ASU Foundation has also spent exorbitantly on lobbying efforts, though it is unclear what changes in public policy they have sought. Public records indicate the organization has only recently hired lobbyists to represent it at the state Capitol, and its real-estate-investment subsidiary has a lobbyist to deal with matters in Tempe, where it is located.

The foundation said the money categorized as lobbying on federal tax forms wasn’t spent to directly influence elected officials, but was instead aimed at awareness campaigns intended to boost public support of education initiatives the foundation and ASU supported.

ASU Foundation officials would not agree to be interviewed on the record in response to the questions the Arizona Center for Investigative Reporting had after reviewing the organization’s tax filings for the past decade.

Since 2012, ASU Foundation has paid Francis more than $830,000 for her work, but has chosen to disclose her salary in an obscure section of the tax return that details payments to people with ties to board members instead of listing her among the organization’s highest-paid employees.

Eric Gorovitz, a principal attorney at Adler & Colvin, a San Francisco-based law firm that advises nonprofit organizations, characterized that as “odd,” and said it is concerning that the foundation would not be more explicit about the money it pays to the wife of the university president, who also sits on the board.

On the tax returns for the years 2012 to 2016, Francis is listed in a section near the end of the return that outlines business transactions with interested persons, and it is stated that her compensation is for employment. In all, she was paid $834,533 during that time.

Given that her annual compensation averages about $166,000, Gorovitz said she would likely be one of the top 20 highest paid employees or highest paid contractors, which are disclosed in a more prominent place near the beginning of the tax return.

“It might just be an optics problem,” Gorvitz said. “But I do get worried when they present it in this way.”
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