The Daily Agenda: The UA Foundation is a billionaire!
There’s been a lot of talk about the UA’s finances … But not as much about the foundation that supports it … County supervisors can't decide on jail.
It’s been another busy week in University of Arizona news, with embattled President Robert C. Robbins announcing yesterday his (eventual) resignation from the post.
Robbins’ announcement comes on the heels of last week’s bombshell by the Arizona Republic that a lobbyist hired by the university’s foundation to build relations between the school and Morocco actually spent his time trying to get California officials to eliminate fines levied against the controversial online school purchased by the UA.
Since the UA is a public institution, it can’t receive charitable contributions. That’s where the nonprofit University of Arizona Foundation comes into play. Every donation that benefits the UA must go through the foundation, which is sitting on a big pile of money: At the end of the 2022 fiscal year, the UA Foundation reported $1.4 billion in total assets.
Robbins, who sits on the UA Foundation’s board of trustees, signed off on the lobbyist’s hiring to the tune of $10,000 a month. He repeatedly told the Republic that this person had no role in mitigating risk from the purchase before eventually modifying his answer.
Until now, Robbins had only been called out for his role in the UA’s current financial state. But this news opened the door to questions about his involvement in spending by the UA Foundation, which brought in $279 million in revenue in the 2021-22 fiscal year, according to its 2022 tax return (the most recent year available.)
That’s a lot of money— about $100 million more than the UA’s budget deficit. And that’s just a single year’s worth of revenue. It also reported $239 million in liabilities, or money owed, but details about those debts and expenses weren’t listed on the return.
By comparison, the ASU Foundation reported roughly $295 million in revenue that same year and a total of $1.7 billion in assets. But the ASU Foundation serves a student body nearly twice the size of the UA’s, according to the Arizona Board of Regents website.
So where does all that UA Foundation money come from and what exactly is it being spent on?
Contributions
We heard earlier this year that donors were footing part of the bill for athletic department salaries (we still haven’t been told how much) but beyond athletics, donor support is a big part of the UA’s operations.
During that 2021-22 fiscal year, the foundation reported about $168 million in gifts, grants, contributions, and membership fees.
Good luck finding out who’s behind those contributions or even how much comes from each person. The tax return posted to the UA Foundation’s website is missing the section to report details about its contributions.
We turned to ProPublica’s Nonprofit Explorer to find the foundation’s Schedule B documents, but they didn’t shed any more light on the people behind the money. The section where the organization can list individual names and dollar amounts of its contributors says only “restricted.”
That’s not very transparent.
Most of the remaining $111 million in revenue came from investment income, and we’ll get into details about those investments shortly.
Payroll
While it brought in nearly $280 million in revenue, the foundation only spent $149 million. About $2.5 million of that went towards salaries for a dozen well-paid employees.
At the top of that list was President and CEO John-Paul Roczniak, with an annual salary of $462,846. Three senior vice presidents were paid a combined $719,000 and another eight employees were each paid six-figure salaries.
It’s also worth noting that the foundation reported another 33 officers, directors, trustees and employees and has 130 volunteers who all went unpaid.
But what stood out to us was that, in addition to compensation for the named employees, the tax return showed another $6.2 million in undesignated salaries and wages with no additional information about who received the money.
That also seems less than transparent.
Investments
The bulk of the foundation’s expenses — $107 million — went towards grants and “assistance to domestic organizations and domestic governments,” but no additional details were provided.
The return also doesn’t include specifics about the types of grants and assistance it provides, saying only that the foundation supports the UA primarily through fundraising and asset management.
It also spent $13 million in investment management fees for the foundation’s $1.3 billion in publicly traded and other securities. That same year, the foundation reported a $141 million loss from those investments.
Securities make up $862 million of the investments, including $244 million in private capital limited partnerships, $110 million in natural resources and $245 million in hedge funds.
The foundation’s money isn’t all staying stateside. It has millions invested in overseas interests, including $247 million in Central America and the Caribbean and $60 million in Europe.
On what? The tax return doesn’t say, so your guess is as good as ours.
Details (or a lack thereof)
It’s impossible from the tax return to determine what colleges, programs and initiatives are benefitting from the UA Foundation, since the return doesn’t include any of those specifics, saying only that the foundation supports the UA primarily through fundraising and asset management.
But the ASU Foundation’s tax return was a lot more transparent, providing specific dollar amounts for how much it spent on research funding, programs that assist students and support for students and faculty.
How about that?
With Tax Day just over a week away, we’ll be keeping an eye out for the foundation’s latest tax return and will report on what we find. Hopefully, with the increased scrutiny on the UA”s finances, the foundation will take the initiative and provide some more information about its revenue stream and contributions.
In the meantime, we’ll just keep wishing and hoping that the UA decides to fill some of our outstanding public record requests.
Guideposts ahead: The Tucson Sentinel’s Jim Nintzel lays out who made the ballot in this year’s local elections. Candidates had to turn in signatures on Monday to make it on the ballot, and some of them fell short. The Sentinel is launching their election guide with details about local candidates and the dynamics of local races, as well as their mission for covering the elections.
Still at a crossroads: The Pima County supervisors don’t agree on what to do about the county jail or what the county’s responsibilities are, Arizona Public Media’s Hannah Cree reports. At Tuesday’s meeting, they offered different visions of what they want done while County Administrator Jan Lesher puts together a task force to set up a commission she’s calling the Justice System and Infrastructure Review Committee.
Cash shortfall: City of Tucson officials are expecting to get $27 million less from the state than they did last year, KGUN’s Alex Dowd reports. Officials said at a budget town hall Tuesday that the city gets 12% of its income from the state, which they’re expecting to be about $117 million this year. They attributed the shortfall to the state’s 2.5% flat tax rate on income, which went into effect last year.
Struggling faculty: Morale is suffering among faculty at the University of Arizona, the Arizona Daily Star’s Ellie Wolfe reports. At a Faculty Senate meeting this week, Senate Chair Leila Hudson said her colleagues are retiring early, which is emotionally hard, as well as adding to the workload of those who stay at the UA. At the same time, programs are being cut, particularly in interdisciplinary programs.
Veto stamp comes back out: Gov. Katie Hobbs vetoed 15 bills on Tuesday, including one that would make it a felony for protesters to block roads, Capitol Media Services’ Howard Fischer reports. Hobbs cited constitutional freedoms and the fact that such activity is already a misdemeanor if it creates an inconvenience or hazard. The bills she vetoed deal with requiring people who receive food stamps to participate in training programs, a ban on guaranteed income, teaching about communism, and others.
Pets in crisis: With 555 dogs in the shelter, Pima Animal Care Center is at 142% capacity and needs emergency fosters to help alleviate a situation that Director Monica Dangler called “absolutely critical.” To help get more dogs out of the shelter and into homes, PACC is offering a $50 credit to their on-campus Central Pet store to anyone who adopts or commits to a two-week foster period. Dangler said that if PACC isn’t able to immediately reduce the number of dogs, they’ll have to consider deadlining healthy, adoptable dogs for euthanasia.
We’ve given you plenty of numbers to digest today, so how about some civic engagement instead?
Join the Pima County Interfaith Community Council and special guests Pima County Recorder Gabriella Cázares-Kelly and Elections Director Constance Hargrove on Saturday at 11 a.m. at Mount Calvary Missionary Baptist Church (210 E Lester St.) for a voting civic academy. Officials will provide information about mail-in voting and how they maintain integrity and safety in elections. The event is free and open to the public, but advance registration is required. If you aren’t able to attend this session, there will be two additional sessions on April 20 and May 7. Find details and register here.
Well, Robbins had to go. University Foundations are frequently flush with dinero. Folks leave them money in their trusts & living wills and such.