IX - 6.00 POLICY ON USE OF FOUNDATION AND ALUMNI ASSOCIATION FUNDS TO PROVIDE ECONOMIC BENEFITS TO USM EMPLOYEES
Approved by the Board of Regents, July 11, 2002
This policy provides guidance to institutions and the University System of Maryland Office on the use of foundation or independently incorporated alumni association funds (External Funds) for the benefit of University System of Maryland (USM) employees. System employees also need to ensure that their actions are consistent with the Maryland Public Ethics Law.
External Funds may be used to provide economic benefits to USM employees only if consistent with this policy. USM employees are not to receive any economic benefit directly from an affiliated foundation or alumni association, except as provided for herein. As used herein, "economic benefits" includes cash awards or salary supplements and non- monetary items, such as personal property.
III. Use of External Funds for Benefit of USM Employees
A. An institution may develop award programs which use External Funds for the benefit of USM employees if the institution ensures that there is adequate independence of the recipients of awards from the funding source (for example, an affiliated foundation). The award program must:
1. Be established in writing and formally approved by the Vice President for Administration of the institution;
B. Economic benefits to USM employees, which are of insignificant or low value that would qualify as De Minimis under IRS regulations, may be received directly from an affiliated foundation or alumni association. Benefits received from alumni associations by System employees that are a result of membership are excluded from this policy.
2. Identify the funding source (foundation or alumni association), the eligibility and selection criteria, the award amount and the selection mechanism;
3. Utilize External Funds in a manner consistent with the understanding of the funding entity (foundation or alumni association) and its donors if any restricted gifts are being used for the program, and;
4. Ensure that none of the award recipients have duties relating to the foundation or alumni association (or its donor) providing the External Funds, or duties relating to the award program itself. The use of External Funds to support the salary of a System employee does not disqualify the System employee from participating in an award program.
C. USM employees who provide services to affiliated foundations for the benefit of the institution, may be compensated, or provided honoraria, directly by the affiliated foundation. Institutions are to implement policies and procedures to ensure that foundation compensated services or honoraria are for activities conducted by the affiliated foundation, and NOT by an institution of the University System of Maryland. Institutional policies and procedures should seek to ensure that supervisors of System employees with employment relationships with affiliated foundations are aware of the relationships. Dual employment situations should be considered carefully in the context of State Ethics Law, as well as paragraph 9 of Board of Regents Policy IX-2.00 -POLICY ON AFFILIATED FOUNDATIONS. All compensation arrangements involving the Chancellor and institutional presidents using funds of affiliated foundations are to be approved by the Board of Regents.
D. This policy does not preclude the use by an institution President, or the Chancellor of an official residence owned by an affiliated foundation or alumni association, provided such use has been approved by the Board of Regents.
E. External Funds from an affiliated foundation or alumni association may be used to support a specific USM position, provided that the person in that position does not have the ability to influence the foundation or association in decisions on the level of funding for the position. Notwithstanding the foregoing:
(1) Fundraising for an Endowed Chair or Professorship is permitted; and
F. An affiliated foundation or alumni association may directly reimburse a System employee for System employment-related expenses, provided that the amounts reimbursed are reasonable, have a legitimate business purpose in the context of the work activity being performed (e.g. fundraising), and are approved by the employee's supervisor or designee, in advance of submission to the foundation or association. In the case of an institution's president, such expense reimbursements must be reported annually to the Office of the Chancellor by September 30 for the preceding fiscal year, and reviewed by the office of Internal Audit.
(2) External Funds received by an institution pursuant to a grant (or subcontract) with an affiliated foundation or alumni association may be used (in accordance with the provision thereof and institutional policy) to support a specific position where the person in that position has assisted in securing the underlying funding for the affiliated foundation or alumni association.
G. System employees whose spouse or other family members receive benefits from affiliated foundations or alumni associations must ensure that such arrangements do not constitute violations of the State Ethics Law.
Each Chief Executive Officer shall identify his/her designee(s), if appropriate, for this policy; shall develop procedures to implement this policy; and shall forward a copy of such procedures to the Chancellor.