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)
I. Purpose
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.
II. General
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:
· Be established in writing and formally approved by the
Vice President for Administration of the institution;
· Identify the funding source (foundation or alumni
association), the eligibility and selection criteria, the
award amount and the selection mechanism;
· 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;
· 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.
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.
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
(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.
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.
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.
IMPLEMENTATION PROCEDURES:
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.
