The Virginia Supreme Court sided with administrators at George Mason University in a closely-watched lawsuit challenging whether private fundraising foundations established by public universities can keep donor records secret.
The justices wrote in an opinion issued Thursday that private foundations, no matter how closely intertwined with the university they serve, are not public bodies for the purposes of Virginia’s Freedom of Information Act.
“Had the General Assembly intended the unreserved inclusion of non-profit foundations, that exist for the primary purpose of supporting public institutions of higher education, as public bodies under VFOIA, it could have so provided, but it has not,” they wrote.
A student group called Transparent GMU brought the lawsuit after the university foundation refused to turn over records of its agreements with private donors – a request sparked by questions about donations by conservative mega-donor Charles Koch and his family. (The organization’s work ultimately prompted an admission by school administrators that some of its agreements with donors “fall short of the standards of academic independence.”)
At oral arguments in September, Transparent GMU’s lawyer argued that an exemption for private foundations created by public bodies would allow them to sidestep the act’s requirements “merely by outsourcing one of their essential functions to a private corporation.”
To bolster its case, Transparent GMU noted that the head of the private foundation at GMU also serves as a vice president at the university and that the foundation itself is headquartered on GMU’s campus. The foundation’s director had testified at trial that the foundation staff are listed in GMU’s directory and that that the foundation pays more than 75 percent of the university president’s salary.
The justices ruled that isn’t enough to consider the foundation a public body under the law, reasoning that language in the code applies only to committees and subcommittees of public bodies.
“The Foundation and GMU operate at arms-length and, while they collaborate for the benefit of GMU, each maintains its independent status as a private non-stock corporation and a public institution for higher education respectively,” they wrote.
GMU’s foundation applauded the ruling in a statement, saying it affirms “that our donors have certain rights, including privacy, associated with their gifts” and will “reduce the hesitation of donors to make gifts, while simultaneously offsetting the need for greater public taxpayer support and higher tuition rates.”