UH doubles payment to fund-raising arm
By Johnny Brannon
Advertiser Staff Writer
The University of Hawai'i has more than doubled the amount of public money paid to a foundation that raises private money to benefit the school. UH also has started paying half the salary of key foundation employees.
The changes, which took effect last week, increase the annual amount paid to the University of Hawai'i Foundation from $1 million to $2,350,000 for more than five years.
The increase is needed because the foundation is ramping up its fund-raising efforts and needs to build its capacity to track UH alumni and manage donations, said UH vice president for external affairs Paul Costello.
"The compensation has been historically low to the foundation when you compare it with other universities," he said. "It's an attempt to make that up, and it's an attempt to instill more resources so that the foundation can do its job for the university."
The UH Board of Regents approved the new contract at a meeting on Lana'i in September after twice extending the old contract for one- or two-month periods at meetings on O'ahu.
Costello said there had been no attempt to delay the new agreement until the Lana'i meeting to avoid public scrutiny, but acknowledged that such perceptions are sometimes a problem when meetings are moved to Neighbor Islands.
The foundation's financial help is extremely important to UH, he said, especially when times are hard and state support is limited.
"The job of the foundation grows that much more vital and important as we struggle with a downturn in the economy," Costello said.
Board of Regents chairman Bert A. Kobayashi did not return calls over several days.
The foundation is headed by Elizabeth "Betsy" Sloane, wife of UH Chief Financial Officer J.R.W. "Wick" Sloane. The longtime friends of UH President Evan Dobelle were hired in the last year.
The foundation has a staff of 52. Betsy Sloane said the contract would pay half the salaries of 11 fund-raising development officers now working, and another seven or so soon to be hired.
The contract also will allow the foundation to invest more in databases and other infrastructure needed to track alumni and donors and manage money.
"It runs the entire gambit of supporting the gift process," she said. "This money will help fund additional capacity for the foundation in order to raise the funding necessary to help the university up to the next level."
The contract says the foundation will try to raise $200 million to $250 million for the university, but Sloane said those are rough estimates. More firm goals will be established once the university finalizes its strategic planning for the future, she said.
"Once that is in place this fall, we will structure our fund-raising activities around the university's priorities," Sloane said.
One major priority will be the new medical center the university is building in Kaka'ako, she said. That effort already has begun, but Sloane declined to say how much had been raised.
"Monies have been raised and are in process, but we're not in the stage where we're announcing anything at this point," she said.
She would not say how much she is paid, but said the new contract would not increase her salary. Previous foundation presidents earned about $160,000.
According to the foundation's most recent tax return, it received nearly $29 million in revenue in the fiscal year ended June 2001, and expenses totaled about $16.6 million. Net assets were nearly $141 million.
Individuals and corporations that donate to the foundation typically deduct the amount from their taxes. Sloane said there are restrictions on how almost all that money can be spent.
Most of it is designated for specific projects, programs, scholarships or other efforts. Very little can be used to cover administrative expenses, she said, even if the goal is to raise more money for the university. So additional public money is needed.
Reach Johnny Brannon at jbrannon@honoluluadvertiser.com or 525-8070.
