Shannon Watkins of the Martin Center shares her concerns about oversight connected with university foundations.

As public institutions funded by taxpayers, state colleges and universities are limited in the kinds of commercial activity in which they can participate. This is particularly so when it comes to university land or property.

However, through the use of institutionally affiliated—but still private—non-profit “foundations,” universities have found a convenient way to bypass these restrictions on commercial activities.

Consequently, some have raised the claim that—despite their non-profit status—university foundations should be subject to university policies and oversight given their relationship and involvement with taxpayer-funded schools. Nevertheless, many foundations continue to operate as legal loopholes that enable public colleges and universities to freely compete in the business sector.

The most recent example of questionable dealings between a university and its foundation is at the University of North Carolina at Charlotte. The university has long planned to erect a university-affiliated hotel and conference center on its premises. Now, that plan is coming to fruition with the help of UNC-Charlotte’s foundation. The hotel will have 226 rooms and about 24,000 square feet of conference space. Marriott International, the hotel chain, will operate the new facility. And the project is slated to cost about $84 million.