V340.02 VCSU FOUNDATION MEMORANDUM OF UNDERSTANDING
Article I - Preamble
THIS AGREEMENT is entered into as of this 22nd day of July, 2013, by and between Valley City State University (VCSU or University) and the Valley City State University Foundation (Foundation).
The Foundation was organized and incorporated in 1996 for the purpose of stimulating and overseeing voluntary private support from alumni, friends, corporations, foundations, and others for the benefit of Valley City State University.
The Foundation exists to raise and manage private resources of time, talent, and financial contributions to support the mission and priorities of the Valley City State University, and provide opportunities for both the students and the university that are not funded through state funds.
The Foundation is dedicated to assisting the university in building and managing the Foundation's operating, scholarship, and endowment funds and in addressing, through financial support, the long-term academic and other priorities of the University.
As stated in its articles of incorporation, the Foundation is a separately incorporated 501 (c) (3) organization and is responsible for identifying and nurturing relationships with potential donors and other friends of Valley City State University; soliciting cash, securities, real and intellectual property, and other private resources for the support of Valley City State University; and acknowledging, stewarding and responsibly growing such gifts in accordance with donor intent and its fiduciary responsibilities.
Furthermore, in connection with its fund-raising and asset-management activities, the Foundation allocates operating funds to the University for personnel experienced in planning for and managing private contributions and works with the University to assist and advise in such activities.
In consideration of the mutual commitments herein contained, and other good and valuable consideration, receipt of which is hereby acknowledged, the parties agree as follows:
Article II - Foundation Name, Seal, and Logotype
Consistent with its mission to help to advance the plans and objectives of the University, the Foundation is granted the use of the name and logotype of Valley City State University in its pursuit of approved Foundation functions and activities.
Article III - System Governance
A. The State Board of Higher Education is responsible for overseeing the mission, leadership, and operations of Valley City State University.
B. The State Board of Higher Education is responsible for setting priorities and long-term plans for Valley City State University.
C. The State Board of Higher Education is legally responsible for the performance and oversight of all aspects of Valley City State University operations.
D. The State Board of Higher Education is responsible for the employment, compensation, and evaluation of all Valley City State University employees, including the President.
Article IV - The Foundation's Relationship to the Institution
A. The Foundation is a separately incorporated 501 (c) (3) nonprofit organization created to raise, manage, distribute, and steward private resources to support the mission and goals of the University.
B. The Foundation board of directors is responsible for the control and management of all assets of the Foundation, including the prudent management of all gifts consistent with donor intent.
C. The Foundation is responsible for the performance and oversight of all aspects of its operations based on a comprehensive set of bylaws that clearly address the board's fiduciary responsibilities, including expectations of individual board members based upon guidelines, policies and clear ethical standards.
D. The Foundation is responsible for providing operating grants to sufficiently support the employment of Advancement personnel, as mutually agreed with the President of the University.
E. The Foundation may earmark a portion of its unrestricted funds to a discretionary fund for use by the President of the University in pursuit of University and Foundation goals and will either transfer a percentage of those funds annually to the University in compliance with state law and University policies or reimburse appropriate presidential expenditures. All such expenditures must comply with the I.R.S. 501 (c) (3) code and be consistent with the Foundation's mission. Such funds will be subject to a compilation, review, or audit at the discretion of the Foundation Board.
Article V - The Institution's Relationship to the Foundation
A. The President of the University is responsible for communicating VCSU priorities and long-term plans, as approved by the State Board of Higher Education, to the Foundation.
B. VCSU recognizes that the Foundation is a private corporation with the authority to keep all records and data confidential consistent with the law, including North Dakota’s open records law. The Foundation agrees that to the extent it is determined that North Dakota’s open records laws apply to Foundation activities, its officers and employees will cooperate with VCSU and make it’s records related to those activities available as required by law.
C. The Foundation Director shall report to the President of the University. The Foundation Director is evaluated by the President of the University and the Foundation board Executive Committee.
D. Staff members of the Foundation and Advancement office shall report to the President of the University. Foundation directors and staff members shall be active participants in the University's strategic planning process.
E. The University shall include the Foundation, its chief executive and board of directors as active and prominent participants in strategic planning for the University.
F. The President of the University shall serve as an ex-officio voting member of the Foundation board and shall assume a prominent role in fund-raising activities.
G. In consideration for Foundation services, VCSU will provide the Foundation, at no cost, with office space, computer and telephone systems, utilities, custodial services, technology support, online access, and other such services as mutually agreed that may be necessary or required to fulfill its responsibilities and obligations. The University will provide adequate advancement office personnel for a fee, payable by the Foundation, to be determined annually. Long distance, postage, duplicating, printing, and other variable expenses will be provided at standard rates for university entities. Unless specifically itemized, the University is the presumed owner of all office equipment. However, the Foundation shall own the computer server(s) and donor records used for Foundation business. The parties agree that the value of Foundation services and contributions is significantly greater than the value of services and support provided by VCSU to the Foundation.
H. Valley City State University shall establish and enforce policies and practices that support the Foundation's ability to respect the privacy and confidentiality of donor records to the extent allowed by State Board of Higher Education policies and State of North Dakota laws.
Article VI - Foundation Responsibilities
1) The Foundation shall create an environment conducive to increasing levels of private support for the mission and priorities of Valley City State University.
2) The Advancement Office, with approval from the President of the University and the Foundation Board, is responsible for planning and executing comprehensive fund-raising and donor-acquisition programs in support of the University's mission. These programs include annual giving, major gifts, planned gifts, special projects, and campaigns as appropriate.
3) The Foundation will establish, adhere to, and periodically assess its gift-management and acceptance policies. Through the advancement staff, it will promptly acknowledge and issue receipts for all gifts on behalf of the Foundation and the University and provide appropriate recognition and stewardship of such gifts.
4) Valley City State University and the Foundation collaboratively bear major responsibility for fund-raising. University and Foundation representatives will coordinate fund-raising initiatives, including major gift solicitations, with the Foundation.
5) The President of the University will work in conjunction with the leadership of the Foundation board and the Foundation chief executive to identify, cultivate, and solicit prospects for private gifts.
6) The Foundation shall not accept grants from state or federal agencies, except in special circumstances that are approved by the Foundation board of directors and the governmental agency.
B. Asset Management
1) The Foundation will establish asset-allocation, disbursement, and spending policies that adhere to applicable federal and state laws including the Uniform Prudent Investor Act (UPIA) and the Uniform Management of Institutional Funds Act (UMIFA).
2) The Foundation will receive, hold, manage, invest, and disperse contributions of cash, securities, patents, copyrights, and other forms of real and intellectual property, including immediately vesting gifts and deferred gifts that are contributed in the form of planned and deferred-gift instruments. VCSU Agrees to encourage donors and prospective donors to make donations and bequests to the Foundation and not directly to VCSU. However, as required by North Dakota law, VCSU must retain ownership and control of donations and bequests made to VCSU and may not transfer ownership or tile to VCSU donations and bequests to the Foundation. Consistent with donor intent, subject to SBHE Policy 810 and to the extent permitted by applicable by applicable law, the parties agree that the Foundation shall manage, invest and account for VCUS donations and bequests on behalf of VCU and the parties agree to enter into a separate Financial Services Agreement implementing this understanding.
3) The Foundation will engage an independent accounting firm to conduct an audit of the Foundation's financial records. The Foundation shall comply with the requirements stated in SBHE Policy 340.2 related to GAAP-compliant financial statements and an annual GAAP audit, including submission by September 15 each year of the annual audit or draft of an audited financial statement submitted for and pending Foundation Board approval.
C. Institutional Flexibility
1) The Foundation will explore current opportunities, including acquisition and management of real estate on behalf of the Valley City State University for future allocation, transfer, or use.
2) The Foundation may serve as an instrument for entrepreneurial activities for the University and engage in such activities as purchasing, developing, or managing real estate for University expansion, student housing, or retirement communities. It also may hold licensing agreements and other forms of intellectual property, borrow or guarantee debt issued by their parties, or engage in other activities to increase Foundation revenue with no direct connection to a University purpose.
3) When distributing gift funds to the University, the Foundation will disclose any terms, conditions, or limitations imposed by donor or legal determination on the gift. Unless such terms are inconsistent with applicable law or SBHE policy, VCSU will abide by such restrictions and provide appropriate documentation to the Foundation.
D. Transfer of Funds
1) The Foundation is the primary depository of private gifts and will transfer funds to the designated entity within the institution in compliance with applicable laws, University policies, and gift agreements.
2) The Foundation's disbursements on behalf of the University must be reasonable business expenses that support the institution, are consistent with donor intent, and do not conflict with applicable laws and University policies.
Article VII - Foundation Funding and Administration
A. The Foundation is responsible for establishing a financial plan to underwrite the cost of Foundation programs, operations, and services. The financial plan and corresponding operating budget shall be presented annually to the Foundation board for approval prior to the commencement of a new fiscal year.
B. The Foundation has the right to use a reasonable percentage of the annual unrestricted funds, assess fees for services, or impose gift taxes, to support its operations.
C. The Foundation shall maintain, at its own expense, copies of the plans, budgets, and donor and alumni records developed in connection with the performance of its obligations.
D. The Foundation will provide access to data and records to the University on a need-to-know basis in accordance with applicable laws, Foundation policies, and guidelines. The Foundation will provide copies of its annual report, and other information that may be publicly released.
E. Neither the Foundation nor the University shall create any liability to the other except that which is expressed herein.
Article VIII - Terms of the Memorandum of Understanding (MOU)
This Memorandum of Understanding, made this 22nd day of July, 2013, by and between the President of Valley City State University and the Foundation (an Internal Revenue Code 501 (c) (3) nonprofit corporation), is intended to set forth policies and procedures that will contribute to the coordination of their mutual activities.
The term of this Memorandum of Understanding is one year, beginning July 22, 2013. This Memorandum of Understanding shall be reviewed annually and, subject to required annual review and agreement on amendments or revisions or termination by a party with required notice, shall be automatically renewed for a like term. A Copy of the agreement shall be filed with the NDUS General Counsel.
To ensure effective achievement of the items of the agreement, the University and Foundation officers and board representatives shall hold periodic meetings to foster and maintain productive relationships and to ensure open and continuing communications and alignment of priorities.
Either party may, upon 90 days prior written notice to the other, terminate this agreement. Notwithstanding the forgoing, either party may terminate this MOU in the event the other party defaults in the performance of its obligations and fails to cure the default within a reasonable time after receiving written show cause notice.
Provided that any VCSU obligation is subject to limitations imposed by North Dakota law and available appropriations and provided that neither party shall be liable for any obligation incurred by the other party on its behalf absent lawful authority to incur the obligation, a termination of this Memorandum of Understanding by either party shall be without prejudice to existing obligations incurred by one part on behalf of the other, and each party shall be responsible and liable for its own debt and legal obligations, including those lawfully incurred on its behalf by the other.
Consistent with provisions appearing in the Foundation's bylaws and its articles of incorporation, should the Foundation cease to exist or cease to be an Internal Revenue Code 501(c)(3) organization, the Foundation will transfer its assets and property to the University, to a reincorporated successor Foundation, or to the state or federal government for public purposes, in accordance with the law and donor intent.
IN WITNESS WHEREOF, the parties have caused this Memorandum of Understanding to be executed by their duly authorized officers as of the day and date first above written.
Valley City State University
Board of Valley City State University Foundation
Sponsor: Executive Director of University Advancement
Approved by the VCSU Foundation Board: 12/2/2006