Researcher: MGS Page 1 3/29/21
OLR Bill Analysis
SB 996
AN ACT CONCERNING FUNDRAISING BY THE FOUNDATION OF
THE UNIVERSITY OF CONNECTICUT.
SUMMARY
By law, UConn must have a written operating agreement with the
UConn Foundation (“the foundation”) that governs their relationship,
with specific provisions about the cash compensation paid by the
university to the foundation. These provisions generally require
UConn to (1) decrease and eventually eliminate payments to the
foundation as the market value of its endowment exceeds specified
thresholds and (2) increase payments if the endowment’s market value
falls below those thresholds.
This bill requires the agreement to include a provision by which
existing law’s payment reduction schedule would not apply in any
fiscal year when the foundation’s average fundraising for the previous
two years is at least five times its average compensation from UConn
during the same period.
EFFECTIVE DATE: July 1, 2021
CONTRACTUAL PROVISIO NS GOVERNING CASH
COMPENSATION PAID TO THE FOUNDATION
All foundations related to public higher education institutions must
enter into a written operating agreement with those institutions. For
UConn and its foundation specifically, the agreement must provide
that UConn decrease payments to the foundation in a fiscal year (1)
from the greater of the amount paid in the preceding fiscal year or the
base fiscal year 2016 and (2) by a schedule outlined in the table below.
Table 1. Schedule of Reduced Payments from UConn
to the Foundation Under Existing Law
Change in Cash Compensation Market Value Threshold of 2021SB-00996-R000195-BA.DOCX
Researcher: MGS Page 2 3/29/21
Paid by UConn to the Foundation the Foundation’s Endowment Fund
(as of January 1 of preceding FY)
Decrease of $1 million $500 million to less than $700 million
Decrease of $1.5 million $700 million to less than $900 million
Decrease of $ 3 million $900 million to less than $1.25 billion
No compensation permitted $1.25 billion or more
Source: (CGS § 4-37f(10)(E))
If the endowment fund’s market value decreases to an amount
below any of the above thresholds as of January 1 of the preceding
fiscal year, then UConn must increase its payments to the foundation
to the same amount that it paid before the threshold was exceeded.
These increased payments would continue until the July 1 following a
January 1 on which the market value of the endowment fund once
again exceeds the threshold (CGS § 4-37f(10)).
The bill requires the agreement to include a new provision under
which existing law’s scheduled payment reductions would not apply
in any fiscal year when the foundation’s two-year average of total gifts
and commitments raised for the preceding two fiscal years, according
to its annual report to the Higher Education and Employment
Advancement Committee and legislative leadership, is at least five
times its average compensation from UConn during the same period.
COMMITTEE ACTION
Higher Education and Employment Advancement Committee
Joint Favorable
Yea 22 Nay 0 (03/11/2021)