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http://www.ajc.com/metro/content/metro/0504/ugafoundation.html
UGA Foundation fights for life
By KELLY SIMMONS, ALAN JUDD
Published on: 05/27/04
The University of Georgia Foundation vowed to fight for its future Wednesday, even as the university formally cut ties to the fund-raising group torn by controversy over President Michael Adams.
In a two-sentence letter, Adams notified the foundation Wednesday that he was "terminating" its relationship with the university, as directed by the state Board of Regents. Under a 1996 agreement between the foundation and UGA, the university can part ways with the 67-year-old organization with 90 days' notice.
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"I regret that such action has become necessary," Adams wrote.
But as they opened their three-day annual meeting on Sea Island, foundation trustees made it clear they will not go quietly.
"I respectfully disagree that this organization is as dead as King Tut," trustee James Blanchard said. "We are a legally chartered entity."
Blanchard, chief executive of Columbus-based Synovus Financial Corp., was among the foundation leaders who advocated carrying on, with or without official recognition from the university or the regents.
"Nothing has changed," said foundation trustee Wyck Knox, an Augusta lawyer. "We are continuing to support the university."
The trustees' defiance seemed certain to intensify a yearlong conflict between two groups of powerful Georgians — the foundation and the regents — over leadership of the state's flagship university.
If the foundation persists, its trustees may find themselves battling the regents and the university over several key issues: control of the school's endowment, valued at $400 million in cash and securities and $240 million in real estate; collection of future donations; and even the foundation's name. The regents say UGA's name is their intellectual property, and only approved groups may use it.
Joel Wooten, the regents' vice chairman and spokesman on the issue, said Wednesday he hopes to meet with foundation leaders soon to work out details of a transition from the current group to a new UGA fund-raising organization. He downplayed the possibility of salvaging the relationship with the existing foundation.
"Anything is possible," Wooten said. "But there would have to be a wholesale change of attitude by some of the trustees before that could ever happen."
Wooten and other officials said they expect no disruption to scholarships, professorships and academic programs supported by the endowment. All but about 1 percent of the foundation's holdings are designated for specific purposes, and the trustees are obligated to disburse the money accordingly, say UGA and regents officials.
University officials have begun planning a new foundation to accept donations, and several boosters have volunteered to serve on its board. A new group could be operating within two weeks.
But officials worry that potential donors may be confused if the existing foundation continues raising money — especially if it still identifies itself with UGA.
"We do not think it would be proper for the foundation to continue to use the [university's] name if they are no longer recognized under Board of Regents guidelines," said Wooten, a lawyer from Columbus.
The foundation's lawyer, Floyd Newton of Atlanta, said the organization can continue operating, independent of the university, so long as it does not claim to be sanctioned by UGA.
"There's no reason why this corporate entity cannot continue . . . and that's exactly what they will do," Newton said from Sea Island.
Funding at stake
Still, staying in business poses financial challenges for the foundation. Without an official relationship with UGA, it would no longer receive funding from the university, would lose its state-paid staff and would no longer have access to its offices in a building the university leases in Athens.
UGA gives the foundation about $500,000 a year to help pay for its professional staff. In addition, the foundation collects about $250,000 from the sales of university-licensed merchandise and $575,000 from alumni memberships.
Newton said losing those funds would be at least partly offset if the foundation stopped contributing to Adams' salary and benefits and if it no longer paid for university administrators' perks, such as sky suites in Sanford Stadium, where UGA's football team plays.
Uncertainty over the future led the foundation's finance committee to postpone a vote on an $8 million operating budget for the next year. However, the committee took a swipe at Adams by rejecting the university's budget request for its ecotourism resort in Costa Rica, a pet project of the president's. Trustees complained that rental fees for the facility were not covering the operating costs as UGA officials had promised.
Foundation trustees continue their annual meeting today with a full board session in which they are scheduled to discuss the budget and vote on a slate of officers and new members that appears less supportive of Adams than the current board.
On Wednesday, trustees said the regents' decision to sever ties with the foundation blindsided them.
'Loss of confidence'
But Wooten, who becomes the regents' chairman in July, said frustration with the foundation had been building. He attributed the decision partly to "a loss of confidence that a certain group of the trustees were ever going to put aside personal feelings and really cooperate and work with the university president to move the mission of the school forward. . . . Unfortunately and very regrettably, there was a small group of trustees who were more interested in ousting the president."
Several trustees have been seeking to replace Adams since last summer, when he refused to renew the contract of UGA's legendary athletics director and former football coach, Vince Dooley.
The trustees, who insist they were not motivated by the decision on Dooley, commissioned a financial audit that suggested Adams had mishandled foundation accounts. But the regents immediately declared their support for Adams and asserted their control over the university's management.
Although the regents declared the matter closed, a core group of anti-Adams trustees continued pressing for his ouster. Some regents worried those efforts would endanger UGA's accreditation.
The Southern Association of Colleges and Schools, which accredits UGA, requires university presidents to be free from undue outside influences. Losing accreditation would make UGA students ineligible for federal financial aid and would make it tougher for them to gain admission to graduate schools.
The association never threatened UGA, said James Rogers, executive director of its Commission on Colleges. But he said Thomas Meredith, chancellor of the University System of Georgia, sought his opinion on using drastic measures to resolve the foundation conflict.
Rogers said the regents acted within their rights. "The fundamental question is, 'Who's in charge?' " Rogers said. "We want the board [regents] to be in charge."
The question of control could have come to a head this week during the foundation's annual meeting. Adams' opponents planned to propose eliminating or severely reducing the foundation's contribution to his pay package.
For several weeks, a few trustees, including Blanchard, had been negotiating a compromise with regents and Meredith. Blanchard said Wednesday the talks had not been contentious and seemed to be nearing resolution.
"We have absolutely broken our backs to be cooperative," Blanchard said. "I was totally stunned. I felt betrayed and angry."
Wooten agreed that both sides had talked extensively. But "it had stalemated," he said. "Matters were not going forward."
On Tuesday, when the regents held a four-hour, closed-door meeting, Wooten said the idea of disassociating with the UGA Foundation "evolved."
While discussing 16 new principles for "cooperative" organizations, he said, regents continually asked whether the UGA Foundation was meeting them. On most points, he said, the regents agreed the foundation was not.
"We felt there were so many of them," Wooten said. "One thing led to another."
By the end of the meeting, the regents had voted unanimously to instruct Adams to pull UGA out of the foundation.
Staff writer Patti Ghezzi contributed to this article. Staff writers Kelly Simmons' and Alan Judd's e-mail addresses are ksimmons@ajc.com and ajudd@ajc.com.
http://www.ajc.com/metro/content/metro/0504/ugafoundation.html
UGA Foundation fights for life
By KELLY SIMMONS, ALAN JUDD
Published on: 05/27/04
The University of Georgia Foundation vowed to fight for its future Wednesday, even as the university formally cut ties to the fund-raising group torn by controversy over President Michael Adams.
In a two-sentence letter, Adams notified the foundation Wednesday that he was "terminating" its relationship with the university, as directed by the state Board of Regents. Under a 1996 agreement between the foundation and UGA, the university can part ways with the 67-year-old organization with 90 days' notice.
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"I regret that such action has become necessary," Adams wrote.
But as they opened their three-day annual meeting on Sea Island, foundation trustees made it clear they will not go quietly.
"I respectfully disagree that this organization is as dead as King Tut," trustee James Blanchard said. "We are a legally chartered entity."
Blanchard, chief executive of Columbus-based Synovus Financial Corp., was among the foundation leaders who advocated carrying on, with or without official recognition from the university or the regents.
"Nothing has changed," said foundation trustee Wyck Knox, an Augusta lawyer. "We are continuing to support the university."
The trustees' defiance seemed certain to intensify a yearlong conflict between two groups of powerful Georgians — the foundation and the regents — over leadership of the state's flagship university.
If the foundation persists, its trustees may find themselves battling the regents and the university over several key issues: control of the school's endowment, valued at $400 million in cash and securities and $240 million in real estate; collection of future donations; and even the foundation's name. The regents say UGA's name is their intellectual property, and only approved groups may use it.
Joel Wooten, the regents' vice chairman and spokesman on the issue, said Wednesday he hopes to meet with foundation leaders soon to work out details of a transition from the current group to a new UGA fund-raising organization. He downplayed the possibility of salvaging the relationship with the existing foundation.
"Anything is possible," Wooten said. "But there would have to be a wholesale change of attitude by some of the trustees before that could ever happen."
Wooten and other officials said they expect no disruption to scholarships, professorships and academic programs supported by the endowment. All but about 1 percent of the foundation's holdings are designated for specific purposes, and the trustees are obligated to disburse the money accordingly, say UGA and regents officials.
University officials have begun planning a new foundation to accept donations, and several boosters have volunteered to serve on its board. A new group could be operating within two weeks.
But officials worry that potential donors may be confused if the existing foundation continues raising money — especially if it still identifies itself with UGA.
"We do not think it would be proper for the foundation to continue to use the [university's] name if they are no longer recognized under Board of Regents guidelines," said Wooten, a lawyer from Columbus.
The foundation's lawyer, Floyd Newton of Atlanta, said the organization can continue operating, independent of the university, so long as it does not claim to be sanctioned by UGA.
"There's no reason why this corporate entity cannot continue . . . and that's exactly what they will do," Newton said from Sea Island.
Funding at stake
Still, staying in business poses financial challenges for the foundation. Without an official relationship with UGA, it would no longer receive funding from the university, would lose its state-paid staff and would no longer have access to its offices in a building the university leases in Athens.
UGA gives the foundation about $500,000 a year to help pay for its professional staff. In addition, the foundation collects about $250,000 from the sales of university-licensed merchandise and $575,000 from alumni memberships.
Newton said losing those funds would be at least partly offset if the foundation stopped contributing to Adams' salary and benefits and if it no longer paid for university administrators' perks, such as sky suites in Sanford Stadium, where UGA's football team plays.
Uncertainty over the future led the foundation's finance committee to postpone a vote on an $8 million operating budget for the next year. However, the committee took a swipe at Adams by rejecting the university's budget request for its ecotourism resort in Costa Rica, a pet project of the president's. Trustees complained that rental fees for the facility were not covering the operating costs as UGA officials had promised.
Foundation trustees continue their annual meeting today with a full board session in which they are scheduled to discuss the budget and vote on a slate of officers and new members that appears less supportive of Adams than the current board.
On Wednesday, trustees said the regents' decision to sever ties with the foundation blindsided them.
'Loss of confidence'
But Wooten, who becomes the regents' chairman in July, said frustration with the foundation had been building. He attributed the decision partly to "a loss of confidence that a certain group of the trustees were ever going to put aside personal feelings and really cooperate and work with the university president to move the mission of the school forward. . . . Unfortunately and very regrettably, there was a small group of trustees who were more interested in ousting the president."
Several trustees have been seeking to replace Adams since last summer, when he refused to renew the contract of UGA's legendary athletics director and former football coach, Vince Dooley.
The trustees, who insist they were not motivated by the decision on Dooley, commissioned a financial audit that suggested Adams had mishandled foundation accounts. But the regents immediately declared their support for Adams and asserted their control over the university's management.
Although the regents declared the matter closed, a core group of anti-Adams trustees continued pressing for his ouster. Some regents worried those efforts would endanger UGA's accreditation.
The Southern Association of Colleges and Schools, which accredits UGA, requires university presidents to be free from undue outside influences. Losing accreditation would make UGA students ineligible for federal financial aid and would make it tougher for them to gain admission to graduate schools.
The association never threatened UGA, said James Rogers, executive director of its Commission on Colleges. But he said Thomas Meredith, chancellor of the University System of Georgia, sought his opinion on using drastic measures to resolve the foundation conflict.
Rogers said the regents acted within their rights. "The fundamental question is, 'Who's in charge?' " Rogers said. "We want the board [regents] to be in charge."
The question of control could have come to a head this week during the foundation's annual meeting. Adams' opponents planned to propose eliminating or severely reducing the foundation's contribution to his pay package.
For several weeks, a few trustees, including Blanchard, had been negotiating a compromise with regents and Meredith. Blanchard said Wednesday the talks had not been contentious and seemed to be nearing resolution.
"We have absolutely broken our backs to be cooperative," Blanchard said. "I was totally stunned. I felt betrayed and angry."
Wooten agreed that both sides had talked extensively. But "it had stalemated," he said. "Matters were not going forward."
On Tuesday, when the regents held a four-hour, closed-door meeting, Wooten said the idea of disassociating with the UGA Foundation "evolved."
While discussing 16 new principles for "cooperative" organizations, he said, regents continually asked whether the UGA Foundation was meeting them. On most points, he said, the regents agreed the foundation was not.
"We felt there were so many of them," Wooten said. "One thing led to another."
By the end of the meeting, the regents had voted unanimously to instruct Adams to pull UGA out of the foundation.
Staff writer Patti Ghezzi contributed to this article. Staff writers Kelly Simmons' and Alan Judd's e-mail addresses are ksimmons@ajc.com and ajudd@ajc.com.