Responding to Requests for Public Records on Behalf of an Auxiliary Foundation.

Category: Business & Facilities
Date: May 18, 2017 06:09 PM

As public agencies, California community college districts are subject to the California Public Records Act (CPRA), the Act that grants members of the public access to a district’s “public records.”  Under the CPRA, public records include any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by a public agency, regardless of physical form or characteristic.  When a member of the public requests these documents, a district must disclose these writings unless a statutory exception applies. 

As nonprofit organizations, community college foundations are also subject to certain public disclosure requirements under the Internal Revenue Code and California law applicable to nonprofit corporations.  For example, the IRS requires tax-exempt organizations to make public their incorporating documents (e.g. bylaws and articles of incorporation), applications for exempt status, exempt status determination letters, and annual information filings (form 990s). California’s Corporations Code similarly requires nonprofits to make their articles of incorporation and bylaws open to inspection by members and organization directors. 

But what happens when a community college foundation becomes a recognized “auxiliary organization” under the California Education Code?  Does the organization, through its formal district ties, become subject to the CRPA?

The short answer is “no.”  An auxiliary organization is not subject to the CPRA due to its recognized “auxiliary” status.  However, in 2011, the legislature adopted the Richard McKee Transparency Act, an Act separate from the CPRA that requires records maintained by auxiliary organizations to be available for public inspection.  (Ed. Code, §§ 72690, et. seq.)

Effective January 1, 2012, the Richard McKee Transparency Act recognized that auxiliary organizations are entities “legally separate” from community college districts, and that we must balance access to auxiliary records against the need to protect the individual privacy rights of donors and volunteers, and the auxiliary’s fiduciary interests.   The Act requires an auxiliary organization, like a public agency, to make its records available for public inspection or copying.  Such records include identifiable writings containing information relating to the conduct of the auxiliary organization, prepared, owned, used, or retained by the organization.  This language and many provisions of the Act mirror the CPRA, but there are distinctions.  The Act exempts from disclosure:

  • Information that would disclose the identity of a donor, prospective donor, or volunteer;
  • Personal financial information, estate planning information, and gift planning information of a donor, prospective donor, or volunteer;
  • Personal information related to a donor's private trusts or a donor's private annuities administered by an auxiliary organization;
  • Information related to fundraising plans, fundraising research, and solicitation strategies.
  • The identity of students and alumni, to the extent that this information is already protected under state and federal statutes applicable to community colleges (the identity of part-time or full-time employees of an auxiliary organization, or to a student who participates in a legislative body of a student body organization is not exempt from disclosure);
  • Trade secrets; and
  • Any information that is exempt from disclosure under the CRPA, or information otherwise restricted by law.

Despite the Act’s specific exemptions, donation information will be subject to disclosure under the following conditions:

  • When a donor, in any fiscal year, makes a gift or gifts, in a “quid pro quo” arrangement (i.e. where the donor receives some goods or services in exchange for the gift), where either the value of the benefit received is in excess of two thousand five hundred dollars ($2,500) (adjusted annually to reflect changes in the Consumer Price Index, as calculated by the U.S. Bureau of Labor Statistics) or the benefit would be impermissible under state or federal law.  In these circumstances, the auxiliary must disclose records pertaining to the gift or gifts, as well as the donor’s identity.
  • When an auxiliary organization’s officers or directors engage in “self-dealing” transactions with the auxiliary, including, but not limited to transactions involving loans of money or property, or other material financial interests, as set forth in the Corporations Code.  In these circumstances, the auxiliary must disclose records pertaining to the self-dealing transactions.
  • When the auxiliary or district awards a volunteer or donor, a contract that was not subject to competitive bidding within five years of the date of the service or gift. In these circumstances, the auxiliary must disclose records pertaining to the service or gift.

The Act does not exempt from disclosure the amount or date of a donation, the donor-designated “purpose” of a donation, or any other donor-imposed restrictions on the use of a donation.  It also does not exempt from disclosure records that are otherwise subject to a request made under the CRPA.[1]

Like the CPRA, the Richard McKee Transparency Act sets statutory timelines and conditions for responding to and denying requests for information.  As with the CPRA, auxiliary organizations have 10 days to notify a requester, in writing, whether the request, in whole or in part, seeks copies of disclosable records maintained by the auxiliary.  Also like the CPRA, an auxiliary can extend the timeline to provide notice, up to 14 days, in “unusual circumstances.”  If an auxiliary organization denies a request for information under the Act, it must provide the names and titles or positions of each person responsible for such denial.

Finally, as with the CPRA, the Richard McKee Transparency Act provides persons requesting information under the Act the option to seek court intervention to enforce their rights to inspect or receive records maintained by auxiliary organizations.  The costs and reasonable attorney’s fees associated such intervention will be awarded to a plaintiff who prevails in litigation filed under the Act, at the auxiliary organization’s expense.  Thus, it is imperative that auxiliary organizations, like their community college district partners, understand and faithfully execute their obligations under the Act.

[1] Donor information may also be subject to disclosure to the State Attorney General under the Uniform Supervision of Trustees for Charitable Purposes Act, Government Code section 12586.  This Act is only applicable to charitable corporations that received or accrue $2 million or more in any fiscal year, and it does not apply to state agencies, or charitable corporations operated primarily as educational institutions.  (See Gov’t Code, §§ 12586, 12583.)

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