The Ohio University Board of Trustees voted Friday to create separate "affiliated entities" to serve OU's goals, and adopted the Ohio Transformation Group as its first entity.
Ohio University will now be able to create non-profit corporations that are separate from the university to pursue “business-related activities” that support the university’s goals.
After passing a resolution June 26 allowing the establishment of such non-profit entities, OU’s Board of Trustees authorized the creation of the Ohio Transformation Group, which will “serve as a strategic planning entity for projects intended to improve the communities in which the university maintains a presence throughout Ohio,” according to Board of Trustees documents.
Included in the improvement strategy will be the ability to enter into partnerships with “private third-parties” and to put financial resources toward a wide range of initiatives in housing, healthcare, education and economic development for Athens and beyond.
Among the abilities of the group will be the power to purchase real estate. Though no explicit plans for the group have been publicly voiced by trustees or OU officials, Trustee Janetta King mentioned the possibility of funding projects at the Ridges with federal and state funds that OU currently doesn’t have access to because of a “variety of institutional constraints.”
The Board of Trustees will oversee the creation and operation of all future affiliated entities.
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Trustee N. Victor Goodman was the only objector to the group and any future affiliated entities.
“When you read the documents, they purport to talk about the separateness of these affiliated entities from the university, and I find that not to be the case in my mind because of the construct of the appointment of the board members,” Goodman said. “I have an issue with liability.”
Board of Trustees Chair Sandra Anderson said she shared Goodman’s concerns “as a retired lawyer,” but views affiliated entities as a way to manage risk, not incur it.
“This policy is necessary to…keep the board involved and to get information (about the entities),” Anderson said. “It’s a balance of control versus the need to be flexible and nimble and have innovation so we can respond to...the revenue challenges we have in this new environment.”
Anderson pointed out that other universities in Ohio have affiliated entities, such as Ohio State, and said the trustees used Ohio State’s counsel when considering the group. She said it is part of a growing trend for universities to become “more economically invested in their communities.”
Though separate from the university by legal definition, the group will be “controlled or strongly influenced” by the university and receive significant support from the university in the form of funds, staff and other resources. Little funds will be needed to maintain the daily workings of the group, but project funds will be obtained through gifts, grants, loans, university funding or other third-party funds.
As a non-profit, the group will be exempt from federal income taxes, as well as Ohio “sunshine” laws that necessitate public meetings and public access to records.
The group will be governed by a five-member board of directors, consisting of three university members and two non-university-appointed community representatives. Board members have yet to be named, and a timeline for opening operations has yet to be publicly released.
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The OU Board of Trustees must approve any cumulative transfer of university funds over $100,000 to the group n a fiscal year, and President Roderick McDavis is required to submit an annual report on the corporation’s activities and financial status.
Any affiliated entity similar to the group may be established by President McDavis in the future to engage in business activities that “promote, enable, sponsor, or complement educational, scientific, research, charitable, health-care related, cultural activities, or community and regional service activities” for the benefit of the university, according to Board of Trustees documents.
On its Facebook page, the Ohio University Student Union expressed its concern with the new policy, saying that the policy demonstrates that OU’s Board of Trustees and administration “despise transparency and accountability.”
@MCTilton
mt522913@ohio.edu
